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Real Estate Briefing 14.Oct 2008

Market pressures force fund extensions
Luxury property prices still rising in Hong Kong
Hedge fund ditches UK housebuilders
UK: House sales hit new 30-year low
GCC buyers urged to invest in US realty
Moscow: Economy hits building boom
Australia: Residential developers to face tough times
Brazil’s FUNCEF to tackle equity fall with real estate
Austria's two largest developers to consider merger
Booming Bahrain real estate sector worth $5.7bln
Bank bailouts won't mean quick fix for mortgage seekers
New Losan hotel fund to invest EUR 1.6 bln over three years
Property financiers get new lifeline under pan-European bailout
Brown's housing market confidence
Irish house prices continue to fall
South Africa's biggest international development to date announced
Housing scheme beats tradition to win award
NZ's National Property eyes merger, liquidation
REITs that are holding up well
China real estate market faces slump
Real estate developers see easing of home loan rates
Worries grow over commercial real estate
Immoeast's capitalisation drops to 800 million euros, fund plans property sale
Real Estate: Is this the right time to invest?
German property funds can withstand pressure, say SEB specialists
Franchot touts ‘captive’ REIT recovery
China Beijing mortgage market crisis triggers15 percent panic selling
Italian real estate held ground in H1
Commercial real estate can be good investment in bad market
Australian house prices are unlikely to slump, says economist
The German prospect for property investment
Spain 'a great place to buy now'
Sydney property holds up
Pan-European retail sustainability standard launched

Posted on 14 October 2008 by Laxman |  Email |Print

From IPE: Non-listed real estate funds are increasingly extending the life of their vehicles rather than liquidating them in a bid to avoid the forced sale of their assets at current low market prices, the European Association for Investors in Non-listed Real Estate Vehicles (INREV) has found.

INREV’s Fund Termination Study 2008 showed of the 25 fund managers it surveyed only 29% of funds due to terminate between 2008 and 2010 are planning to liquidate, compared with 52% of funds in a similar study last year. Approximately 59% of the funds – regardless of their maturity date - have decided to continue the life of their fund, and 78% of these are planning to extend the fund while the other 22% intend to modify the vehicle into a new structure….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Homesoverseas.co.uk: Strong demand for luxury homes in Hong Kong is continuing to force prices in the sector upwards, despite a slowdown across many other parts of Asia, according to the Royal Institution of Chartered Surveyors’ (RICS) Asian Housing Review 2008.

The report says that the volume of luxury properties sold appreciated by 46% a year from 2003 to 2007, in turn forcing average luxury property prices up 142% during that time, compared to average Hong Kong property market growth of 44%. The research, which was conducted for RICS by Savills, also found that there is strong demand for luxury housing Shanghai and Beijing….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Building.co.uk: Toscafund sells stake in Taylor Wimpey and could be mystery seller behind large transaction in Redrow shares. Hedge fund Toscafund appears to have bailed out of its two UK housebuilding investments.

According to a statement to the London stock exchange, it has sold its 10% stake in Taylor Wimpey. Meanwhile Steve Morgan, founder of Redrow, has upped his stake in the housebuilder from 5.25% to 16.24%, sparking takeover speculation….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From BBC: The slump in the property market is becoming even worse, according to a survey from the Royal Institution of Chartered Surveyors (Rics). Estate agents sold less than one property per week each in September.

The number of properties being sold across the UK was the lowest since the Rics survey started in 1978 and was 52% lower than in September last year. London was the region with fewest sales per estate agent, at an average of just eight in the previous three months….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Business24-7.ae: Investors in the UAE and other GCC countries are being encouraged to buy US commercial properties that are being sold by under-pressure banks, financial institutions, developers and property owners.

This follows the collapse of the conduit mortgage market – for many years the principal source of commercial property loans – in the wake of the sub-prime meltdown. A bank would provide a mortgage on an office or retail or industrial building and then – having earned its fees – would sell on its ownership of the property….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Washtimes.com: Moscow’s decadelong 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 city’s Federation Tower, which will be Europe’s tallest tower when completed in 2010….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Theage.com.au: The fault lines of the global financial meltdown are driving deeper into the nation’s property market. Experts are divided over the extent to which the asset class will be punished, but agree that painful times are ahead.

