Tag Archives: london
Office market in Saudi Arabia flat as new completions offset higher demand
Annual office take up in key Saudi Arabian cities is continuing to rise but higher demand is offset by new office completions, according to the latest report into the country’s commercial property market. In Riyadh and Jeddah in the 12 months to June 2015 this resulted in vacancy rates remaining broadly stable over the same period and rents were also unchanged in the two cities. The analysis from international real estate firm Knight Frank also shows that in the first half of 2015 Grade A and B office rental values in the capital stood at SAR1,300 and SAR900 per square metre per annum, respectively. Meanwhile, Grade A at SAR1,200 per square metre per annum and Grade B at SAR700 per square metre per annum rents in Jeddah were also flat. In Eastern Province, demand for office space was flat in the 12 months to June 2015 and the report points out that there is little to indicate that demand will rise in the near term, suggesting that the completion of new office projects will exert upward pressure on vacancy rates. However, with landlords in the market largely insensitive to changing supply demand dynamics, it is suggests it is difficult to see rents budging from their current levels of SAR1,050 for Grade A offices and SAR700 for Grade B offices. The report says that the current supply of Grade A and Grade B office stock in Riyadh stands at 3.5 million square meters, the majority of which is concentrated in the central and northern parts of the city. ‘Due to current dynamics we do not expect the market as a whole to see increased vacancy rates or a reduction in achievable rental rates as demand for quality commercial spaces that are well located and benefit from good floor plates will remain strong in the short to medium term,’ it adds. Supply of office space in Jeddah currently stands at 820,000 square meters with over 100,000 square meters of office supply due to be added to the market in the short term. As a result of construction delays, the first half of the year saw few completions which resulted in market wide vacancy rates remaining stable at 10%. Total stock is expected to exceed 1 million square meters in the medium term as new supply comes online and the report says that the second half of the year will see additional supply coming from a number of small to medium sized projects. ‘Due to the historic lack of Grade A stock in the market, we see robust demand for good quality offerings in the short to medium term as tenants look to upgrade to better quality premises and the non-oil economy continues to show healthy growth,’ the report adds. Whilst the Eastern Province does not benefit from a well-defined CBD, supply looks set to grow with a number of projects under construction due to be released to the market between the fourth quarter of… Continue reading
London new housing zone target met ahead of schedule
The Mayor of London Boris Johnson has announced that his key target of 50,000 new homes for Londoners as part of a landmark Housing Zone scheme has been met ahead of schedule. A three further zones already announced will fast track much needed development in the boroughs of Brent, Westminster and Sutton along with continued efforts to free up land for new housing, he added. Other measures include the creation of the London Land Commission to identify all public land in London and strengthen its redevelopment alongside new transport infrastructure, the release of 99% of all land held in the Mayor’s own portfolio, and the establishment of the London Housing Bank to provide finance to accelerate the build-out of large sites. Eighteen out of a promised 20 Housing Zones across London have now been announced, bringing the total number of homes to be built to 50,965 of which nearly one third will be affordable to buy or rent. There will be two further zones confirmed by the late summer. Housing Zones are a collaborative effort between the Greater London Authority, the government and local boroughs to streamline approval processes and speed up development in target areas where it has previously been held back, unlocking valuable brownfield land to meet London’s growing need for housing. The Mayor will invest nearly £44 million in three new Housing Zones in vastly different areas of London which will together provide nearly 6,600 new homes as well as improved transport links, more than 13,000 construction jobs and new retail precincts, transforming these areas into new urban districts for generations of Londoners. ‘We have worked very hard to reach our goal of 50,000 homes, and we’ve done it with two more Housing Zones to go. This scheme has proven extremely popular with boroughs, who have clearly been looking for just that extra bit of assistance in revving up their housebuilding to answer clear demand from Londoners,’ said Johnson. Deputy Mayor for Housing, Richard Blakeway, visited a development at Wembley Park which will deliver 1,200 new homes in the shadow of the famous stadium, situated within the bounds of a second Housing Zone within Brent. In addition, the Edgware Road Housing Zone in the borough of Westminster will provide 1,113 new homes in the heart of London, adjacent to the major commercial centres of the West End and Paddington, of which 537 will be affordable. The borough will regenerate two existing estates with higher density housing, adding to the total number of affordable homes in the area. Once the Crossrail interchange is operational at Paddington Station from 2018, residents will also have access to this new transport link a mere 15 minutes away. ‘This is a great outcome for Westminster and the local community. The Futures Steering Group, comprised of residents and local businesses, has worked closely with the Council to help regenerate and improve this area for the benefit of local residents and businesses,’ said Westminster City Council’s cabinet member… Continue reading
Pending homes sales in US dipped in June, latest NAR data shows
After five consecutive months of increases, pending home sales in the United States slipped in June but remained near May's level, which was the highest in over nine years, the latest data shows. Modest gains in the Northeast and West were offset by larger declines in the Midwest and South, according to the pending home sales index (PHSI) from the National Association of Realtors (NAR). The index, a forward looking indicator based on contract signings, fell 1.8% to 110.3 in June but is still 8.2% above June 2014 when it was 101.9. Despite last month's decline, the index is the third highest reading of 2015 and has now increased year on year for 10 consecutive months. Lawrence Yun, NAR chief economist, said that although pending sales decreased in June, the overall trend in recent months supports a solid pace of home sales this summer. ‘Competition for existing houses on the market remained stiff last month, as low inventories in many markets reduced choices and pushed prices above some buyers' comfort level,’ he explained. ‘The demand is there for more sales, but the determining factor will be whether or not some of these buyers decide to hold off even longer until supply improves and price growth slows,’ he added. According to Yun, existing home sales are up considerably compared to a year ago despite the share of first time buyers only modestly improving and he said the reason is that the boost in sales is mostly coming from pent-up sellers realizing their equity gains from recent years. ‘Strong price appreciation and an improving economy is finally giving some homeowners the incentive and financial capability to sell and trade up or down. Unfortunately, because nearly all of these sellers are likely buying another home, there isn't a net increase in inventory,’ Yun pointed out. ‘A combination of homebuilders ramping up construction and even more home owners listing their properties on the market is needed to tame price growth and give all buyers more options,’ he added. The PHSI in the Northeast increased by 0.4% to 94.3 in June, and is now 12% above a year ago. In the Midwest the index fell by 3% to 108.1 in June, but is still 5% above June 2014. Pending home sales in the South also decreased 3% to an index of 123.5 in June but are still 7.8% above last June. The index in the West increased 0.5% in June to 104.4, and is now 10.4% above a year ago. The national median existing home price for all housing types in 2015 is expected to increase around 6.5% to $221,900, which would match the record high set in 2006. Total existing home sales this year are forecast to increase 6.6% to around 5.27 million, about 25% below the prior peak set in 2005 which was 7.08 million. Continue reading
