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Real Estate Briefing - Archive | July, 2009

The collapse in commercial property: Towers of debt

Posted on 31 July 2009 by Laxman  |  Email |Print

From Commercial property was a popular asset class for much of this decade. Institutional investors who lost a lot of money when the dotcom bubble burst were persuaded that switching from the stockmarket into property would diversify their portfolios and reduce their risk.
Cheap finance was plentiful. Investors could indulge in a version of the “carry trade”—borrowing at a low interest rate to buy buildings and counting on the rental yield and capital growth to more than cover their financing costs……….Full Article: Source

Commercial property: A concrete problem

Posted on 31 July 2009 by Laxman  |  Email |Print

From Banks face another round of property-related bad debts: this time it will be flashy offices, not rundown homes.
There is something comforting about investing in bricks and mortar. To many people it is a solid, “real” asset, unlike those complex pieces of paper that flighty financial markets spend all their time trading……….Full Article: Source

S&P global property indices rebound in Q2

Posted on 31 July 2009 by Laxman  |  Email |Print

From Commercial property markets are showing signs of a recovery following sharp rises in the S&P Property and Reit Indices in the second quarter, according to a report from Standard & Poor’s Index Services.

After a disappointing Q1, in which the S&P Global Property Index continued its downward spiral falling by 19.81 per cent, property markets across the board have rebounded sharply with the index posting an increase in Q2 of 37.9 per cent. ………Full Article: Source

Decline in property returns slows, says JLL

Posted on 31 July 2009 by Laxman  |  Email |Print

From The decline in property returns slowed in the second quarter of 2009 according to the Jones Lang Lasalle Quarterly Property Index.

Real estate returns fell by 1.8% in the second quarter of 2009, compared with 6.4% in the first quarter, recording the smallest negative quarterly returns since June 2008……….Full Article: Source

Troubled US commercial property loans seen doubling

Posted on 31 July 2009 by Laxman  |  Email |Print

From Reuters: The amount of troubled U.S.commercial real estate loans may double to $100 billion by year end as delinquencies rise and financing remains hard to find, Fitch Ratings said on Thursday.

Commercial real estate has emerged as one of the biggest threats to a rebound for financial institutions and the U.S. ecomomy, as falling revenue from office buildings, shopping centers and apartments reduce property values……….Full Article: Source

Has the U.S. housing market hit bottom?

Posted on 31 July 2009 by Laxman  |  Email |Print

From Now that a number of recent housing reports are generating some incredibly positive headlines and the global economy appears to be slowly digging its way out of an enormous hole that was created last fall when the world nearly came to an end, the burning question on the minds of millions of people is …
Has the housing market hit bottom?………Full Article: Source

Mortgage lending: Baggage-handling

Posted on 31 July 2009 by Laxman  |  Email |Print

From Is the housing market really coming back to life? Prices may finally have embarked on a tentative upswing but mortgage lending remains a mixed picture. Figures from the Bank of England on July 29th show that property loans increased in June by only £342m ($561m), about the same as in May and less than most economists were expecting.
The number of mortgage approvals, however, rose by almost 8% to 47,600, up from a trough of 27,400 last November……….Full Article: Source

Upturn in European property investment activity in Q2 matched by stabilising yields

Posted on 31 July 2009 by Laxman  |  Email |Print

From CB Richard Ellis Group, Inc. (CBRE) announced a slight upturn in the European commercial real estate investment market, with turnover for the second quarter (Q2) of 2009 totaling €13 billion, a 12% increase on the €11.6 billion transacted in Q1 2009.
The increase in activity was heavily weighted towards the last few weeks of the quarter. This increase in activity has been matched by stabilising yields……….Full Article: Source

U.K. home prices could end year with gain

Posted on 31 July 2009 by Laxman  |  Email |Print

From WSJ: U.K. house prices have a “reasonable chance” of ending the year slightly higher than where they started it, the Nationwide Building Society said Thursday in one of the most upbeat comments on the market since it was throttled by the credit crisis.

“Only a few months ago, such an outcome would have appeared unthinkable,” Martin Gahbauer, Nationwide’s chief economist, said in the report……….Full Article (Subscription Required) : Source

London plans 2 pct commercial property tax for crossrail

Posted on 31 July 2009 by Laxman  |  Email |Print

From Bloomberg: London Mayor Boris Johnson today published a plan to fund the city’s Crossrail transportation system by levying a 2 percent supplement on taxes for commercial real estate with an assessed value of 50,000 pounds ($82,520) or more.

