Tag Archives: alternative
UK Ignores Land Change In Biomass Criteria
By Dave Keating – 27.08.2013 draft proposalcirculated by the European Commission’s energy department earlier this month. The criteria would ensure that the extraction of energy from biomass, largely wood from forests, is not causing more emissions through land displacement than it abates. Under the UK proposal, published on Thursday (22 August), large biomass energy plants would have to demonstrate that they are emitting 66% less carbon than fossil fuel in order to qualify for renewable energy subsidies from 2014. This would rise to 72% in 2020 and 75% in 2025. The threshold is stricter than the 60% suggested by the Commission’s energy department. But like the energy department’s draft, the UK criteria would not factor in indirect land use change (ILUC), which would include such phenomena as loss of carbon storage potential for trees or the increased use of land for displaced food crops. The 2008 renewable energy directive obliged the Commission to come forward with sustainability criteria for biomass and biofuel, but these have been long delayed. A proposal put forward last year to factor ILUC into decisions about which biofuel can receive renewables subsidies and meet fuel objectives has encountered huge resistance from the biofuel industry, which says the restrictions would destroy their business. Environmental campaigners are angry that the draft proposal circulated within the Commission does not include ILUC, saying the Commission has backed off because it wants to avoid the same level of controversy it has encountered with the biofuel proposal. There is conflict with other Commission departments which want to include ILUC and carbon debt, according to Commission sources. However the biomass industry maintains that biomass does not cause ILUC in any significant way and comes from land that would not be used to grow food crops. The Commission is expected to put forward its proposal in October. © 2013 European Voice. All rights reserved. Continue reading
Middle East, North American Buyers Drive European Property Investment Market
Middle East and North American investors are the major drivers of increased activity in the European commercial real estate market and buyers from outside the region now account for more than a quarter of all transactions in H1 2013, according to the latest data by CBRE, the global real estate consulting firm. Investors from the Middle East increased investment activity, accounting for nine per cent of the entire market and 21 per cent of cross-border transactions in H1 2013. Capital from the Middle East is generally institutional in nature, with nearly half of the total coming from the region’s sovereign wealth funds. Transactions from Middle Eastern buyers show a strong bias towards London (nearly 50 per cent of the total) and offices, although there were several large retail properties among the purchases made. “London remains the destination of choice for foreign investors due to its solid growth potential and its status as a global financial hub, alongside its stable political environment and a transparent legal system, which are key for international and regional buyers alike,” commented Nick Maclean, Managing Director, CBRE Middle East. Buyers from North America accounted for a steadily increasing share of the market (13 per cent of the entire market and 24 per cent of cross-border transactions in H1 2013). This could have a significant effect on the dynamics of the property market as US investors, which make up the vast majority of activity, typically look at a more diverse range of markets. The total value of commercial real estate investment activity in Europe continued to grow in Q2 2013 at six per cent higher than the total for Q1 2013. The €32.6 billion recorded over the quarter shows a 22 per cent increase on the same quarter last year and is the highest Q2 total since 2007 (before the financial crisis). The level of cross-border investment in Europe continues to increase, both in absolute terms and as a proportion of the market as a whole. Over the first half of 2013, foreign buyers accounted for 44 per cent of all transactions (by value) compared to 40 per cent in the second half of 2012. A significant change has developed in the sources of cross-border real estate investment, with intra-European investment (where the buyer is from another European country) accounting for just 16 per cent of transactions in H1 2013. This percentage had been holding steady at around 20 per cent of the market throughout 2011 and 2012. Investment capital from outside Europe is becoming increasingly important to the market and now accounts for 28 per cent of all transactions in H1 2013 (from 19 per cent in H2 2012). Even within this group of non-European investors there has been a marked change in the sources of capital. Within Europe, German investors remain the largest group of cross-border buyers; the open-ended funds continuing to be active buyers around Europe with acquisitions totaling well over €1 billion in H1 2013. The German ‘Spezial’ funds are also active, but their acquisitions have been strongly focused on Germany in the first half of this year, stated the CBRE report. The long-term trends in buyer mix that have been evolving since the financial crisis have continued into 2013. Most notable of these is the growth in direct institutional investment in real estate, which has increased steadily over the last six years from nine per cent in 2007 to 26 per cent of the total in H1 2013. An increase in activity by sovereign wealth funds has been responsible for some of this investment, but both pension funds and insurance companies are far more active than was the case before the financial crisis. H1 2013 