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European commercial property investment market seen as attractive
The European commercial property investment market enjoyed a strong end to 2014, according to the latest quarterly report from Knight Frank. It says that the outlook for 2015 has been boosted by the European Central Bank’s (ECB) announcement in January of a programme of quantitative easing which will help to maintain the attractive yield premiums offered by property over government bonds. Overall a total of €57.9 billion was invested in European commercial property in the fourth quarter of 2014, making this the strongest quarter since the second quarter of 2007 and investment volumes for the whole of 2014 came to €177.6 billion, 21% up on 2013. The firm says that investors have continued to show an increased appetite for risk, targeting a wide variety of non-core locations and sectors. Investment volumes increased strongly in Spain, Ireland, the Netherlands and the UK regions throughout 2014, while the Portuguese investment market finally revived in the final quarter of the year, having been one of the last of the peripheral markets to show signs of recovery. The report explains that the current strength of the investment market comes in spite of more modest and varied trends in European occupier markets. In 2014, office take up increased in markets such as London, Paris and Berlin, but fell in Frankfurt, Vienna and Moscow. However, the Knight Frank European Prime Office Rental Index rose by a modest 0.8% in the fourth quarter with London, Dublin and Lisbon being the only major markets to record increases in prime office rents. ‘The European investment market has continued to gain remarkable momentum. We expect 2015 to be another strong year, bolstered by the ECB’s QE programme,’ said Matthew Colbourne, international research associate at Knight Frank. ‘By leading to falls in European government bond yields, the QE announcement has further widened the spreads between property and bond yields. It will help to preserve the attractiveness of property as an asset class in 2015 and beyond,’ he added. Continue reading
RICS continues its expansion into African property sectors
The Royal Institution of Chartered Surveyors is continuing with its expansion in Africa which will result in more property sectors attaining international standards. In November 2013 RICS committed to expanding in three key countries in Sub-Saharan Africa: Ghana, Kenya and South Africa. It is also creating regional RICS hubs in east, west and South Africa. On top of this the global real estate organisation commissioned research into property markets in Sub-Saharan Africa, concentrating on the major driver states of South Africa, Kenya, Ghana, Nigeria and Tanzania. It examines opportunities and challenges in their real estate markets. It found that Ghana is experiencing rapid urbanisation and a growing middle class, expected to reach 1.6 million people by 2030 according to projections by Standard Bank. ‘This presents obvious opportunities in real estate as the need for housing, retail and commercial space increases,’ the report says, adding that the country’s construction sector accounted for 9% of GDP in 2011 and is growing steadily The Ghana Institute of Surveyors (GhIS) is positive about the trajectory the country is taking, but has raised concerns like the need for more skilled professionals in the sector. The GhIS-RICS co-ordinator in Ghana, Rosemargaret Esubonteng, said that the needs of surveyors in Ghana range from access to resources such as relevant literature, modern equipment and software to gaining experience on particular projects. ‘Working together with other professional bodies on the creation and adoption of International Standards, having joint Continuing Professional Development programmes and networking events will enrich the professional experience and outlook of surveyors,’ Esubonteng explained. She also pointed out that the RICS qualification is recognised worldwide, and so enables members to work across markets. In Ghana, it is a passport to international surveying opportunities, subject to meeting the necessary standards of technical expertise and ethical behaviour. The reciprocal agreement allows GhIS members to interact more closely and personally with RICS and benefit from its knowledge base and programmes. Members of both organisations have the opportunity of sharing experiences and gaining deeper global insights, as well as explore prospects of building strong partnerships to bid for international contracts in the region and beyond. The report says that Kenya is fast establishing itself the destination of choice for organisations wanting to set up regional headquarters in East Africa and with huge amount of ongoing construction there is a need for international standards. RICS has had a presence in South Africa for years. The South African real estate market is relatively mature and the institution is working with professional bodies such as the South African Council for the Quantity Surveying Profession and the South Africa Property Owners Association. But the report explains that even as Africa's most mature real estate market, South Africa still faces a shortage of skilled engineers, especially in the public sector. RICS currently runs a Diploma in International Arbitration that provides comprehensive training in this subject and is tailored to the specific needs of the South African market…. Continue reading
UK mortgage lending off to slow start in 2015
Gross mortgage lending in the UK reached £13.4 billion in February, 9% down on both January and on last February, the latest figures from the Council of Mortgage Lenders show. This is the lowest monthly estimate for gross mortgage lending since April 2013 when lending totalled £12.4 billion. The weaker lending figures have not come as a surprise to the industry. ‘Seasonal factors tend to weigh on activity at the start of the year, but looking through these, the underlying picture appears to be stabilising,’ said CML chief economist Bob Pannell. ‘We expect lending to improve in the coming months, as employment and earnings continue to pick up and the impact of recent stamp duty reforms start to feed through,’ he added. Peter Rollings, chief executive officer of Marsh & Parsons, believes that too much should not be read into the data as 2014 was an exceptional year and a formative one with major changes to the borrowing process. He said that 2015 marks a return to more normal patterns of behaviour as the new affordability measures introduced last year become part of the normal market. ‘Lending is only just getting into its stride at the beginning of the year, and it’s also a much longer process from start to finish now, so we’ll see more approvals race through as the market heats up later in the spring,’ he pointed out. ‘Buyer finances emerge much healthier for going through a more rigorous obstacle course. First time buyers have great cause for celebration with the new Help to Buy ISAs, whittled down stamp duty, generous mortgage rates, and plenty of supply on the market. All the elements are at work to up the ante in the housing market in the coming months,’ he added. Continue reading
