Real estate sector outlook reviewed

MANAMA: Capital Club Bahrain launched the first of its 2013 Business Forum series with an in-depth look at real estate investment in the Middle East.

Sponsored by Naseej, three of Bahrain's influential industry experts examined the 2012 real estate market in Bahrain and the region, and highlighted market opportunities and challenges and shed light on how to boost market growth.

The panel consisted of industry heavyweights Naseej chief executive Christopher Sims, Frank Knight Middle East chief executive Don Bradley and Bahrain Bay chief executive Robert Lee.

The general consensus of the panel was a shared optimism about the real estate climate in Bahrain for the coming year, despite an urgency to develop longer-term vision of projects, with the appropriate approvals and measures in place to safeguard stakeholders.

Market research and auditing is key in assessing successes and failures to avoid repeating mistakes and ensuring investors enter the market in a cautious and educated manner.

Capital Club's Business Forum series will take place on a monthly basis, focusing on topics that affect the business community at large. The next event will focus on the region's oil and gas industry.

For the original post visit: http://www.gulf-daily-news.com/NewsDetails.aspx?storyid=346747

Boosting Real Estate Industry Growth

The Philippines is experiencing a boom in the real estate market. The growth movers of the industry are funds sent home by Overseas Filipino Workers (OFWs) and the robust Business Process Outsourcing (BPO) industry. The real estate sector registered growth of 18.8 percent in the third quarter of 2012, making it the country’s fastest-growing industry.

BPO companies are fueling the demand for office space, said United States of America global property manager CBRE Global Corporate Services, noting that 80% of transactions in 2012 were made by BPOs. The trend is expected to continue in 2013 with the continued growth of offshore outsourcing and the call center industry.

Since 2006, the CBRE reported, over 50 percent of office space leased in the country has been taken up by BPO companies. Multinational companies are moving to the Philippines because of its excellent pool and low cost of skilled labor. CBRE projects that developers will also focus on the mid-income residential market in 2013, reflecting the demand from the growing population of young professionals and their families.

Another USA global property manager, Jones Lang LaSalle, said that more Filipinos are becoming homeowners because of low interest rates and affordable financing conditions. A big number of OFWs invest their money in real estate. CBRE and Jones Lang LaSalle, both international companies that do business in the Philippines, are optimistic that the country will get an upgrade to investment rating in the next six months to further boost the economy and the property market.

We congratulate the Jones Lang LaSalle International headed by Director David T. Leechiu and CBRE Philippines Chairman Rick M. Santos, all the best and success in all their endeavors. CONGRATULATIONS AND MABUHAY!

For the original post visit: http://www.mb.com.ph/articles/391816/boosting-real-estate-industry-growth#.UQoXtJEWbDs

Downtown real estate shrugs off Sandy

Despite taking a massive hit from Superstorm Sandy, the downtown real estate market has held up remarkably well.

"There was a lot of concern, but despite Sandy we had a very strong fourth quarter," said Sheldon Cohen, a senior managing director of CBRE Group Inc., speaking at the real estate services firm's year-end market review press conference. He noted that leasing in the final three months of the year downtown totaled 1.2 million square feet, 9% more than was leased in the year-earlier quarter.

In fact, the largest deal of the entire year downtown was completed after the storm. That was a lease for 237,000 square feet signed by the New York State Department of Financial Services. There were also no major deals that were canceled because of the storm, according to CBRE, which reported that 94% of the office space in the market is now fully operational.

He noted that more than half of last year's leases were signed by companies outside the traditional financial and insurance sectors. That includes Nielsen Media Research, which took 115,000 square feet, in the fourth largest lease signed last year.

"This market is continuing to reinvent itself in terms of the type of tenants coming down," said Mr. Cohen.

That process will likely continue this year, during which 3 million square feet is expected to hit the market, much of it courtesy of 1 and 4 World Trade Center. All that new space will help to lower the average age of space on the market. This year, 58% of the space available for lease downtown was built after 1980, nearly three times midtown's 20%.

