Gold to hit $2,000 in 2014?

Central-bank buying set to push gold to 13th consecutive annual rise

Spot gold has made a rather unspectacular start to 2013. The precious metal has retreated 4.7% since the start of the year to $1,580 per ounce, as improved market sentiment has driven capital flows into riskier assets and away from safe havens.

Despite the price fall, Bank of America expects bubbly central-bank activity to push gold higher again -- the bank expects the metal to surpass $1,750 per ounce as the year progresses, before finally pushing through $2,000 to fresh new peaks in 2014.

Gold set to ignite in summer heatwave

Bank of America has, in recent days, cut its gold-price forecasts for the next two years. The bank now expects the yellow metal to average $1,680 per ounce and $1,838 per ounce this year and next, down from the previous projections of $1,805 and $2,038.

Although the bank has become more cautious with its estimates, it believes that gold remains on an uptrend that should persist until 2014. The institution predicts gold to average $1,650 and $1,600 per ounce in quarters one and two before marching steadily higher from the middle of this year.

The yellow metal is expected to average $1,700 in quarter three and $1,750 in quarter four, before marching to $1,850 and $1,900 in the first and second quarters of 2014.

Central-bank buying forecast to rise

Bank of America expects central banks across the globe -- especially in developing markets -- to engage in more proactive exchange-rate management as the year progresses in response to aggressive Japanese tactics to devalue the Yen.

As global growth and inflation pick up, increased US dollar purchases from central banks will be needed to counter the appreciation of non-Yen exchange rates, Bank of America argues. This should in turn drive up inflation, particularly in emerging regions, boosting gold interest as initial dollar purchases are eventually recycled into metal holdings.

Central banks have remained steady purchasers of gold in recent years amid fears over macro-economic fragility and rising inflation. South Korea has bought an additional 20 tonnes of metal in recent days, taking its total holding to 104.4 tonnes. Russia and Kazakhstan bought more last month.

Official sector purchases across the globe hit 534.6 tonnes last year, according to the World Gold Council, the highest level since 1964 and up 17% from 2011.

Other factors could also drive the precious-metal price higher in the medium term, Bank of America says. It expects real rates to head lower again moving into 2014, prompting fresh gold interest. The institution anticipates rising affluence levels in emerging markets to drive gold jewellery purchases higher, too.

Mine gold stocks for gains

Investors can also gain exposure to a rising gold price through shrewd stock picks in the mining sector. Galloping demand for natural resources should continue to drive broader commodity stocks higher over the long-term.

Kuwaiti property company St Martins is making a play to buy 70 Gracechurch Street in the City of London for £210m.

 

St Martins is in talks to buy the off-market EC3 City trophy following a spate of recent interest in the property.
The negotiations are said to be in a state of flux given 70 Gracechurch Street is not formally on the market and talks with various parties remain ongoing.

St Martins has been actively seeking investment opportunities in London in recent weeks. In January it completed its purchase of 5 Canada Square in Canary Wharf, E14, from Evans Randall for £385m, reflecting a yield of 5%.

Last year it made an off-market approach to buy Ropemaker Place for around £500m, and also bid in November to buy 5 Aldermanbury Square for £225m, reflecting an initial yield of 5.33%.

DTZ was instructed to sell 70 Gracechurch Street in April 2011 for around £200m, reflecting a 5.3% yield, in what was one of the largest off-market assets to become available in London that year. However the building was later withdrawn owing to a significant movement in swap rates.

Any buyer for the asset would purchase the special purpose vehicle in which the 180,000 sq ft block is held.

The development has been an attractive prospect for some investors because of the fixed annual rental uplift agreements in place with current tenants. The building is let on long term leases to insurer XL Group and Marks & Spencer, which occupies a 90,000 sq ft store at ground level.

All parties declined to comment.

Intu shopping refinances debt

Intu Properties, the re-branded Capital Shopping Centres Group, is refinancing four UK shopping centres with £1.15bn of debt comprised of a sterling bond issue, fresh bilateral bank debt and a bridge facility. 

The four wholly-owned shopping centres are intu Lakeside, intu Braehead, intu Watford and intu Victoria Centre, and together are valued at a combined £2.3bn.

