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Real Estate Briefing 02.Oct 2008

UK real estate investment drops 58% in 2008
Swiss funds still favour real estate
UAE: There is 'no negative sentiment in the market'
Housing boom over as market sags in Canada
Get ready for real estate consolidation
Irish property market crippled by lack of bank funding says CBRE
Northern Rock announces new mortgage range
US: Home construction spending falls 28%
Bulgarian property funds freeze projects of over EUR 2bln
Low valuations could pull plug on property funds
Wall Street crisis drops the hammer on development financing
Selling well: 'Outlet' REITs
Warning of property jobs losses
UK: Growing uncertainty drives housing market towards a standstill
Landlords must show energy rating
Buy-to-let in mire for two years, warns adviser
London office deals cut by 40%
Mexico emerges as popular property investment for Canadians
Middle East investors to drive UK green building revolution
Where Manhattan real estate sales are slowing
Canada: Property tax may climb by millions due to reassessment
First skyscraper in Paris for 30 years given official go-ahead
Australia's banks nervous over level of commercial exposure
SA Property prices: still looking ugly
Failed deals replace boom in New York real estate
Behringer Harvard expanding into Germany
World property market slide worsens
Top 100 most influential women in real estate
Super funds moving out of property
VietNam: Real estate market to warm up soon
Moscow builders halt projects as credit crunch bites
Construction firms unprepared for minimum wage rise

Posted on 02 October 2008 by Laxman |  Email |Print

From Propertyeu.info: International property services firm Jones Lang LaSalle (JLL) estimates that direct real estate investment activity in the UK during the third quarter of 2008 stood at circa £5bn (EUR 6.3 bn), slightly below the £6bn recorded in the previous quarter.

This translates into a year to date total of £18bn, a 58% drop compared to the same period last year. The report found that this mainly due to the lack of available finance impacting on large lot size deals, which is affecting the central London and shopping centre markets in particular. Although volumes have fallen significantly, a number of notable deals completed over the last three months. ….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From IPE: Nine out of 10 Swiss pensions funds are indirectly invested in real estate while the majority also directly invest in the market, according to research from real estate investment specialist Sal Oppenheim.

A study conducted by Sal Oppenheim Real Estate and 4IP Management Ltd found 89% of Swiss pension funds hold indirect real estate investments while 72% have direct investments, suggesting investors are still keen on real estate as an asset class though the preferred investment route is still the indirect approach through investment funds. The survey of investment directors with CHF63bn (€bn) in real estate assets under management looked at their existing holdings and asset allocation intentions, working in collaboration with the Department of Financial Management at Basle University, and discovered the average allocation to real estate – direct or indirect - was 18% among pension funds in contrast to insurers who had just 13% allocated to property….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Business24-7.ae: Dubai-based real estate players have predicted an upturn in the UAE market owing to price stability in Dubai and Abu Dhabi’s real estate sector. Having a currency pegged to the relatively weak US dollar is continuing to be beneficial for investors making Dubai look attractive for European investment.

Emirates Business spoke to a cross-section of developers in order to feel the pulse of the sector in Dubai amid negative sentiments in the market. Manal Shaheen, Director of Sales, Marketing and Customer Service for Nakheel; Nasser Rafi, Managing Director, Middle East of Hamptons International for Emaar Properties; Ali Al Rahma, Chief Executive of Eqarat.com, said there was no need for a gloomy sentiment in Dubai’s realty market….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From The Globe and Mail: Real estate bidding wars are becoming a thing of the past in Calgary, and single-family homes in the former centre of the housing boom are now taking longer to sell than they have at any time during the past eight years.

Detached homes on the city’s resale market are being listed for an average of 50 days, according to data released yesterday by the Canadian Real Estate Association. That compares with around 35 days in 2007, and 25 days in 2006. It’s a trend playing out in other major centres as well, as sales activity slows and the supply of units for sale outpaces demand. The average time resale homes and condos remain on the market has risen in Vancouver, Calgary and Toronto, the only three markets covered in the report….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Inman News: Last week, it was announced that Brookfield Residential Property Services, based in Toronto, Canada, would purchase GMAC Home Services LLC, which operates one of the largest real estate brokerage companies in the United States. Brookfield owns the Royal LePage, La Capitale, Johnston & Daniel, and Centract real estate brands.

Like the banking sector, other industries are expected to consolidate in response to tough economic times. And experts say this is just the beginning of a major marrying of unlikely bedfellows in the real estate industry…… Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Property Week: Conditions in the Irish commercial property market have continued to deteriorate because of its weakening national economy and the global financial crisis, according to CB Richard Ellis.