Elsewhere in Manhattan the picture was not as encouraging last year. Not only was the total square footage of commercial space leased 19.9% off the pace of 2011, at 22.3 million square feet, but an unusually large number of those deals were renewals of existing leases. Such deals typically pack less of an economic punch than relocations, which involve moving expenses, build outs of the space and other items.

Last year, renewals accounted for 35% of the total leasing volume, a 10-year high. Even more striking, the 10 largest deals of 2012 were all renewals.

"I cannot recall another year where we have not had one relocation in the top ten," said Peter Turchin, a CBRE executive vice president. "What was missing last year was the big relocation."

Even midtown south, Manhattan's hottest market, struggled a bit last year. There leasing volume fell 20%. Asking rent per square foot, however, still managed to climb to a record high of $55.14. That was $8.29 above the downtown average, and $12.66 below the year-end average for midtown.

For the original post visit: http://www.crainsnewyork.com/article/20130115/REAL_ESTATE/130119944

U.S. Real Estate is Next to Boom; Just Ask Norway

Norway’s $660 billion sovereign wealth fund, the world’s largest, plans to invest about $11 billion as it enters the U.S. real estate market.

The fund, mandated by the country’s finance ministry to eventually put 5 percent of assets in property, wants one-third of that, or 1.7 percent, to be in the U.S., said Yngve Slyngstad, chief executive officer of Oslo-based Norges Bank Investment Management, which oversees the pool. The fund held 0.3 percent in real estate, 60.3 percent in stocks and 39.4 percent in bonds as of the end of September, according to its quarterly report.

“The U.S. is the next real estate market to invest in,” Slyngstad said yesterday in an interview at Bloomberg LP’s headquarters in New York.

Sovereign wealth funds, or state-owned investment pools, are seeking to diversify their risk by expanding investments beyond stocks and bonds. China Investment Corp., which oversees about $482 billion in assets, in 2010 helped refinance a Manhattan office tower co-owned by private-equity firm Carlyle Group LP. (CG) Norway, seeking higher returns and lower risk after record losses in 2008, gave approval in 2010 for its fund to invest as much as 5 percent of its value in real estate over several years.

The fund is focusing on conservative property investments, such as large office complexes in major cities and developed malls, Slyngstad said in the interview. It has already bought commercial property in London, Paris, Frankfurt, Berlin and Sheffield in the U.K., and on Nov. 29 made its first real estate investment in Switzerland, buying a Zurich office complex from Credit Suisse Group AG (CS) for 1 billion Swiss francs ($1.08 billion).

Higher Yields

As sovereign wealth funds become more active buyers of real estate, investors such as Blackstone Group LP (BX) expect to increase sales of property holdings. New York-based Blackstone, the largest alternative-asset manager, has $54 billion of real estate assets, including office developments, shopping centers and hotel chains such as Hilton Worldwide Inc.

“The other trend that will be helpful for us to exit some of the larger things we own, particularly the higher-quality assets in the gateway cities, is the rise of the sovereign wealth fund,” Jonathan Gray, Blackstone’s global head of real estate, said last month at the Bloomberg Commercial Real Estate Conference in New York. “Sovereign wealth funds are enormous pools of capital around the world,” and real estate offers higher yields than government bonds, along with a hedge against inflation.

Largest Funds

More than 60 percent of sovereign wealth funds invest in real estate, either directly or indirectly through other funds, according to Preqin Ltd., the London-based research company. Larger government pools are more likely to make property investments, Preqin said in an April research note, with 83 percent of those managing at least $250 billion being active in the asset class.

Norway, Europe’s second-biggest oil and gas exporter, generates money for the fund from taxes on oil and gas, ownership of petroleum fields and dividends from its 67 percent stake in Statoil ASA (STL), the country’s largest energy company. The fund last month said it returned 4.7 percent in the third quarter, after a decline of 2.2 percent in the previous three months.

To contact the reporter on this story: Devin Banerjee in New York at dbanerjee2@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

For the original post visit: http://www.businessweek.com/news/2012-11-30/norway-wealth-fund-to-invest-11-billion-in-u-dot-s-dot-property

Local real estate sales surge

Eastern Connecticut home and land sales increased in the third quarter, eliciting cheers from leaders in the construction and real estate industries.