This takes the refinancing to 50% LTV, which is slightly reduced leverage from the existing 56.6% LTV, based on the existing seperate debt facilities for each of the four shopping centres, which amounts to £1.3bn.

Intu is arranging the refinancing through a new debt funding platform, the secured group structure (SGS), a special purpose vehicle for issuing investment grade secured debt which will become a central source of financing for Intu. All debt within the SGS will be ranked pari passu.

Intu will contribute around £200m, from existing cash and facilities, to fund the balance of the refinancing on the existing debt secured on the assets as well as to fund the estimated £60m to £70m swap break costs and transaction costs.
The bridge facility is anticipated to be refinanced through further capital markets issues as market conditions allow, while the bond roadshow will commence on Monday 4 March and the bank debt, which has already been signed, will come into effect when the bonds are issued.

The establishment of the SGS therefore will achieve a refinancing and maturity extension on about one third of the group’s debt and over 55% of Intu’s debt that is falling due within the next three-to-five years.
Intu said it anticipates the new debt issued through SCS will lower the ompany’s medium-term average cost of funding, albeit after an initial marginal increase due to cystalising swap breakage costs which will reduce adjusted, diluted NAV by circa 7p.

SCS is structured to issue debt capable of being assigned an ‘A’ category rating, ensuring ready access to medium and long-dated bond and private placement markets on an ongoing basis alongside bank debt, diversifying sources of debt and lengthening loan maturities.

Intu said the blended £1.15bn refinancing “balances flexibility with lender andbondholder credit protections”. For Intu, there is operational flexibility to contributute additional or substitute assets as well as issue further debt and fund development capex, while for creditors there is now a range of debt products to chose to invest in as well as a tiered covenant regime.

Matthew Roberts, finance director of Intu Properties, said: “We are pleased to announce the establishment of a vehicle for issuing investment grade debt which will become a central financing platform for the group.

“This robust and flexible platform diversifies the group’s sources beyond the banking markets and brings the considerable benefits of ready access to debt markets through an investment grade rating, access to longer maturities and ability to issue a range of instruments at competitive margins.”

The four Intu shopping centres have a combined retail space of 4.3m sq ft and an annual footfall of around 80m people.
The announcement was one of a flurry of major announcements from Intu Properties this morning as it unveiled its full year results, chief among them an equity raising to fund a large shopping centre acquisition. 

Switzerland tightens capital requirements on home loans

Switzerland has introduced a 1% equity ‘anti-cyclical capital buffer’ for banks offering home loans to prevent negative effects on the economy from a current imbalance caused by significant credit and house price growth over the past years.

The measure, which will take effect in September, was proposed by the Swiss National Bank and ratified by the government last week. “The imbalance intensified over the second half of 2012 and has now reached a magnitude that constitutes a risk for the stability of the banking system and thus for the Swiss economy,” said SNB in a statement. The buffer should make banks’ property loan provision relatively less attractive compared to other loans.

Swiss house prices rose by around 30% over the past 10 years, with higher growth figures in the larger cities, led by Geneva at 136%, according to Swiss property service company Wüest & Partner. The scope for an interest rate increase, which would also dampen the property loan and investment markets, is very limited, said SNB. Many analysts, including the major banks, have warned that Swiss housing is now in a bubble, the collapse of which could have gravely negative consequences for the entire economy. pie

Business investors still keen on UK commercial property market despite eurozone woes

Confidence in the commercial real estate sector in the UK has fallen back as a result of the weaker economic backdrop and ongoing euro zone crisis, according to a new survey.

Despite this fall in confidence, all groups remain committed to investing in the sector and are keen to source opportunities that can add long term value and this might be symptomatic of a perception that the market is near the bottom, the latest Commercial Property Confidence Monitor produced by Lloyds Bank Wholesale Banking and Markets and in association with the Investment Property Forum.

Major businesses and London based medium to large businesses have the greatest appetite for new investment in the sector over the coming three to six months. Major businesses have become more positive, in line with August 2011 expectations, with 70% of respondents aiming to increase commitment and 10% looking to divest.