Those most at risk include private residential property developers, who cannot source credit from increasingly risk-averse banks and who are out of the equity market….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From IPE: FUNCEF, Brazil’s third-largest pension fund and one of the largest in Latin America, plans to allocate approximately BRL520m (€611m) to the fund’s real estate portfolio in a bid to diversify its assets following a huge drop on its chosen equity index.

Brazil’s main stock index, the Bovespa, fell by 21% this month, hitting local pension funds hard. So in a bid to diversify its asssets further, Funcef, the pension fund which administers the supplementary plan for employees at the state-owned bank Caixa Economica Federal, will make investments in infrastructure and commercial real estate ventures worth over $2bn (€1.46bn) in 2008….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Bloomberg: Immofinanz AG and Immoeast AG, Austria’s largest developers, may merge after losing more than 80 percent of their combined market value in six months, reversing a spin-off 10 years ago, the companies’ chief executive said.

A merger would give the two Vienna-based companies “the size and the cash flow to invest in big projects” and help them weather the turmoil in the financial markets, Chief Executive Officer Thomas Kleibl said at a briefing in the Austrian capital today….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Arabianbusiness.com: Strong local demand, high liquidity and relaxed foreign ownership rules are driving a booming real estate market in Bahrain now worth $5.7 billion, a new report said, research from global real estate broker DTZ said.

DTZ, which has been doing business in the Middle East since 1975, predicted Bahrain’s property market would grow rapidly until 2012 across both residential and commercial sectors, making it ripe for foreign investment. Robert Addison, DTZ’s country manager of Bahrain, said: “The Bahrain residential market still represents an excellent opportunity for investors….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Propertywire.com: Recovery in global property markets is likely to be slow as no one is predicting any fast movement in the bank lending systems despite unprecedented government bailouts.

The real cost of the finance crisis is slowly emerging today as banks in Europe reveal just how much they need to avoid going bust and concern grows about the state of countries close to Russia who are facing severe difficulties. At least £37 billion is needed in the UK to shore up the country’s struggling banks including Royal Bank of Scotland and Lloyds TSB, it has been announced….. Full Article: Source

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From Propertyeu.info: Losan Hotels World has announced it is launching a new fund to acquire EUR 1.6 bn of hotel assets around the world over a three-year period, starting in 2009.

The Madrid-based firm owned by César Losada and Spanish banking groups also said on Monday that its first fund closed with a EUR 750 mln portfolio of 15 top-class hotels, providing some 4,200 hotel beds, in main European and American cities. This first fund achieved annual returns of over 45%….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Propertyeu.info: Royal Bank of Scotland (RBS) and HBOS are among the list of ailing UK banks set to receive a capital injection under the pan-European bailout scheme agreed by European leaders at the weekend.

Under the rescue operation, designed to restore confidence to the financial markets, RBS will take nearly EUR 25 bn of capital from the UK government, while merger partners HBOS and Lloyds TSB are set to get an injection of nearly EUR 22 bn….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From BBC: The UK property market is likely to bounce back before those of other countries because “we failed” to build enough houses, Gordon Brown has said. The prime minister told a City audience the US and Spain had “overbuilt” homes during the years of rising prices.

In contrast the UK had a “pent-up demand”, as not enough had been built. He said the UK problem was not shortage of demand for homes at “the right prices” but a shortage of mortgages “at the right prices for people to buy”….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Housefund.co.uk: Asking prices continue on a downward trend with an average fall of 3.8% across the country in the past 3 months, according to the latest report published by the property website Daft.ie.

The national average house price now stands at €312,500, 10.7% lower than the same time last year. Clare and Cork county were the worst affected counties with drops of 7.8% and 7% respectively, while in Roscommon, Tipperary and Leitrim prices fell by over 6%….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Propertywire.com: South Africa’s first international branded entertainment theme park to include residential villas, hotels and a marina is to be built by a Dubai based developer.