The global property services company said in a market update today that the lack of bank funding was significantly impacting activity in the development and investment sectors with only €465m (£370m) of investment deals taking place in the first nine months of the year compared to €1.6bn (£1.2bn) in the same period last year. It follows the news this week that Ireland was officially in recession following two consecutive quarters of negative growth and the announcement yesterday that the Irish government had moved to protect six Irish banks guaranteeing all deposits for the next two years….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Housefund.co.uk: Northern Rock has announced its new range of fixed rate and tracker mortgage products, which are now available. The new range continues to offer a free basic valuation and free standard legal work for residential remortgages.

New residential mortgage customers can choose to fix their interest rate and monthly payments from a choice of 2, 5, 10 or 15 years. Residential fixed rates start from 5.79% with a £1,995 product fee. New residential mortgage customers who are looking for a flexible fixed rate product have the option of choosing a product fee from several tiers, which range from £1,995 to a Fee Saver Option, for those borrowers who are looking to keep their fee costs as low as possible….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Inman News: The August rate of spending on residential construction projects dropped 27.9 percent compared to August 2007, the U.S. Census Bureau announced. The seasonally adjusted annual rate of spending on private residential construction projects was $343.6 billion in August, up 0.3 percent compared to the July rate.

This rate, a projection of a monthly spending total over a 12-month period, adjusted to account for typical seasonal fluctuations in construction activity, had declined for 16 consecutive months prior to August….. Full Article: Source

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From Emportal.co.yu: The US mortgage meltdown and the subsequent global financial fallout have stalled building projects worth over EUR 2 billion in Bulgaria. The crisis is hitting everywhere with all of its might, business climate is changing and no sector will escape unscathed, commented Rosen Plevneliev, manager of property developer Lindner Immobilien Management.

He said next year will be a tough time for businesses but 2010 may see light at the end of the tunnel. Entrepreneurs are wondering whether to go ahead or pull out of projects, according to Tihomir Tsakov, owner of local real estate agency Aristo. Under pressure by shareholders, property funds have started selling out assets….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Citywire: A 22% crash in the value of commercial property may break loan agreements, forcing banks to foreclose on property funds. The year-on-year collapse reported by the IPD UK Quarterly index could lead to the value of property dipping below the loan-to-value limits set out in bank loan agreements.

Up to now banks have been happy receiving interest but next quarter’s round of valuations could force them to act, warned analysts at Cenkos Securities. A £520 million industrial property portfolio from investment group Dunedin was forced into receivership earlier this month after it failed to secure funding to cover a breach in its loan covenants….. Full Article: Source

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From Costar.com: The crisis afflicting Wall Street investment banks is boiling over onto the state, regional and community banks that fund a large slice of the loans for construction and development projects on Main Street.

Construction lending is at a 14-year low and loan delinquencies are on the rise. The holders of many of the troubled loans are regional and community banks, which began picking up the slack when conduit and other portfolio lenders that traditionally make construction and development loans virtually disappeared at the onset of the credit crunch last year….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From WSJ: Commercial real-estate stocks posted modest gains during the third quarter, but one sector was surprisingly strong: landlords that host stores popular with bargain hunters. An index of 108 stocks tracked by the National Association of Real Estate Investment Trusts, NAREIT, eked out a 5.6% total return for this past quarter and is up 1.8% so far this year.

That is better than the broader stock market, which is down 9% for the quarter and 21% for the year, according to the S&P 500 index, which doesn’t include dividends. Among the winners in the third quarter were REITs whose fortunes rose as the economy’s prospects sank. Stock of Tanger Factory Outlet Centers Inc., a REIT with 31 discount shopping centers in 22 states, gained 22% in the third quarter. Simon Property Group Inc., a giant mall REIT that includes the Chelsea Premium Outlets, rose 7.9%….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From BBC: Bosses at a Highlands solicitors and estate agents have advised staff that redundancies may have to happen because of a downturn in the housing market. Gerald Cooper, of Macleod and MacCallum, said losses could not be “ruled in or ruled out”.

The Inverness-based firm is ranked among the top 40 solicitors in Scotland. The jobs warning comes at a time of high numbers of properties being put on the market but a drop in sales….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Housefund.co.uk: Hometrack’s latest house price survey shows that prices fell 1% over September - the twelfth consecutive fall since the start of the credit crunch. On a year on year basis the value of an average property has dropped by 6.2% - representing an average fall of £1,000 per month.

Prices may be down across the country, but the falls are not uniform…House prices were down across the whole country, but the fall in values was far from uniform. Over the last year a quarter of postcodes have seen average prices fall by less than 3% while double digit prices have been registered across 12% of the country….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From BBC: All landlords in England and Wales must now give new tenants a certificate showing the energy efficiency of their rented property. Buildings up for rent must be examined and given an Energy Performance Certificate (EPC) detailing their efficiency on a scale from A to G.