Sales of single-family homes in New London and Windham counties combined rose 17.33 percent to 799 units from 681 a year earlier while land sales, an important indicator for new home construction, grew 147.37 percent to 47 units from 19, the Eastern Connecticut Association of Realtors reported Tuesday.

“Inventory is down and demand has been pent up,” said Renee Main, executive officer of the Salem-based Builders and Remodelers Association of Eastern Connecticut, which represents construction companies. “Hopefully, after the election, people will calm down and things will continue to get better.”

Single-family homes are the largest segment of the real estate market. New London County sales climbed 16.33 percent to 570 units from 490 a year earlier for the three months ended Sept. 30. Windham County posted a gain of 19.90 percent to 229 units from 191. Just as important is the firming trends in prices with New London County’s median sales price increasing 6.26 percent to $233,500 for the period while Windham County rose 3.44 percent to $165,500.

Median price for the two counties combined has risen for three consecutive quarters, noted John Bolduc, CEO of the Franklin-based Realtors association.

“I think consumer confidence has a lot to do with it,” he said Tuesday. “There has never been a better time to buy.”

Connecticut’s growing unemployment rate, including hundreds of recent layoffs at Mohegan Sun, could slow activity going forward, Bolduc said.

Foreclosures are weighing less heavily on the market, enabling prices to stabilize, Bolduc said. Yet it’s taking longer to sell homes with New London County’s average days on market for single-family sales rising to 109 from 94 in the third quarter while Windham County’s days climbed to 97 from 93.

The lower end of the market showed strength with mobile home sales doubling to 42 units from 21. Unit sales in all six market segments tracked by the Realtors association rose with sales for all segments combined rising 20.80 percent to 1,051 from 870, group statistics showed.

Activity is expected to slow in the fourth quarter because it is traditionally one of the year’s slowest quarters, Bolduc said. Financing is still proving difficult to obtain for some in the construction industry, Main said.

Source: http://www.norwichbulletin.com/newsnow/x1146359652/Local-real-estate-sales-surge#

Billions of dollars buried under real estate projects

VietNamNet Bridge – The real estate market has got frozen, while investors have run away, leaving the market in the oversupply status. It is estimated that with 60,000 apartments unsold, roughly 2.86 billion dollars worth of capital has been “buried” under the real estate projects.

According to Nguyen Manh Ha, Director of the Housing and Real Estate Market Management Agency under the Ministry of Construction, Hanoi is facing a serious oversupply; especially, apartments and land in the suburb areas remain unsalable.

Analysts have confirmed that the price decreases have been seen in all market segments, from high-end to popular apartments. The sharpest price decreases have been reported for the apartments priced at over 25 million dong per square meter.

The absurdity of the market is that while it has abundant unfinished apartments, it still lacks finished products of different kinds. While unfinished products remain unsold, thus making it impossible for real estate developers to arrange capital, necessary infrastructure works have not arisen.

Some residential quarters remain deserted with very few buyers, simply because people do not want to live in the areas with no school or market.

The report released by a consultancy firm showed that Hanoi has some 40,000 apartments unsold. The figure is 20,000 in HCM City. This means that 60,000 apartments have been left unsold nationwide.

Vu Dinh Anh, a well-known economist, said if every apartment is priced at one billion dong, then the total investment capital buried under the real estate projects would be 60 trillion dong, or 2.86 billion dollars, a huge sum of money.

Also according to Anh, the biggest problem of the property market now is that sellers offer unsuitable products. Real estate developers sell branded goods in rural areas, or high end and luxury apartments have been put on sale, targeting low income earners.

Therefore, though the accommodation demand keeps rising every year with the population increasing by one million people a year, apartments still cannot be sold. The problem lies in the overly high prices of the products. With the average income of five million dong a month, a worker would have to wait 20 years to be able to buy a house.

“The quality of the products is very good, but the products remain unsold,” Anh said. “I am afraid that the 2009’s scenario would repeat this year. However, unlike 2009, there would be no demand stimulus package to be launched this year to help rescue the market,” Anh said.