It also shows that London based medium to large businesses are looking to take advantage of attractive valuations with 4% expecting to invest and just 4% planning to divest.

‘Businesses within the commercial real estate space will be deploying their capital selectively as they manage their portfolios during a period of very little growth within the economy. Despite the pessimism there is a clear appetite for investment into the sector driven by major businesses and London based companies,’ said Lynda Shillaw, Lloyds Bank Wholesale Banking and Markets’ managing director of corporate real estate.

‘This appetite is most likely fuelled by investors’ views of long term growth when buying at today’s prices. In particular we’ve seen larger property companies divesting of assets over the past couple of years and reinvesting into both development schemes and assets with enhancement opportunities, ensuring a healthy pipeline and driving returns. We expect this to continue over the coming quarters,’ she explained.

According to the survey’s composite index, which averages the net balance scores on prospects for the sector in the next three to six months, optimism fell back for all groups with the exception of small businesses where it is unchanged. This broad decline of the index reflects a general softening of all the underlying components with the exception of anticipated portfolio returns where expectations of performance pick up a little for small and medium to large businesses.

Despite the downbeat outlook, small, medium to large and major businesses expect to see a net increase in the performance of their portfolios over the coming three to six months. Small businesses are notably more positive this survey with 25% of respondents anticipating an improvement compared to 8% in May of this year.

Medium to large businesses based in London show the sharpest increase with 46% expecting an improvement, up from 31% in the previous survey, giving their highest net balance since November 2011.

Major businesses and fund managers paint a less positive picture, with the number of fund managers expecting a deterioration outnumbering those who expect an improvement. Major businesses remain more positive than negative, although this group has seen a fall in confidence since the May 2012 survey.

In contrast to the broad expectation that portfolio returns will grow over the next three to six months, most groups mainly expect values to remain static or deteriorate during the next quarter. Some 64% of fund managers are expecting deteriorating values and 30% of major businesses do so, the largest downward shifts compared to the previous survey.

Some 64% of small businesses and 63% of medium to large businesses believe that values will stay at current levels despite expecting an improvement in their portfolio performance. This could suggest a proactive approach, with businesses working within the confines of a difficult market to identify steps to reduce costs or increase rental yields to combat falling values.

‘The confidence trends for portfolio performance suggest that investors are expecting any pick up in returns to be driven by factors other than increasing capital values. This means that effective asset management and enhancement will be the critical drivers of portfolio performance in the short to medium term. With property companies and funds still looking to invest they’ll be looking for those opportunities where value can be added to their portfolio,’ said Shillaw.

Following last quarter’s generally negative shift in expectation regarding the outlook for the UK wide property market, sentiment towards UK activity is set to weaken further for most groups. The majority of respondents have lower expectations of decline in activity in their own business sectors than at a UK market level.

London based medium to large businesses show the most significant difference with 29% expecting a pick up in their own sector compared to 8% for the wider UK property market. By contrast, medium to large businesses in the regions are slightly more positive about the possibility of pick up in the UK market at 17% at 13%.

Looking at sentiment for the UK wide property market on its own, fund managers, who are traditionally thought to lead sentiment by a quarter, are the only group to show an improvement since the previous survey, although they still sit firmly in negative territory. Some 10% of those questioned expect to see a pick up in activity compared to 4% previously. The number expecting a slowdown has also reduced slightly since May, from 50% to 44%.

Economic uncertainty and lack of demand are thought to be the main drivers of negativity, although there are some signs that these factors are leading to a reallocation of investor attention towards non-prime properties.

‘We retain a cautious outlook for the wider UK property market. Despite the fall back in confidence in London-based businesses it still remains a hot spot but overseas money is out pricing the traditional UK investor. With a shortage of appropriate stock on the market we’re seeing more companies look outside of London and the South East to acquire assets where the value add opportunities enable them to be enhanced to prime standards. In spite of the intensification of the euro area debt crisis, the exodus predicted from the region has not materialised as expected, and some respondents see opportunity and are looking to increase, albeit modestly, their exposure,’ added Shillaw.