also saw a significant share of large transactions, with 134 of €100 million or more recorded over the period, between them accounting for 47 per cent of the total turnover of the market. It is a feature of the market recovery that as total investment activity has increased so too has the proportion that has been made up of large (€100 million plus) transactions. At the low point in market activity (H1 2009), when commercial real estate transactions totaling just €26.5 billion were completed in the first of the year, these large transactions accounted for 28 per cent of the total. Jonathan Hull, Head of EMEA Capital Markets, CBRE, added, “The increase in the proportion of the market comprised by large transactions coincides with an increase in the amount of non-European capital flowing into the market. It has long been the case that buyers from outside the region are focused on larger than average assets and H1 2013 was no exception.” Continue reading
Buy-To-Let Boom Set for Long Stay, Reports Leading Property Firm Knight Knox International
With average house prices breaking the £200,000 barrier, the buy-to-let boom is set to continue as first-time-buyers are ruled out of the market and forced to continue to rent, particularly in cities such as Liverpool and Manchester, where home-building remains low. buy-to-let mortgage lenders offer a much more free-handed approach, with £16.4 billion being lent to savvy investors, who saw the financial rewards and longevity of the market, in 2012. This has not slowed down in the second quarter of 2013, with 40,000 mortgages worth £5.1 billion, being given to buy-to-let investors, according to data published by the CML; determining that both the number of buy-to-let loans, and the value of lending, were at their highest level since the third quarter of 2008. Although rewards are strong for landlords investing in the buy-to-let market across the country, LSL confirmed in their buy-to-let index for April 2013 that rewards were in fact the strongest in the North West, where yields were highest. The index documents that the North West produced yields of 7.2%, topping London’s 5.0%, and an average rent of £568, outshining the average rents of near counterparts Yorkshire and the North-East. Two cities which contributed largely to the North West’s table-topping performance, in terms of buy-to-let, were Manchester and Liverpool. Case Study: Manchester Voted by Britons as the Nation’s second city in a survey by the Trinity Mirror Data Unit, Manchester is a city bursting with renters, some who live there to avoid commuting to work, some who are studying at University and some, who well, just enjoy the experience of living in a place awash with culture and entertainment. Investors can purchase units at a relatively cheap price in Manchester, when compared to other cities, yet still claim average gross rental yields of 7.6%, with renters willing to pay high prices to reside in this cultural hub. HSBC also named Manchester as a top four UK buy-to-let-hotspot in a study carried out this April, confirming the high-performing rents that landlords can retain when investing in Manchester. Investors can also expect to receive these high-performing rates over a long period of time, with the National Housing Federation predicting that rental rates will grow in the city by 36% by 2018. Case Study: Liverpool Liverpool is an area which is failing to supply the increasing amount of private renters, who desire to live in this thriving city. Although rental stock in Liverpool has grown by 79% between 2001 and 2011, this is proving inadequate in housing the city’s growing population, which has mushroomed by 5.5% over the last decade to reach 466,400. In a bid to counter this surging demand from private tenants, the Mayor of Liverpool has pledged to deliver 5,000 new homes in the city and, with statistics from Shelter revealing that the average single person in the city needs nine years to save the deposit for a house, while the average couple need four years, this influx of properties is sure to be needed for rental stock. The Solution? More purpose-built student accommodation has been heralded as the answer to an increasing demand for rental stock. Real-estate adviser Savils Plc argued in a report that the ever-increasing amount of HMOs (Houses in Multiple Occupation) are inflicting a damaging restriction on the housing supply, making the call for more purpose-built student accommodation as a solution to free-up social housing and rental stock, one of critical importance. Knight Knox International are in agreement with this rallying call, having sold properties in areas such as Manchester and Liverpool where student demand and housing shortages are concentrated. In reaction to this increasingly urgent shortage, Knight Knox International has put themselves at the forefront of construction, building purpose-built student accommodation, such as X1 Chapel Street in Manchester, to free up HMOs. The property firm has also added more residential stock through refurbishments and construction, avoiding using rental stock already on the market, which would be detrimental to local markets considering the demand for more local housing. In Manchester, the property investment company have recently launched residential stock at X1 Town Hall , which is already 75% sold out within only a month of launch, highlighting that investors see Manchester as an area ripe for investment and Merebank Court in Liverpool, which is already over 60% sold out,again, highlighting the demand for good quality rental stock in Liverpool. To enquire about residential and student accommodation properties in Manchester and Liverpool please contact Knight Knox International’s buy-to-let experts on +44 (0)161 772 1370. Continue reading