The measure will be introduced in April and will be limited to an “estimated” one fifth of London’s business premises, the mayor’s office said today in an e-mailed statement……….Full Article: Source

Spain’s property market: Tricks and mortar

Posted on 31 July 2009 by Laxman  |  Email |Print

From Spanish banks have been doing their best to shield themselves from the bursting of the country’s property bubble. By buying properties before the loans on them go bad, lenders can mask their worst bets.
Restructuring loans has the same effect. Help is now at hand from an unlikely source: the normally sober Bank of Spain. In July the central bank circulated guidance that relaxed provisioning rules on risky mortgages……….Full Article: Source

REITs a poor remedy for Spanish property slump

Posted on 31 July 2009 by Laxman  |  Email |Print

From Reuters: Spain’s real estate investment trusts will do little to attract foreign investors or soothe its catatonic property sector before an expected economic rally in 2011, even if they do help detoxify distressed banks.

“We should have had them (REITs) two or three years ago. They are locking the door after the horse has bolted,” said CB Richard Ellis’ Iberian research head, Edward Farrelly……….Full Article: Source

Bulgarian construction market shrinks further

Posted on 31 July 2009 by Laxman  |  Email |Print

From If the Bulgarian construction sector was to keep its first-quarter development pace, the industry would see a 25 per cent drop in the number of new construction projects to come to the market in 2009 compared to the year before, estimates from Arco Real Estate, the local office of Estonian real estate group Arco Vara, said.

Sofia was headed for a 32 per cent year-on-year drop, whereas Varna and Bourgas faced declines of 32 and 14 per cent, respectively, the agency said………..Full Article: Source

Slovenia real estate: Italy’s neighbor experiences housing decline

Posted on 31 July 2009 by Laxman  |  Email |Print

From House price increases in Slovenia began to slow in 2007, and started to decrease in 2008. In the first quarter of 2009, the price of second-hand dwelling houses declined by 7% (-8.7% in real terms) from a year earlier, according to the Statistical Office of the Republic of Slovenia (SORS) - the biggest annual price fall since the series was established in 2003.
From 2004-2007, house prices increased at an average rate of 13%……….Full Article: Source

Buyer’s market in Croatia, but no one’s buying

Posted on 31 July 2009 by Laxman  |  Email |Print

From With its medieval cities and a coastline dotted with largely unspoilt islands, Croatia has been a natural destination for many of Europe’s real estate dollars in recent years.

Yet while the Adriatic sun continues to sparkle along the country’s Dalmatian coast, its real estate market has lost much of its glitter……….Full Article: Source

Property insight from Dubai: Q2 2009 market view

Posted on 31 July 2009 by Laxman  |  Email |Print

From Dubai real estate market endured another difficult quarter with minimum sales activity and further evidence of weak sales levels across all sectors.
Despite continued negativity, price declines are beginning to slow with cautious optimism that market bottom could be called before year end……….Full Article: Source

Middle East’s biggest property developer posts $350mln second quarter loss

Posted on 31 July 2009 by Laxman  |  Email |Print

From AFP: Property giant Emaar posted a second-quarter net loss of 1.3 billion dirhams (350 million dollars) as a slowdown in the American real estate market forced it to write off the entire value of its US unit John Laing Homes.

Emaar, partly owned by the Dubai government, swung into loss from a profit of 2.1 billion dirhams (572 million dollars) in the same period last year, it said in a press release on its website……….Full Article: Source

Consolidation ‘will shape Dubai real estate market’

Posted on 31 July 2009 by Laxman  |  Email |Print

From Moody’s has said that the proposed consolidation of Dubai’s two largest master real estate developers, Emaar Properties and Dubai Holding Commercial Operations Group, would create a dominant entity in Dubai’s property market.

The ramifications of the transaction are discussed in Moody’s Special Comment, ‘The Dubai Property Market in the Wake of Consolidation’……….Full Article: Source

Dubai property market recovery dependant on other global economies

Posted on 31 July 2009 by Laxman  |  Email |Print

From The property market in Dubai is stressed but it is not getting any worse and improvement already being seen in some economies around the world backs up the arguments that it will start to recover in 2010.

