Tag Archives: europe
Total investment volume in European commercial real estate down in Q1
Total investment volume into European commercial real estate in the first quarter of 2016 reached €36.8 billion, some 30% lower than the same period last year, the latest research shows. However, several European countries analysed in the report from international real estate firm Savills are seeing increasing investment activity this year. Italy with growth of 54%, Sweden up 33%, Poland up 15%, the Benelux countries up 12% and Finland up 479%, have all performed well. The report says that the data shows that investor appetite is healthy for quality assets in markets with strong fundamentals. In terms of sectors, industrial has gained ground, increasing by around 19% year on year. This was driven mainly by transactions in the logistics and distribution sector in the UK, Germany, Sweden, Spain and the Netherlands, which accounted for more than 80% of the total activity. Over half of the markets across the continent did record a decrease in transaction volumes in the first three months of the year. Lower volumes were observed in the markets which are ahead in the investment cycle such as the UK with a decline of 48%, France down 47% and Germany down 12%. It is believed that the stagnating European economy, the unpredictable outcome of geopolitical tensions in Europe, and the volatility of the stock markets could all be factors influencing investor sentiment and delaying decision making. Savills however insists that these lower volumes are not a reflection of investor demand for real estate in Europe, but of the lack of stock currently available in the marketplace. ‘Demand for commercial real estate in Europe remains strong amongst domestic and cross border investors and deals are still closing at record prices. The predominant threat to an increasing turnover is the lack of good quality assets on offer,’ said Eri Mitsosterigiou, director of European research at Savills On the other hand, Denmark with a fall of 62%), Norway down 47%, Spain down 24% and Ireland down 33%, all experienced dynamic investment activity in 2015, therefore it is unlikely for them to rival these strong performances in 2016. According to Marcus Lemli, head of European investment at Savills, the markets that are likely to continue to be high on investors’ agendas this year are the core markets of Germany and France, which, despite competitive pricing and unbalanced levels of supply and demand, remain attractive due to their solid fundamentals and high liquidity. ‘Strong occupier markets and low development activity is also expected to boost rental growth in these markets over 2016,’ he added. Savills predicts that in 2016 prime CBD rents will grow by 3% to 4% pa in London, by 3.5% in Paris and by 2% in the big four German big cities. From a pricing perspective there is also still some space for further gains in the shopping centre and logistics sectors in Paris, if the yield… Continue reading
Miami property market normalising after years of record growth
After eight years of record or near record residential sales, the Miami real estate market is normalising with steady growth, according to various prominent local market experts. The fast sales growth of Miami middle market properties, the continued high percentage of all cash buyers, preconstruction condo inventory in the rapidly-growing Downtown Miami area and South Florida’s overall population and job increases are boosting the market, they told the recent Real State of the Miami Market event. According to Anthony Graziano, senior managing director of Integra Realty Resources, 2013 and 2014 were extremely strong for the Miami market for fundamental reasons, including pent-up demand. ‘When we look at our numbers today, we are getting back to normal. It’s okay that our market is not growing 15 to 20% every year. In fact, it’s a good thing. I want to grow 5% a year because at some point our wage growth can’t keep up,’ he told the meeting. The event hears that single family homes priced between $200,000 and $600,000 saw a 5.8% year in year increase in April, with the sector representing 63% of total Miami single family home sales. Existing condos priced between $150,000 and $300,000 saw a 2.7% rise in sales in April, representing 39.2% of total existing Miami condo home sales in April 2016. The audience also heard that Miami offers bargain prices compared to other world class cities and the lack of available land are also key factors in today’s market. For example, a 120 square meter condo in Miami-Fort Lauderdale-Miami Beach cost $149,900 on average, according to the National Association of Realtors NAR. Prices for the same condo in London would be $960,840, in Hong Kong $776,280 and in New York $1.6 million. It was also pointed out that the lack of Miami-Dade County available land means the value of local single family homes will rise and more residents will purchase multifamily units. Most Miami preconstruction condo developers require a 50% cash deposit on new units, one of the highest in the United States and significantly higher than the 20% required during the last real estate cycle. However, the experts said that the large all-cash deposits are a strong sign home buyers are committed and invested in the Miami market. The majority of new construction is happening in Downtown Miami, and developers are being cautious not to overbuild. About 85% of condos under construction in Downtown Miami are sold, according to Integra Realty Resources and the Miami Downtown Development Authority. Downtown Miami has about 7,200 units under construction, a 61.2% smaller inventory than the 18,500 units under construction in 2006. ‘The reason downtown Miami is important is because it is what is leading Miami in the marketplace. It’s our urban core. Downtown is the poster child of what is happening in the market,’ said Graziano. While noting preconstruction sales have normalised compared to the previous record activity, Graziano believes developers are taking a break and doing site plans before announcing future… Continue reading
Survey reveals lack of knowledge in UK about home insurance
Some 1.6 million UK home owners have bought home insurance from their lender and many mistakenly believe they cannot switch for a better deal, according to a new survey. Some 30% or 466,200 households believe their home has to be insured with their mortgage lender as a condition of the loan and 6% were told by their lender that it was a mandatory purchase. On top of this 24% think switching away from their lender’s insurance will invalidate their mortgage, according to the survey from Gocompare Home Insurance. Overall it found that 14% of home owners arranged their home insurance through their mortgage lender and 30%, almost half a million home owners, believed that they had to arrange their home insurance through their mortgage lender as a condition of their mortgage deal. And 24% of borrowers who arranged their insurance with their lender think that switching their insurance to another provider will invalidate their mortgage while 12% say they felt under pressure to buy their lender’s home insurance and 6% said they were told by their mortgage provider that they had to. Protecting a property with adequate buildings insurance, typically against fire, flooding, subsidence and storm damage, is as a requirement made by all mortgage lenders. Buildings insurance provides financial protection for the borrower, and ultimately the lender, from damage to the main structure of the home. While most lenders offer home insurance, borrowers are not obliged to buy it for them. However, the practice of compulsory home insurance tied-in mortgage deals was never formally outlawed despite promises to do so in the late 1990s. When questioned why they had opted to buy their lender’s home insurance, the survey revealed a mixture of misunderstanding, misplaced trust in their mortgage lender and consumer apathy. For example, 14% thought buying their lender’s home insurance might help with their mortgage application, 9% said they didn’t realise they could buy cover elsewhere, 22% said that their lender gave reassurances that the product was good value, 50% think that their mortgage lender provides the best value cover for their home insurance and 49% had opted to do so out of convenience. The survey also found that 72% hadn’t compared products and prices offered by other providers and 34% of home owners who arranged cover through their lender didn’t check cover levels and excesses to make sure they were buying the right policy. According to statistics published earlier this year by the Association of British Insurers, the main reasons for household insurance claims being rejected included the claim value being below the policy excess and the incident not being adequately covered by the policy. ‘We were shocked to find that so many people still think that their mortgage offer is conditional on buying their lender’s home insurance, and that a significant minority are essentially in a mortgage linked insurance trap, believing that switching away from their lender’s insurance will invalidate their mortgage,’ said Ben Wilson from Gocompare Home Insurance. ‘We… Continue reading
