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World Cup Could Create Property Boom In Brazil
Hosting the football World Cup, much like any other international sporting event, offers a whole host of various opportunities that can be beneficial to both a country’s culture and economy. The chance to flaunt itself on the world stage both on and off the pitch is one that, from a business point of view, is arguably too good don’t miss out on. Indeed, business stands to greatly benefit from the World Cup’s arrival, whether it is involved directly through means such as ticket management, or indirectly by way of hotels to accommodate supporters embarking on their once-in-a-lifetime trip. The idea appears to be to make Brazil a desirable brand, which everyone visiting will want a piece of. It is this idea alone that has whetted the appetite of property investors, who have already seen the tournament, and the Olympic Games two years later, as a unique chance to multiply profits and establish a firm financial foundation on which to build on for years to come. One only has to look at previous tournaments to see why there are is such excitement in the property sector. Past successes There were a number of successes being celebrated in the wake of the 2010 World Cup in South Africa. The number of tourists visiting the country during the tournament reached around 300,000, all of whom pumped millions into the economy thanks to spending money on meals, entertainment and accommodation. And it seems that many of those who visited liked what they saw, with the country seeing a significant rise in interest towards its property sector. The Times Live reported that the tournament had led to many celebrities considering South Africa for property investment. Many real estate agents noted a rise in viewings from high-profile figures during the month of the World Cup. Members of the elite and wealthy, and even politicians expressed interest in high-end properties in areas such as the desirable suburbs of Cape Town’s Atlantic Seaboard, many coming from countries such as the UK, US, Italy and France all expressed an interest. Even Qatar, which is not due to host the tournament until the year 2022 has seen its property market heat up in recent times, since the building work in Doha first got underway. According to a BBC report, much of the construction work has been for office spaces, which will be setup in order to accommodate the inevitable huge swathe of interest from businesses around the world. Demand driven by tourism Residential markets are also making positive strides, in order to accommodate the sheer numbers of people set to descend on the country and gain a piece of the financial benefits that come with the presence of international businesses. Demand in the real estate sector has been further strengthened due to strong economic performance and high energy prices, combined with significant government investment. And even if the World Cup fails to set Brazil’s property market alight, the country will have a unique second chance just two years later when the Olympic Games arrive. It is rare that two global sporting events are staged in the same country within such a short space of time, and the Olympic example is arguably just as glowing in terms of having a potentially positive effect on the country’s real estate sector. One only has to look at the effects from the fallout of the 2012 Games in London last summer to see that the Olympics could soon be just as effective in contributing to a prospective property boom. Indeed the period between 2012 and 2017 is expected to bring a total of 1.1 million visitors, bringing with them around £900 million, all as a direct result of the Games. There is no reason why the same effect cannot be recreated in Brazil over the next few years, with investment outliving the arrival of some of the world’s most prominent athletes. Rio itself is a city that is widely expected to set an example to the rest as to exactly what can be achieved when investors take advantage of the potential property boom. The city is already the most visited in the whole of the southern hemisphere, attracting more than 2.8 million tourists each year. According to the consulting firm Knight Frank, the R$30 billion being spent on infrastructure is certain to increase this number further, heightening the chances of investment in local property, as well as pumping millions into the economy. Knight Frank has also revealed that property prices in Brazil surged by 15.2 per cent during the third quarter of last year. Tim Morgan, chairman of the Leeds-based investment firm Emerging Real Estate, told the Yorkshire Post: “Forbes is forecasting that the World Cup will bring in around £36 billion into the Brazilian economy by 2014. “By 2012 Brazil had invested almost £7 billion in infrastructure projects such as stadiums, airports, improved roads and public transport, improving the lives of ordinary Brazilians and also making the country even more attractive to prospective investors.” Housing boom As well as attempting to attract investors and buyers from abroad, Brazil is also keen to address what many perceive to be a housing shortage for its own citizens, and the World Cup and Olympics have given developers the perfect reason to do so. One scheme to have emerged recently is the Minha Casa Minha Vida programme, which aims to build around three million homes over the course of five years. Mr Morgan added: “The initiative was designed to build and provide affordable housing for people on low to moderate incomes and harness investor funds to build the properties.” The potential boom is by no means limited to cities such as Rio either. Indeed there are some analysts who believe that the property markets in other areas of the country are set to be handed a chance to take advantage of the huge amount of tourism that will be witnessed during one of the most popular sporting showpieces on earth. A massive boost to tourism in the north east of Brazil is also set to ensure that international in interest in property is heightened to a level that has probably never been seen before. Like Rio, cities like Natal are already popular with many tourists, but organisers and developers are still keen to ensure that the city lives up to its full potential in terms of attracting investment. Some believe that one of the most popular areas will be the small beach town of Sao Miguel do Gostoso, which is widely regarded as the country’s capital for windsurfing and other water sports. Samantha Gore, sales manager of local real estate firm uv10, told Property Wire: “Sao Miguel do Gostoso has the perfect formula for water sports with year round wind and warm water temperatures, whilst being safe and quiet for families. The town is thriving with bags of character and boasts pretty bougainvillea draped multicoloured houses, a white sand beach dotted with fishing boats and coconut palms plus facilities such as a medical centre, day Spa, boutique hotels  and fresh seafood restaurants. “The property market shows a strong, healthy rate of growth with local and international demand. Little wonder Sao Miguel do Gostoso is regarded as one of the world’s best places to live.” It seems that the influence of the world’s greatest sporting spectacles are capable of reaching almost every corner of the country. Continue reading