Real estate market recovery is very much dependant on the global economic recovery and world economic events, a new report to be published at the end of July says……….Full Article: Source

Rents for properties in Dubai fall between 40 and 50 pct in 9 months

Posted on 31 July 2009 by Laxman  |  Email |Print

From The rents for offices in Dubai have collapsed 50 per cent in the last 9 months due to fall in business activity with rates of residential properties also tumbling 40 per cent.
According to CB Richard Ellis (CBRE) in its quarterly UAE Property Insight Report, further drops in commercial and residential rents are likely as Dubai’s property market faces a 3 to 6 months continued negative growth. ………Full Article: Source

Office assets in Asia Pacific continue to attract investors

Posted on 31 July 2009 by Laxman  |  Email |Print

From Encouraged by the recent flow of new government created liquidity and a re-bounding market optimism in the Asia Pacific region as compared to the start of 2009, some real estate investors have taken advantage of inexpensive financing costs by acquiring office assets in the hope for future capital gains.

A number of economic indicators in the region are showing signs that the recent dramatic market downturn may be tapering off, offering hope that the worse is over and that a global recovery may start in late 2009 or early 2010……….Full Article: Source

Strong demand for property in China

Posted on 31 July 2009 by Laxman  |  Email |Print

From Demand for property in China is reportedly going through the roof, following the country’s decision to revoke the ban on overseas nationals buying property on the country’s mainland.

Consultancy firm, Landpower report that Hong Kong nationals bought between 11,000 and 12,000 residential units in the mainland in the first half of 2009, up 23% from the same period last year……….Full Article: Source

China: Real estate transactions, prices surge showing clear recovery trend

Posted on 31 July 2009 by Laxman  |  Email |Print

From The real estate industry, a pillar of the national economy, picked up after more than a year of decline and showed a clear trend of recovery.
The most obvious characteristic of this round of recovery in the real estate market is an increase in housing transactions which have doubled in some cities……….Full Article: Source

China to launch REITs in inter-bank market

Posted on 31 July 2009 by Laxman  |  Email |Print

From China will soon allow the launch of real estate investment trusts (REITs) in the inter-bank market, a local newspaper reported on Thursday, a move that would give developers more exit options and expand channels for Chinese investors.

The Shanghai-based Oriental Morning Post said trust firms with registered capital topping 500 million yuan ($73.19 million) would be allowed to issue REITs to banks, mutual funds, insurers, securities firms and finance companies, either in the inter-bank market or through private placements……….Full Article: Source

Philippine real estate not affected by recession

Posted on 31 July 2009 by Laxman  |  Email |Print

From With the recession hitting the US and the UK, people are now asking how this will affect the economic sectors, specifically the real estate industry.
In the Philippines, this will most likely be as one of its “déjà vu”, remembering the 1997 Asian financial crisis that affected not only real estate, but banking and construction as well……….Full Article: Source

Trinidad And Tobago real estate: An investment guide

Posted on 31 July 2009 by Laxman  |  Email |Print

From The tropical islands of Trinidad and Tobago have seen prices of real estate fall of late, after over a decade of strong growth.
The decline is a result of factors that include the global economic crisis, and a new law that requires foreigners to acquire a license in order to buy property. To learn more about the current state of Trinidad and Tobago real estate, see the following article by Global Property Guide……….Full Article: Source

U.S. properties worth $2.2 trillion at default risk

Posted on 30 July 2009 by Laxman  |  Email |Print

From Bloomberg: About $2.2 trillion of U.S. commercial properties bought or refinanced since 2004 are now worth less than the original price, raising the threat of more foreclosures, Real Capital Analytics said.

Prices have fallen so far that about $1.3 trillion of properties have either lost their owners’ down payment or are close to it, Robert White, president of the New York-based research firm, said in a report………Full Article: Source

Equity in US commercial property may evaporate

Posted on 30 July 2009 by Laxman  |  Email |Print

From Reuters: The equity in $1.3 trillion worth of U.S commercial real estate acquired or refinanced in 2006 through early 2008 is at risk of being completely wiped out by price collapses, according to a report by Real Estate Capital Analytics.

About $2.2 trillion of properties acquired or refinanced after the 2004 start of the commercial real estate bubble have lost value, according to the report, released on Wednesday by the real estate data company………Full Article: Source

The next US property market problem: Commercial real estate

Posted on 30 July 2009 by Laxman  |  Email |Print

From A major contributor to the global financial crisis was the downturn in US housing prices as this not only brought the sub-prime issue to the fore but the fall in house prices has subsequently impacted on household wealth and this has translated into lower consumer spending levels.