Medium to large principals, medium to large businesses outside of London and fund managers are anticipating an increase over the next six months. Fund managers see the biggest opportunity for growth and expect to increase their holdings by 0.52%. The proportion of fund managers investing in the euro zone is also set to increase from 50% to 54%.

For the fourth consecutive quarter since its introduction to the survey, residential letting has been identified by most groups as the property sector that is expected to perform the best over the coming three to six months. Fund managers are backing offices whilst major businesses believe that house building will offer the best returns. When questioned about which sector respondents will focus on in the next three to six months, house building comes to the fore for small businesses and major businesses. Fund managers will focus on offices whilst medium to large businesses intend to focus on the residential letting market.

Asian sovereigns drive surge in European capital inflows

Net investment into European commercial real estate rose 36% in 2012, with London still the world’s most active centre and stoking hopes of recovery in some distressed property markets, including Ireland and Spain, says realtor Jones Lang LaSalle. The surge was driven by an 80% rise in inflows from Asia, mainly from large sovereign wealth funds.

Large Asian sovereigns, as well as those from the Middle East - plus cash-rich Canadian pension funds - have become increasingly active in European property, initially focusing on the best assets in London but increasingly looking further afield. Chinese state-backed fund Gingko Tree was the partner for Deutsche Bank’s RREEF on its purchase of a high-quality office block in Manchester, reports say. Asian inflows could rise further in 2013 as Chinese and Taiwanese insurance groups, now able to invest in overseas real estate for the first time, begin to investigate offshore markets, JLL said in its latest global capital markets research report. 

London was the busiest city for property deals, with $31bn of commercial property transactions in 2012, some 20% more than New York, which had a stronger final quarter. However, investors were also attracted to deals in Germany, France and Sweden, as well as distressed property markets, including Ireland and Spain, which saw a rise in deals in the final quarter of the year. That could signpost an increase in activity in 2013 as overseas investors eye higher-risk investments with the potential for higher returns.

Despite the rise in capital inflows into Europe from outside the region, the overall volume of property sales across Europe, Middle East and Africa fell 4% in dollar terms for the year to $159bn, JLL said. Owners seeking a safe haven for capital chose to hold onto assets for longer. JLL earlier predicted that global property deals could rise to $500bn from $443bn last year.

During the final quarter of the year Europe recorded eight cross-border deals larger than $500m. Norway’s government pension fund, the world’s largest sovereign fund with some €466bn, was one of the most active, acquiring the Meadowhall shopping centre in Sheffield and the Uetlihof office development in Swiss capital Zurich, headquarters of Credit Suisse.

GlobeSt.com - BlackRock, Swiss Re Agree on $7.5B Fund Deal - Daily News Article

GlobeSt.com - BlackRock, Swiss Re Agree on $7.5B Fund Deal - Daily News Article

XYNO PROPERTIES

Press Release

16 May 2012

Xyno Properties announced today an investment into the Corporate Headquarter Building of the BMW Group in Switzerland. The building is Located within the BMW Corporate Campus in Dielsdorf, Canton of Zurich, Switzerland w7ithin a 15 minute drive to both the Zurich International Airport & downtown Zurich and is classified as Class “A” Commercial Office Space. The Property houses the Financial Services Group and senior management of BMW Group Switzerland.  

The physical characteristics of The Property are a total of 6,072 square meters / 65,334 square feet of office space within a 3 story building, constructed of contemporary design with innovative use of stone, steel and glass. The office space is flexible and adaptive to a wide range of alternative uses. The land is comprised of Parcel Number 1822 containing a total of 5,160 square meters / 55,542 square feet / 1.27 acres zoned commercial/industrial. Typically, Swiss commercial properties provide little parking. The BMW Property however, provides 76 parking spaces beneath the building and 20 above ground spaces.

The municipality of Dielsdorf is located in the northwestern sector of the Swiss canton of Zurich and is the capital of the district of Dielsdorf. Dielsdorf is the Swiss corporate headquarters for a number of other large international companies such as Chromos, Fuji Film and Honeywell. Although the municipality is comprised of only 5,506 residents, Dielsdorf provides a workplace for over 2,000 employees. Dielsdorf is well connected to the extensive Swiss public transportation system by rail and is accessible to four major bus lines. The major highway going north out of Zurich (Route 17) passes through Dielsdorf. Freeway access to Autobahn N1, the main

Swiss artery is 5 miles south, and access to Autobahn N51 is 4 miles northeast. Zurich is 13 miles south and the Zurich International Airport (Kloten) is 11 miles to the east.