Deputy Minister of Construction Nguyen Tran Nam has attributed the current oversupply to the real estate investment wave triggered some years ago. At that time, power companies, oil and gas, insurance and commercial banks all rushed to inject money in the real estate market. This explained why the outstanding loans given to fund real estate projects once reached 280 trillion dong before decreasing to 180 trillion dong at present.

The weak demand has forced real estate developers to slash the sale prices to boost sales. Most recently, after reducing the sale price by 7 million dong per square meter in 2011, the developer of an apartment bloc in Linh Dam urban area in Hanoi has slashed the sale price by another 2 million dong.

Ha from the Ministry of Construction believes that the thing that needs to be done now is to help enterprises clear the inventories. One of the solutions, as suggested by Ha, is that the government should exempt VAT tax, thus leading to the real estate price decrease.

“I strongly recommend exempting the 10 percent VAT tax in order to lower the sale prices,” Ha said.

Source: http://english.vietnamnet.vn/fms/business/48043/billions-of-dollars-buried-under-real-estate-projects.html

Selling real estate without real estate help: unknown territory

With the depressed real estate market we are now facing, some sellers are questioning the need for the services of a real estate agent. Dropping sales' prices and high mortgage payoffs leave home sellers wondering where they can cut expenses to make the sale happen.

Discount internet brokers and for sale by owner companies are promoting their services to an eager and willing market. And legitimate realtors faced with this strong competition and declining sales are struggling to pay office expenses and advertising budgets. Its bad for everyone, except buyers who are willing to jump into unknown territory.

For over thirty years I have always believed the expense of a sales commission was justified by the benefit a realtor provided to the seller even though the cost may have seemed high at the time. I still believe that, but I would never argue that a house seller should pay a 6% percent sales commission.

The day is gone of sellers putting an advertisement in the Sunday real estate section of the local paper, staying home on weekends and acting as tour guide and salesperson and making a quick sale. Now properties can sit and sit with realtors wondering how they can make their advertising expenses in newsprint.

Using the services of a real estate agent can offer some real advantages:

-Overpricing Many sellers overestimate the value of their homes resulting in a very hard time for the owner in selling the house. Real estate agents can offer guidance in setting the selling price of the property based on market value from sales of similar properties in the area. Remember your house is only worth what someone is willing to pay for it.

-Screening When a seller places an ad in the paper to sell their property the ad attracts not only genuine prospective buyers but also browsers and curious neighbors looking for a free tour. A real estate agent will be able to distinguish between the looker and the serious buyer.

-Helpful advice Real estate agents can suggest ways to make the dwelling more saleable painting a room, removing debris, cleaning an offensive odor not noticeable to a seller etc. Agents can suggest how to best describe the features, details and highlights of a house. And they can suggest staging, well worth the expense.

Source: http://www.windycitymediagroup.com/lgbt/Selling-real-estate-without-real-estate-help-unknown-territory/39472.html

Property controls still vital, says Wen

Chinese Premier Wen Jiabao has reiterated the country still needs to resolutely curb speculative property investment as controls on the real estate sector are still in a "critical period."

Wen made the remarks while making an inspection tour of affordable housing projects in Tianjin in North China Friday.

He pointed out that the government's controls over skyrocketing housing prices have been in place for more than two years, and that the excessive price rises have been generally curbed.

"But the controls over the real estate market are still in a critical period," he warned.

He said that increasing the effective supply of homes to the market will be more important to consolidate the previous achievements in stabilizing housing prices.

China has tightened its curbs on the property sector since 2010 in an effort to bring rising home prices back to a reasonable level. The government has restricted home purchases in several cities while requiring higher down-payments and introducing property taxes.

Official data showed that 50 cities out of a statistical pool of 70 major cities recorded higher new home prices month-on-month in July, up from 25 in June, according to the National Bureau of Statistics.

Wen said that progress in the nation's affordable housing projects will provide important support in stabilizing property prices and consolidating the government's efforts to tame excessive home prices.

The premier said the country's affordable housing should not be evaluated solely on the number of buildings completed or in construction, but also on whether the homes are delivered to the market in a timely manner to solve people's living problems.

Source: http://www.globaltimes.cn/content/730645.shtml