The rating is intended to allow potential tenants to consider energy efficiency and fuel costs. All EU member states must introduce the scheme by 4 January 2009….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From FT Adviser: Lenders are unlikely to offer any new buy-to-let deals “worth having” for at least two years, a broker has warned following the nationalisation of Bradford & Bingley. The buy-to-let market has been hit by takeovers at its two largest lenders in recent weeks, with Lloyds TSB buying up HBoS and the Treasury confirming the nationalisation of B&B’s loans book.

Buy-to-let has been strongly affected by the credit crunch and fall out from Northern Rock, as people who do not need the property’s they buy as homes are considered more high risk….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Thisissuttoncoldfield.co.uk: The commercial property market in London has suffered one of its toughest quarters as the deepening financial crisis batters confidence. Property firm Cushman & Wakefield today warned that the credit crunch continues to depress the central London office market, with just £1.24bn of deals completed in the last three months.

That was down 40% on the second quarter and a fifth of the £6.08bn of transactions in the third quarter last year. The scale of the wreckage was underlined by the fact 80% of deals in the last three months were by overseas investors, particularly German funds….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Property Wire: Canadian property investors are increasingly investing in Mexico as they regard the US market as not a good prospect at the moment. An increase in the number of flights from Canada to Mexico and a desire to avoid the volatility of the US market means more are buying second homes and investment properties further afield.

One investor, Doug Walker, had considered buying in Hawaii and the Caribbean. He wanted a holiday home to which he and his wife could eventually retire. ‘We were looking for something special but we also wanted to make a good investment,’ he said….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Vnunet.com: The economic downturn could inadvertently spark a major programme of green building improvements across the commercial property sector, according to one of the UK’s leading investment advisory firms.

Chris Tattersall, UK managing director at investment consultancy Smart, which frequently advises property investors, said that signs were already emerging that the downturn in the property market was prompting growing numbers of investors and fund managers to assess the environmental performance of their portfolios. “It is the investment community that will ultimately drive [green building improvements],” he said. “The downturn means they are asking what their properties are worth and are looking for valuations… and they increasingly realise that environmental performance is intrinsic to that value.”…. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Forbes: New York luxury real estate prices have held steady in the six months since Wall Street’s initial slide.But that’s about to change. Million-dollar-plus properties are lingering on the market for up to 90% longer than they did before Bear Stearns was bought by JP Morgan Chase in March.

One reason: The city’s high prices are buoyed by moneyed buyers, many of whom work in finance. Only now they’re not buying homes at the rate they did before. It’s easy to see why: 65,000 layoffs on Wall Street this year, according to the Department of Labor, uncertainty in credit markets and an upcoming bonus season that’s likely to leave a lot of coal in Brooks Brothers loafers….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Canada.com: Regina property taxpayers could see a $10.7-million tax hike in 2009, thanks to a sharp decrease in education foundation grants due to reassessment, according to the head of the Regina & District Chamber of Commerce.

Saskatoon residents could face a $5-million tax increase, barring any changes in the way the education portion of property taxes are calculated, added John Hopkins, CEO of the Regina chamber. But a senior education ministry official says it’s far too early to say whether property taxpayers in Regina and Saskatoon will face any increase in taxes. Hopkins said the ministry of Municipal Affairs recently informed the chamber that the percentage of value used to determine how much each class of property is assessed for taxation purposes remains unchanged in 2009…… Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Property Wire: New skyscrapers will once again grace the skies of Paris after officials cleared the way for the first high rise construction since high rise buildings were banned in the city by Jacques Chirac when he was mayor in 1977.

They voted to allow the construction of Project Triangle, the first of about 20 high rise projects that will transform the skyline of France’s capital city. Work could start as soon as the end of next year. The 200 metre tall, 50 storey glass building to be built at Porte de Versailles, will be the third largest in Paris after the Eiffel Tower and the Montparnasse Tower when it is completed in 2012….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From The Australian: Australia’s major banks are estimated to have a collective $200 billion exposure to the local commercial property market, a sector that is being drawn deeper into the worsening financial cycle.

Based on figures from investment bank Deutsche Bank, the nation’s top four banks each have a commercial property book — made up of retail, commercial and hotel assets — of $30-40 billion, with up to $6 billion of development. At the next level down, the biggest holder of commercial and construction assets is HBOS-owned BankWest at nearly $20 billion, followed by St George at $14 billion and Suncorp at about $11.5 billion…… Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Realestateweb.co.za: Job losses expected to add to interest rate pressure as real house prices plummet not far off 10% - new bank stats. Job losses are expected to add pressure to the beleaguered South African housing market, according to big-four bank FNB.