In the view of Standard Chartered there remain significant risks with respect to US real estate, with possibly the next shoe to drop being the commercial property sector as prices here are currently falling faster than house prices………Full Article: Source

Property bond sales may resume with $3 bln

Posted on 30 July 2009 by Laxman  |  Email |Print

From Bloomberg: Commercial property companies may sell about $3 billion of mortgage-backed bonds starting in September as part of the U.S. program to revive lending for shopping malls, skyscrapers and hotels.

More than a dozen real estate investment trusts are likely to participate in the Federal Reserve’s Term Asset-Backed Securities Loan Facility, or TALF, said Steven Wechsler, chief executive officer of the National Association of Real Estate Investment Trusts………Full Article: Source

U.S. banks homebuilding losses to taper in six months: S&P

Posted on 30 July 2009 by Laxman  |  Email |Print

From Reuters: U.S. banks’ losses from loans to homebuilders should start to taper off in about six months, a Standard & Poor’s analyst said on Wednesday.

“The bottom in homebuilder activity apparently started forming after the second quarter closed, so write-offs should taper off late this year or early next,” said Tanya Azarchs, a bank credit rating analyst with Standard & Poor’s in New York………Full Article: Source

America’s most expensive zip codes

Posted on 30 July 2009 by Laxman  |  Email |Print

From Forbes: The top 10 spots on this year’s list boast median home sale prices upward of $2 million.
What’s more, many of the ZIP codes on our list saw strong price appreciation since our examination of the top U.S. spots last year………Full Article: Source

Canadian annual home prices fall a sixth month, Teranet says

Posted on 30 July 2009 by Laxman  |  Email |Print

From Bloomberg: Canadian home prices fell on an annual basis for the sixth month in a row in May, the Teranet- National Bank National Composite House Price Index showed.

Prices were 6.9 percent lower than the same month a year earlier, according to the report released today by National Bank Financial………Full Article: Source

Europe: Rising vacancy levels drive down office rents

Posted on 30 July 2009 by Laxman  |  Email |Print

From Prime European office rents declined by 4.6% in the second quarter of 2009 compared with the previous three months and are now on average 15.4% lower than in Q2 2008, according to Jones Lang LaSalle’s Q2 2009 European Office Clock Report.
At the same time, the overall vacancy rate increased 80 basis points to 9.3%………Full Article: Source

UK: Signs of life show in housing market as loan approvals rise

Posted on 30 July 2009 by Laxman  |  Email |Print

From Independent: Fresh evidence that Britain’s battered housing market is finally on the road to recovery came yesterday with Bank of England figures that showed mortgage approvals for house purchases in June reached 47,584, the highest number since April 2008 and the fifth monthly improvement in a row.

But mortgage lending was a lot lower than expected at £343m – economists had predicted £600m – and total consumer lending was its weakest since the Bank first recorded it in April 1993………Full Article: Source

UK charities plan to invest more in property

Posted on 30 July 2009 by Laxman  |  Email |Print

From As pressure to generate income continues to mount, nearly two thirds (64%) of UK charities are positive about the prospects of investing in property in helping to secure their required income, according to a study conducted by Cordea Savills, the international property fund manager, and investment manager Rensburg Sheppards.
Some 41% of the charities polled plan to increase their allocation to property over the next 18 months………Full Article: Source

France: Crisis averted-property prices on road to recovery

Posted on 30 July 2009 by Laxman  |  Email |Print

From The Fédération Nationale de l’Immobilier (FNAIM) unveiled its report on property prices in France for the first half of 2009 in July, revealing that prices are standing up well despite the recession and are on course to meet predictions of a 5-10% drop over the year.

It seems that the drop in prices experienced towards the end of 2008 and beginning of 2009 is abating, with prices jumping 3.9% in the second trimester of 2009, helping to level out the drop in property prices for the year to date to 7.3%………Full Article: Source

Sentiment improves in Polish industrial market: C&W

Posted on 30 July 2009 by Laxman  |  Email |Print

From Sentiment in the Polish warehouse market improved in the second quarter of this year, with take-up increasing 30% to 174,800 m2 compared to the previous quarter, Cushman & Wakefield reported.

After a slow start to the year, several major deals were closed in Q2, but tenants continued to exercise caution, the adviser said………Full Article: Source

Good Cyprus property prospects

Posted on 30 July 2009 by Laxman  |  Email |Print

From Prospects for the Cyprus property sector look sound in comparison to most property markets in Europe, according to Cypriot government.

