Investment
Bucharest real estate markets have seen strong sales in 2015
A stable economic environment and growth potential has resulted in the commercial real estate market in Bucharest, Romani, gaining momentum with sales expected to be close to €800 million by the end of 2015. This year has continued the growth trend begun in 2014 and saw a real estate market dominated by more courageous players, according to the latest analysis report from real estate firm Colliers International. It forecast at the beginning of the year that the Romanian investment market would see sizable transactions value exceeding the €100 million threshold, and international investors either entering or consolidating their positions on the local market. The report says that outsourcing businesses are still the prominent pillars of the office sector, as Romania becomes more visible for reputable BPOs, SSCs and IT companies, with focus on Bucharest, but also secondary cities. More than 60,000 people are currently employed in outsourcing activities and forecasts provision up to 150,000 in the next five years. Characterized by vibrant activity, office sector in Bucharest is on the verge of a new era of premium quality deliveries in what is to become a half million square meter office hub by 2020 in the Floreasca Barbu Vacarescu area. ‘Aligned with our expectations from the beginning of the year, real estate market has been characterized by general positive evolution for transactional activity for all sectors. Relying on good macroeconomics indicators, the year brought more intense consumption and higher interest in investment,’ said Ilinca Paun, managing director of Colliers International. ‘With take-up picking up and vacancy rates reporting low record levels, developers felt confident enough to start projects across the entire market. Industrial sector will add new stock to the static inventory registered in the past years, while investment market continues to post remarkable results this year also, with total volume expected to reach Euro 800 million by the end of the year,’ added Paun. The report says that the Floreasca Barbu Vacarescu sub-market stands out as the new CBD area in Bucharest. The modern stock of buildings in the area was subject to the biggest part of the demand, with 215,000 square meters leased in the past five years. The area will continue to be in the spotlight in the years to come with 155,000 square meters of GLA of office space being planned for development. Nevertheless, the competition in the sub-market becomes fiercer with each new announced development, the report says. According to Andreea Paun, associate director of office agency at Colliers International, Romania not only has become an attractive destination for the outsourcing industry, but has also changed the way it’s being perceived by large companies. ‘Romania is no longer seen solely as a cost effective destination, but rather a value added generator and valuable talent pool. Similar to previous years, the business services industry has driven most of the office demand. We foresee this trend will grow stronger in the future as renowned outsourcing companies are… Continue reading
UK govt announces review to cut red tape for home builders
House builders in the UK are to have their say on red tape in the industry and how ineffective rules are hampering them from building more homes. The government has announced a Cutting Red Tape review which aims to uncover the issues that have the biggest effect on house builders and also wants to gather the views of smaller firms to understand the unique pressures they face. Ministers said that the wide ranging review will capture the experiences of all those involved in building homes, including developers, planners and trade associations. ‘This review will give house builders and smaller construction businesses a powerful voice as part of our £10 billion deregulation drive. Where rules are too complicated, ineffective or poorly enforced, I want to hear about it and the government will take action. Together we can cut red tape and get Britain building,’ said Business Secretary Sajid Javid. He pointed out that previously the Housing and Construction Red Tape Challenge delivered significant reforms and led to a review of local housing standards by the Department for Communities and Local Government. Housing Minister Brandon Lewis said he is determined to remove barriers faced by house builders to ensure more homes can be built to help reach the recently announced new targets for home building. ‘We want to hear the views of firms big and small so we can remove unnecessary red tape and help house builders do what they do best, building the homes we need,’ he added. He explained that the key starting points for the review are based on the priorities raised by the Task Force which include roads and infrastructure rules for new housing developments and environmental requirements, particularly European Union rules such as the Habitats Directive and wider EU environmental permit requirements. It will also look at rules that affect utilities such as electricity, gas and water as well as broadband infrastructure, and the government is also keen to look at the changes made to the Construction, Design and Management Regulations, as well as any examples of EU rules that are being implemented too strictly. John Allan, national chairman of the Federation of Small Businesses, said that the government is right to listen to the needs of smaller businesses. ‘In the 1980s, smaller house builders delivered around two thirds of our new homes. Today, it is less than a third. If the government can encourage small firms back into house building, that would be a major step towards meeting this country’s housing needs,’ he explained. ‘The new Cutting Red Tape review will look at the way the law is enforced, as well as whether the rules themselves are proportionate and fit for purpose. The responses from house builders will lead to government taking concrete steps to remove burdens on business,’ he added. The announcement was also welcomed by Stewart Baseley, executive chairman of the Home Builders Federation. ‘As the industry looks to drive further increases in housing supply we welcome moves to reduce… Continue reading
Uncertainty in financial services sector affecting prime London rental values
Rental values in prime central London declined for the second month in a row in November against the background of continued uncertainty in the financial services sector and a seasonal end of year decline in demand. Values fell 0.3%, which meant annual rental value growth dipped to 1.2%, which is the lowest level since August 2014, while rental yields were flat at 2.95%, according to the latest report from real estate firm Knight Frank. It follows a peak of 4.2% in May this year as a degree of demand moved across from the sales market due to uncertainty over taxation and the general election. ‘Since then, nervousness surrounding global economic events including the slowdown in China means that many companies have reigned in relocation budgets and many banks continue to cut headcount as part of restructuring plans,’ said Tom Bill, head of London residential research at Knight Frank. ‘Furthermore, stock levels have risen as more owners adopt a wait and see approach to pricing trends in the sales market, which has tipped the balance in the favour of tenants and put downwards pressure on rents,’ he pointed out. ‘The result is that the number of tenancies started has dropped since 2014, though remains above the level two years ago. Demand, in the shape of new prospective tenants and viewings, is also down compared to what was a relatively strong 2014, though both remain above 2013 levels,’ he added. He also pointed out that demand remains strong in lower price brackets and at the super prime level of above £5,000 per week amid uncertainty around taxation including recent changes for buy to let investors and second home purchases. ‘The result is a three speed market where demand is stronger in higher and lower price brackets than it is in the middle,’ Bill explained. ‘The changes announced by Chancellor George Osborne mean that buy to let investors and those purchasing second homes will be subject to an extra 3% on the rate of stamp duty from April 2016, which could lead to fewer rental properties, which would put upwards pressure on rental values,’ he added. Continue reading