Investors Find Rich Property Pickings In Eurozone
by Jim Atkins : April 24, 2013 Eurozone economies might be in the doldrums, but some rich property pickings have seen France and Spain benefit from renewed interest from investors. However, it is a different story in financially stricken Cyprus, where plummeting home prices are putting off buyers. In Spain, which has large amounts of unsold properties and a struggling economy, couldn’t be more different. Figures from Eurostat, the European Union’s statistical office, have put the country at the top of the continent’s destination league for tourists once again. British tourists make up one in five of Spain’s visitor numbers and the French make up 18%. Spain is most popular for Portuguese tourists with 39% of visitors. Popular Spain Spain’s popularity with visitors is underlined by an increasing interest in property investment. The country’s Ministry of Development says that investment by overseas buyers increased by nearly 14% last year or the equivalent of £5.4 billion. That’s an increase over the 2011 figure of £4.8 billion and shows that investors believe that Spanish property will rebound in value and its economy will eventually recover. It’s a similar story in France which has seen real estate prices slump in recent times as the government imposed harsh property taxes. This hasn’t put off buyers from overseas who have, according to real estate firm Savills, spent more than £2 billion on commercial real estate in the country in the first three months of 2013. The figures match the amount spent in the same period last year, with buyers particularly keen on hotels and care homes which have seen sales increases of 119% and 85% respectively. Slump in Cyprus These sectors are so popular that they accounted for four out of every seven property deals in France, and the firm says that commercial property looks good for investors. Meanwhile, the on-going financial crisis in Cyprus has seen a major slump in property prices. Values in the capital Nicosia have seen prices drop by nearly 25% in the centre and nearly 45% in the suburbs. The big worry is for the performance of home loans, with many homebuyers who bought in the boom now in negative equity. However, with so few recent home sales, Cyprus Lands and Surveys Department says it is difficult to assess accurately what the decline in prices has been. The country’s Associations of Real Estate Valuers and Estate Agents has given figures and reckon while apartments in the capital have dropped in value by a small amount, other properties have seen falls of up to 50%. Continue reading
Investment: Czechs Reap Benefits Of Poland’s Slowing Economy
http://www.ft.com/cms/s/0/c8812ae2-8666-11e2-ad73-00144feabdc0.html#ixzz2Rx5WNGO8 By Katka Krosnar In recent years Poland has attracted most of the commercial property investment in central Europe, accounting for more than 75 per cent of the total volume in some years. This is partly because of the size of the market compared with its counterparts and its success at avoiding recession. Poland has become a core investment market for some western European property funds. Over the past few months, however, there has been a shift, with the Czech Republic gaining popularity as Poland’s market becomes static and concerns grow that some sections of the Polish property market may have overheated, says James Chapman, a partner at Cushman & Wakefield in Prague. The total investment volume in the Czech market is expected to double this year compared with 2012 and will reach €1bn, according to Cushman & Wakefield’s statistics. While total investment in central Europe’s property is forecast to rise this year, Poland’s share is expected to fall slightly, from €2.8bn to €2.5bn. Hungary is expected to see about €300m of investment while Slovakia should receive some €140m, less than elsewhere but a big improvement on last year’s mere €17m. “The current development in Prague of four city centre projects that had not been pre-leased before the launch of construction is an important indication of current confidence in the market,” says Omar Sattar, managing director at property brokerage Colliers International in Prague. After a sluggish 2012, caused by lingering fears about the eurozone crisis and uncertainty after the closure of some German open-ended funds, commercial property is expected to pick up significantly in 2013, with several large office transactions set to close in the first half. The Czech Republic has always been popular with international investors, who consider it a stable market and a “nice place to do business”, adds Mr Chapman. One key to its popularity is a dynamic capital city, in which many wealthy people are making property investments, says Mr Chapman. According to Colliers, Prague accounted for almost half of the value of domestic transactions in 2012. For example, CPI, the Czech investor, acquired 18 retail properties in 2012, while CTP, a Czech Republic-based business park developer, bought Belgium company WDP’s Czech portfolio and the Honeywell facility in Brno. While western Europeans, particularly the Germans and UK-managed funds, continue to be core investors, the region has attracted money from Qatar, South Korea, the US and Canada. Investors have focused on prime assets since the crisis. At the 2007 peak, many were happy to buy new buildings in almost any location but now projects have to be in a good location or be top quality to attract investment. In recent months there has been a noticeable shift, with investors showing interest in higher-risk assets, such as those needing reconstruction, says Kinga Barchon, leader of the property team at PwC in Warsaw. Strong macroeconomic indicators and the availability of good-quality assets will still attract investors to Poland, says Ms Barchon. As in other markets, limited access to credit has narrowed the field of investors and developers. Often only those who can fund early stage construction themselves, and find credit later, can start projects that are not pre-leased, Mr Sattar of Colliers says. Office developments accounted for 61 per cent of the total value of investment transactions in the Czech Republic and almost 40 per cent in Poland. These have focused mainly on capital cities, accounting for 90 per cent or more of commercial property investment. In the first three months of this year, some €646m was invested in office developments, with significant transactions including the purchase of New City in Warsaw by Hines, which has its base in Texas. Ms Barchon says Polish cities Wroclaw, Krakow, Gdansk and Poznan are attracting a lot of developer interest. However, residential property investment in Poland is expected to decline following the end of government support for people buying smaller apartments. Continue reading