Amazulu World will be a multi billion dollar themed eco-friendly entertainment and mixed-use destination development covering 16.500 hectares on the north coast of Durban. Despite political worries about South Africa the government is continuing to invest in infrastructure and the hosting of the 2010 World Cup is expected to attract investors….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From FT: As recession looms, it is striking that Britain’s most prestigious architecture prize has been won, not by a glitzy embodiment of corporate or public ambition but – for the first time in its 13-year history – by a housing scheme.

However, whether or not the recipient of the Royal Institute of British Architects’ Stirling Prize reflected a changing zeitgeist or simply underlined the poor standard of most UK housebuilding, a scheme of the quality and intelligence of Cambridge’s Accordia deserved its evening in the televised spotlight on Saturday….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Forbes.com: New Zealand’s National Property Trust said it was looking at either merging or liquidating the trust as the result as a strategic review. The board was looking at a wide range of options, and had already begun merger discussions, Chairman Kevin Podmore said.

The National Property Trust has around NZ$280 million of commercial, retail and industrial properties around the country….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Washingtonpost.com: Until they crashed along with everything else the past few days, shares of real estate investment trusts were one of 2008’s best hiding places. Now REITs look as vulnerable as other financial investments for the next few weeks, or until the credit panic fades.

That’s because many REITs are about to issue third-quarter earnings and financial reports, which will reveal where they stand on rolling over or refinancing debt and whether their credit situation has deteriorated. …. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Nuwireinvestor.com: Residential housing prices are expected to fall in China just one year after the nation saw the highest price rises in the world in that category. And Beijing in particular faces an oversupply of housing, much of it built for the 2008 Olympic Games.

In 2007 China experienced the highest rise in residential property price in the world, with prices in major cities doubling over the past few years. Chinese housing price changeThe first half of 2008 however saw a marked slowdown….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Thehindubusinessline.com: While banks do not anticipate an immediate decrease in lending rates after the 150 basis-point cut in Cash Reserve Ratio by the Reserve Bank of India, real estate developers expect the measure to soften home loan rates for its consumers.

Demand for real estate property has decreased by nearly 25-30 per cent in the country over the last 18 months, when home loan rates soared from an average of 7 per cent to as high as 12-13 per cent. “The home loan rate in India is among the highest in the world and we expect it to be reduced by at least 100 basis points after the cut in CRR,” said Mr Pradip Kumar Chopra, Chairman, PS Group….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Investors.com: As the housing market stumbled, commercial real estate still had legs to stand on. But those legs started buckling this year, pounded by the weakening economy and tightening credit.

Last week, one high-profile set gave in. General Growth Properties, (GGP) the giant mall REIT, plunged 50% to all-time lows as investors worried it wouldn’t make payments on its $27 billion debt….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From ZF: Austrian investment fund Immoeast, the top buyer of real estate assets in Romania in recent years, will start selling some of these assets on the Romanian market, where it owns properties that were assessed at 3.4 billion euros at the end of June.

The capitalisation of Immoeast on the Vienna Stock Exchange reached approximately 800 million euros, down 87% from the same time last year when the market value of the company exceeded six billion euros….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Myiris.com: Realty has seen a sharp slump and this has sent the world economy into a dizzying cycle, the question on everybody`s mind is Is it time yet to invest in Real Estate? The simple rule across all investment markets is `Buy low; Sell high`, it holds good even in the Real Estate market.

But what one waits for is the cycle to bottom out which will enable us to buy at the lowest point, this could be crucial as one could often miss the same. Especially in case of Real Estate where the trend reversal would happen in leaps and bounds and the cycle is long term, the trend reversal could mean significant opportunity loss. According to a survey made by The Associated Chambers of Commerce and Industry of India (ASSOCHAM), real estate boom will further roll down in 2008 and it is only the beginning of a mega fall which is awaited….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Citywire.co.uk: Although German-listed real estate investment trusts and property companies have come under increased pressure as the global credit crisis intensifies, SEB Asset Management’s head of real estate equities Thomas Koerfgen and real estate strategist Thorsten Schilling say the German property market is still stable.

