Tag Archives: european
French commercial real estate investment up 10% in third quarter
Investment volumes in the French commercial real estate market are set to exceed €15 billion, a 10% increase compared to the same period in 2013, according to the latest industry report. The latest research report from covering the third quarter of 2014 estimates that the year-end total investment volume for the French market will reach €21 billion, which is a 19% rise on the figure recorded at the end of 2013. Savills notes that these increased transaction volumes have been driven by larger transactions over €500 million with 2014 already seeing five deals in this bracket take place with none recorded above this figure in 2013. The volume of portfolio deals in France has also risen by 58% against the first three quarters of 2013. While other European cities, such as the UK, have seen investor demand move out to more regional cities, Savills research shows that investors in France continue to concentrate on Paris IDF, which has so far this year seen 67% of the national investment volume. When analysing specific market sectors, Savills found that offices continued to dominate accounting for 56% of the total investment volume in France so far this year. However, the firm highlights that the share of retail assets is growing and now accounts for 26% of the investment volume compared to 18% previously. The share of retail portfolio sales has also been boosted this year by the Carrefour acquisition of 57 shopping centres for €1.98 billion which is the biggest deal recorded this year. In terms of demand, Savills confirms that overseas investors have increased their appetite for commercial real estate in France accounting for 43% since the beginning of the year, which is an 8% increase on the same period in 2013. US equity funds have been particularly active with Lone Star acquiring Coeur Defense for €1.3 billion in what was the second largest transaction recorded this year. Savills notes that Middle Eastern investors were also prominent representing 9% of total investment transactions in France compared with 7% in 2013. ‘While we have seen an increase in appetite from overseas investors in France, it is important to note that this is mainly for big ticket and landmark buildings with domestic investors remaining far more active in terms of the number of overall deals done,’ said Boris Cappelle, director of investment at Savills France. Lydia Brissy, director of Savills European Research, expects international investors to continue to expand their activities in France, particularly Asian funds from China. ‘As a result of this more competitive market for prime assets, we predict that the prime office yields could harden by 20bps taking them to 3.6% by the end of the year,’ she explained. Continue reading
Value of British property owned by landlords set to break £1 trillion mark in 2015
The value of property owned by landlords in Great Britain is set to break the £1 trillion pound barrier next year, according to new research. The inaugural Buy to let Britain report from Kent Reliance shows that the total value of property in the private rented sector has now reached £930.7 billion, climbing by £109.5 billion in the last year alone, a rise of 13.3%. From its recent trough in 2009, the sector has gained £302.5 billion and the financial crisis had little impact on the sector. Even since the 2007 peak of the property boom, it has risen by more than quarter of a trillion pounds. The longer term growth is even more impressive, with the value of landlords’ assets now more three and a half times its level at the start of 2001 when it was £262.1 billion. The report suggests that resurgent property prices have been a key driver in the increasing value of the private rented sector but long term growth has been underpinned by very strong demand from tenants wanting rented homes. Since 2001, the PRS has expanded by nearly two million households, increasing by 71.4% since the start of 2001. There are now more than 4.6 million households in the British private rented sector due to a combination of individuals and families choosing to be flexible, ongoing net immigration, falling real wages, greater indebtedness among younger households, rising property prices and difficulty in securing mortgage finance. The report also suggests that a serious shortfall in house building and regulations requiring developers to build social housing are both pushing up the price of would be starter homes too. While there are signs that the rapid house price growth may be slowing, Kent Reliance’s analysis of current market trends suggests the PRS will break through the £1 trillion barrier in the second quarter of 2015. London currently accounts for 41% of the sector’s value at £377.3 billion while the South East is the next biggest component with its value of £137 billion or 15%. The South East alone has a greater value than that of the four smallest in monetary terms in the North East, Wales, Yorkshire and the Humber and the West Midlands. The disproportionate size of the PRS by tenure inside London’s population, where over a quarter live in privately rented homes, compared to 18% in Great Britain overall, is a major factor in the pace of growth in the overall sector's value, the report says. Rapid London house price growth has much a bigger effect on the private rented sector than it does in the wider housing market. The amount of rent tenants are paying each month across the UK has increased with the PRS. Landlords earned £44.8 billion in the 12 months to June, equivalent to nearly half the UK’s total annual household expenditure on food, and up by £2.3 billion or 5.5% compared to a year ago. However, the increase in rents themselves… Continue reading
Sales up over 50% year on year in prime Alpine resorts
The prime ski property market in the Alps is continuing on its upward path with sales volumes up 52% year on year, according to the latest index from Savills. More alpine sales are taking place at lower price points as the resilience of the ultra-prime markets starts to ripple down the market ladder, according to the report. ‘A year ago we predicted prolonged periods of sunshine and blue skies for the Alpine property market. This may have been a somewhat easy prediction, given a recovering world economy, increased confidence and job security and in the case of UK buyers, a steady strengthening of sterling,’ said Jeremy Rollason, managing director, Alpine Homes. ‘The Alpine property market however continues its upwards trajectory in terms of increasing sales volumes, up 52% year on year, although this does not necessarily mean rising prices,’ he explained. ‘While buyers are more prolific for the above reasons, prices in the Alps have not generally kept pace with house price increases back in the UK, particularly in London,’ he added. The index report points out that Switzerland’s position outside the European Union cements is appeal as a safe haven for wealth and as such resorts carry a price premium. In the case of Verbier, values can reach €22,400 per square meter or 80% more than the average. It’s therefore no surprise that five Swiss resorts, Gstaad, St Moritz, Zermatt, Verbier and Crans Montana, appear in the Savills Top 10 Ultra-Prime Resorts Index. The family friendly resort of Saas Fee stands out as offering a long season with good quality snow but with comparatively lower priced property at averages of between €4,000 and €8,000 per square meter. ‘Verbier and The Four Valleys remains ever popular and is the destination of choice for many international buyers. Supply restrictions with the new Lex Weber law limiting the number of second homes to no more than 20% of the total will begin to bite in the next one to two years, once existing supply is absorbed. Upwards price pressure in the leading Swiss resorts is inevitable, although there are still deals in the resale market for those that shop around,’ he added. Austria’s comparative affordability, dual seasonality, diverse culture and attractive rental returns make it the country of choice for those chasing bang for their buck. Indeed, rental returns of ski property in Austria are roughly double those of either France or Switzerland, at circa 5% to 7% gross. Kitzbuhel is the only Austrian resort included in the Savills Top 10 Ultra Prime Resorts Index where prices range from €8,000 per square meter to €15,000 per square meter. For buyers seeking value, Bad Gastein and Zell am See offer lower priced property and average ski conditions, although the latter boasts a particularly strong summer season. The resort of Ischgl, the Ibiza of the Alps, is highlighted as one to watch. Prices here are under €4,000 per square meter. Stability is… Continue reading