In an interview with the Financial Mirror, Cyprus’ interior minister Neoclis Sylikiotis said: “property investment is much safer in Cyprus than anywhere else.”……..Full Article: Source

UAE construction sector still active by global standards

Posted on 30 July 2009 by Laxman  |  Email |Print

From Despite the global slowdown, the UAE continues to be one of the most active construction markets in the world with more than 750 active projects in construction and 450 recently completed, according to a new report by Dubai-based research house Proleads Global.
Although more than 400 projects with a total value in excess of US $300 billion have been placed on hold or cancelled, (the rest either in study, planning, design or bidding), the report forecasts stability returning to the sector this year with some recovery in cash flow in 2010………Full Article: Source

Dubai property company merger will dominate real estate sector

Posted on 30 July 2009 by Laxman  |  Email |Print

From The merger between leading property developers in Dubai will create a giant entity that will dominate the real estate market, it is claimed.

Opinion is divided as to whether the merger of Emaar Properties and three companies in the Dubai Holding Commercial Operations Group will have a positive or negative impact in the short term………Full Article: Source

Mortgage lenders await upturn in the Gulf

Posted on 30 July 2009 by Laxman  |  Email |Print

From The Gulf has largely avoided the writedowns of repackaged subprime mortgages that unleashed such havoc on global financial markets last year.
But instead, the nascent local mortgage industry has been hit by a slump in domestic property. Across the region residential property values and rental costs have declined, some even more deeply than in the US………Full Article: Source

PE realty funds still face hurdles

Posted on 30 July 2009 by Laxman  |  Email |Print

From Private equity (PE) real estate funds are still struggling to raise capital in the current economic environment.

The second quarter of 2009 saw 21 real estate funds close, with an aggregate commitments of $10.3 billion (Dh37.83bn)………Full Article: Source

South Africa prices on the up

Posted on 30 July 2009 by Laxman  |  Email |Print

From The residential property market in South Africa appears to be coping with the global downturn although concerns about a rising number of foreclosures are increasing.

The average price of a property in South Africa increased by 1.2 per cent year-on-year in June, according to the latest property price index………Full Article: Source

China: Property giant mulls share placement

Posted on 30 July 2009 by Laxman  |  Email |Print

From China Merchants Property is planning to raise 5 billion yuan through a private placement of new shares to help finance the acquisition of development land.

This is the latest move in a series of mega capital raising schemes by the country’s leading real estate developers going on an expansion mode to take advantage of the recovering real estate market………Full Article: Source

China’s real estate market access threshold too low

Posted on 30 July 2009 by Laxman  |  Email |Print

From The current market access threshold for real estate enterprises is too low, said Zhu Zhongyi, vice chairman and secretary-general of China Real Estate Association (CREA) recently.
China must improve real estate tendering and bidding systems, regulate access standards, and strengthen corporate brand building to help some real estate enterprises form their own brand reputation………Full Article: Source

HK interest in mainland housing market goes up

Posted on 30 July 2009 by Laxman  |  Email |Print

From Latest statistics show that Hong Kong investment in the mainland real estate rebounded in the first half of this year, reported Wednesday.

According to figures released by Hong Kong-based Land Power, a real estate consulting group, as of the end of June, the amount of the mainland property that Hong Kong people have bought is between 11,000 to 12,000 units, a 23 percent year-on-year rise………Full Article: Source

Singapore: Signs of speculation in private property market

Posted on 30 July 2009 by Laxman  |  Email |Print

From The government is seeing some signs of speculation in the Singapore property market, according to National Development Minister Mah Bow Tan.

Speaking on the sidelines of the topping out ceremony of the Marina Bay Financial Centre on Wednesday morning, Mr Mah said the government is monitoring the situation………Full Article: Source

Jakarta property market still down, but recovery is near

Posted on 30 July 2009 by Laxman  |  Email |Print

From Jones Lang LaSalle said Jakarta’s residential market has yet to recover from the global economic downturn, with figures for property sales and leases down dramatically compared to last year.

“Sales of apartments are still down, while new unit leasing also declined during the first half of this year,” Anton Sitorus, head of research at PT Jones Lang LaSalle Indonesia, said on Wednesday………Full Article: Source

Local players remain dominate in VietNam’s real estate

Posted on 30 July 2009 by Laxman  |  Email |Print

From Local investors will continue to be main players in the real estate market in the short and medium term, and will seek assets from foreigners looking to leave the market.

Managing director of CB Richard Ellis Viet Nam Ltd Co, Marc Townsend, told the Viet Nam International Real Estate Conference in HCM City on Saturday that more real estate assets will be offered for sale in the near future………Full Article: Source

July 2009
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