It said this week that, although real house prices are falling, a lack of affordability continues to apply its brakes on the market. The September FNB House Price Index released on Wednesday showed a slight year-on-year increase (1,8%), but prices declining month-on-month (-0,1%). Residential values - when taking inflation into account - dropped by a whopping 9,5%….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From NY Times: After seven years of nonstop construction, skyrocketing rents and sales prices, and a seemingly endless appetite for luxury housing that transformed gritty and glamorous neighborhoods alike, the credit crisis and the turmoil on Wall Street are bringing New York’s real estate boom to an end.

Developers are complaining that lenders are now refusing to finance projects that were all but certain months or even weeks ago. Landlords bewail their inability to refinance skyscrapers with blue-chip tenants. And corporations are afraid to relocate within Manhattan for fear of making the wrong move if rents fall or a flagging economy forces layoffs….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Bizjournals: Real estate investment firm Behringer Harvard is expanding operations to Germany, opening an office in Hamburg later this month. The office will handle European real estate acquisitions and conduct asset and property management services for Addison-based Behringer Harvard.

The company has hired Oliver Georg and Olaf Fortmann as managing directors for the new office. Prior to joining Behringer Harvard, Georg and Fortmann developed a real estate platform for HCI Capital AG, a German supplier of closed-end funds….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Theseoultimes.com: As financial markets tumble, the world’s housing markets have continued to slide during the year to end-Q2 2008. Inflation-adjusted house prices fell in 21 out of the 33 countries for which there is up-to-date published data.

The Baltics, the US, the UK and Ireland led the global decline during the year to end-Q2 2008, the latest date for which comprehensive global statistics are available. The biggest house price declines took place in Latvia, previously a leader of the global house price boom. House prices in Riga have fallen by 21.23% in nominal terms during the year to end-Q2 2008, and 33.08% in real terms….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Transworldnews.com: With 3,460 respondents casting 6,099 votes, the real estate professional community has decided who the Top 25 Most Influential Women are. And what an incredible list of powerful women this list represents.

Nine months ago when the 2008 edition of the Swanepoel TRENDS Report was published, the demographics that included women, youth and minorities were identified as key drivers in the future of the residential real estate brokerage industry. In the Trend titled “Shattered Glass” it was detailed how many women had reached leadership positions at national levels. This trend lit the match to initiate a nationwide flame in search of the Top 100 Most Influential Women in leadership roles in the Real Estate Industry….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From The Australian: Australia’s superannuation funds have put as much as $2billion worth of their units in unlisted wholesale property trusts up for sale at discounts of as much as 10 per cent. Institutional investors such as superannuation funds have about $50 billion invested in unlisted property funds run by managers such as Lend Lease, AMP, Macquarie Group and GPT.

Analysts said the collapse in the price of equities meant super funds were holding too much property and they were trying to sell stakes in unlisted funds. Australia’s 150-odd superannuation funds have prescribed guidelines covering their investments in property, ranging from 5 per cent to 25 per cent….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Vietnamnet.vn: The real estate market is expected to become warmer in the time to come as the market correction period has bottomed out, experts say. Richard Leech, Director of the Hanoi branch of CB Richard Ellis, a real estate service provider and consultant, believes that Vietnam’s real estate market has fallen to the deepest low and will bounce back soon.

“The real estate market has become attractive in the eyes of investors,” he said, adding that investors have come back to purchase. “I believe that the market will see the upturn in the fourth quarter of 2008, and you will see the market heat up further in 2009,” he said….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Bloomberg: Moscow’s decade-long building boom is falling victim to the global credit crunch as record high interest rates squeeze developers in the world’s third most expensive property market. “Loan rates have climbed to ridiculous heights and the terms are very short,” said Dmitry Lutsenko, a board member at Mirax Group, the Moscow-based company that’s building the Federation Tower, which will be Europe’s tallest skyscraper when completed.

Mirax canceled plans to develop 10 million square meters (108 million square feet) of commercial and residential space after interest rates on some loans rose to as high as 25 percent, Sergei Polonsky, Mirax’s billionaire owner, said in a Sept. 29 e-mail. The company’s Web site shows it has projects in countries including Russia, Ukraine, France, Turkey, Cambodia, Vietnam, Montenegro….. Full Article: Source

Posted on 02 October 2008 by Laxman |  Email |Print

From Building.co.uk: Research shows 76% of industry firms have failed to make provision for the rise in the statutory minimum wage happening today. Construction firms are ill prepared for today’s rise in the national minimum wage, according to new research.

Bibby Financial Services has revealed that despite the publicity surrounding the planned increase, many construction firms have done nothing to prepare for it. The data shows that 76% of construction firm owners and managers in the UK have failed to make any provisions, with 16% waiting to think about the statutory minimum wage rise after it has happened….. Full Article: Source

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