The credit crunch claimed its first first real estate investment trust (Reit) victim on Friday, as Japan’s New City Residence filed for bankruptcy….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Mddailyrecord.com: Maryland is boosting tax collections from firms that use their own real estate companies to create tax write-offs based on lease payments for properties in the state.

Comptroller Peter Franchot’s office announced Monday that it had secured a $10.8 million settlement with a company that has used what he calls a “captive” real estate investment trust under new regulations that the state adopted and passed into law last year. The recovery is from three tax years….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Etaiwannews.com: Xingye Real Estate Agency Co’s (Xingye Real Estate) MaoHwa international village branch manager Zhang Jian said that Beijing is suffering a huge sell-off in the housing market, driving a sharp shrink of sales value to $400,000.

Given that the Beijing second-hand real estate market shows chinks in its armour for the first time in years, the estimated sales volume this year will fall to 80,000 sales, hurting the businesses in local real estate market….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From IPE: The total return of Italian pooled property funds dropped during the first half of 2008 but still managed stay in positive territory of 4.1%, according to the latest results from IPD’s Italian Pooled Property Fund study.

IPD, the UK-based provider of commercial real estate performance data, monitored a total of 16 blind pool funds and 15 seeded funds for its Italian PPFI and found the 12-month total return figure for Italian PPFI fell from 9.5% in December 2007 to 4.1% in June 2008….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Bizjournals.com: Commercial real estate is alive and well. I know that is not a popular position amid the dire reports of Wall Street bailouts and financial meltdowns.

The fact is that good commercial real estate continues to perform well in today’s environment. I am talking about real estate that is in well-positioned, population-dense areas — real estate that is well-built with a good mix of stable tenants. There is no question that the financial capital market woes have affected the commercial world. There have been dramatic effects in the short term….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Smartcompany.com.au: The chief economist at ANZ Bank, Saul Eslake, has provided a ray of sunshine for property owners with his bold pronouncement that Australia is unlikely to experience an across-the-board fall in house prices as has occurred in the United States.

While some particularly bearish economists have tipped local house prices falling between 30% and 40%, Eslake says concerns about how high house prices are relative to income have been overdone….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Assetz.co.uk: Those looking at investing in property around Europe may have been doing a lot of revising recently. The appeal of many new markets in eastern Europe has waned. Portugal has seen better times and Spain is in a deep trough. Alternatives are sought, with stability in these turbulent times being an appealing aspect.

For this reason, many look to France, which can offer not just stability but easy access, varied scenery and property types and lifestyle attractions that may particularly appeal to investors who will want to live there for part of the year. These factors may offset the absence of soaring values….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Propertyshowrooms.com: Spain is a very good place to buy at present because of the recent fall in prices, it has been stated. Oliver Chandler, spokesperson for Spain Magazine, said the country may be a difficult place for agents and developers because of the market downturn, but for buyers “prices are very favourable even despite the strength of the euro against the pound”.

He added that while there are many good destinations that might appeal to people such as Florida or New Zealand, Spain has the advantage of proximity to Britain and the plentiful supply of low coast air travel….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From Propertyshowrooms.com: Those thinking of investing in property in Sydney will find that Australia’s largest city has been spared the slump in house prices that have occurred in major world cities elsewhere.

Director of economic and market analysis at Citigroup Shane Lee told the Sydney Morning Herald the next couple of years will see house prices in the city increase, unlike in come other major metroplitan centres around the world. The good news for buyers of Australian property is that Mr Lee does not believe it will be the top end where properties are due to rise most in value….. Full Article: Source

Posted on 14 October 2008 by Laxman |  Email |Print

From IPE: Bre Global, a property research and consultancy group specialising in the assessment of the environmental and social impact of property developments, has launched what is said to be the first pan-European retail sustainability standard – a ‘green’ code of practice designed to ensure commercial development projects have minimal impact on the environment.

The new standard, which is supported by the International Council of Shopping Centers (ICSC), is initially aimed principally at shopping complexes across Europe initially and is undergoing a pilot assessment period at two retail park projects in Germany and Europe, the results of which will be incorporated into the standard later this year….. Full Article: Source

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