The company believes that the investment will create value in it's portfolio and will enhance the current income and growth potential.

Interested parties can contact Xyno Properties at: Onyx Worldwide AG onyxagnewsletter@onyx.co.im

More information about Xyno Properties at: http://xyno-properties.com

Real estate opportunities in Africa

02 May 2012

Africa’s collective GDP in 2020 is expected to reach $2.6 trillion, with $1.4 trillion in consumer spending and 128 million African households that have discretionary income. Africa’s collective GDP in 2020 is expected to reach $2.6 trillion, $1.4 trillion consumer spending with 128 million African households with discretionary income. This is according to a report entitled: Lions on the Move – The progress and potential of African economies by McKinsey Global Institute. This is according to a report entitled: Lions on the Move – The progress and potential of African economies by McKinsey Global Institute. The report reveals that Africa’s future growth will be supported by external trends such as the global race for commodities, Africa’s increased access to international capital and its ability to forge new types of economic partnerships with foreign investors. Furthermore, the long-term growth of Africa’s economy will be lifted by internal social and demographic trends, particularly Africa’s growing labour force and the related rise of the middle class consumers. McKinsey notes that for companies, the report analysis suggests that four groups of industries together will be worth $2.6 trillion in annual revenue by 2020. These are consumer-facing industries (such as retail, telecommunications and banking), infrastructure related industries, agriculture and resources. Meanwhile, the Annual Broll Property Report notes that Sub-Saharan Africa continues to experience an increase in demand for real estate solutions in a very complex structure of emerging markets. Construction in these locations is booming and some South African retailers and property developers who have been eyeing these growth trends have made an early entry into these real estate markets. In Nigeria, thanks to rapid urbanisation, consumerism and a growing middle-class, demand for retail space has increased during the past 12 months. The backlog of formal upmarket retail developments has brought new proposals and it is estimated that 250 000 square metres of Gross Lettable Area of retail space will come on stream during the next 24 months. There is demand for office space with new developments mostly comprising A Grade offices. South African and international retailers are reportedly continuing to enter the retail market in Ghana with a basic line shop rental for shopping centres commanding rentals priced between US$35 to US$65 per square metre per month. Accra Mall measuring 20 000 square metres in Ghana is the only premier shopping centre in Ghana attracting 7 million shoppers a year. New office developments in Ghana are leaning towards A Grade type prime locations and these are expected to have basic rentals of between US$35 and US$40 per square on completion. In Namibia, the supply of retail space has declined while demand sales have remained stable. Demand for space varies between 150 square metres to 500 square metres and leases escalate at 8 percent annually, according to Broll. At the Gauteng Chapter Breakfast of the South African Council of Shopping Centres on Leasing in Africa, Dave Bennie, Africa Retail Leasing and Consulting for Broll said it is much easier to do business in Africa where you do not need a visa and there is ease of travelling to that particular country. Namibia and Zambia were cited as relatively easy to operate in while Mauritius was said to be overtraded. Construction in Sub-Saharan Africa is booming and some South African retailers and property developers who have been eyeing these growth trends have made an early entry into these real estate markets. Bennie points out that Nairobi in Kenya has good infrastructure, lots of new modern residential apartments and the area is poised for growth. He says retailers wanting to trade outside of South Africa need to assess the market and partner with locals as well if they are to succeed. On Nigeria, he says Lagos is a tough place to do business in as property and land generally cost more than they would in New York City in the US. As a result, he explains that property rentals are high and landlords require rentals to be paid for a year in advance. This expensive location will become a mega-city in Africa, he says. While signing deals is important, Bennie urges South African businesses wanting to trade outside borders to ensure that they check their health, things such as getting a Yellow Fever Vaccine are very important. “More importantly, doing business in Africa should be seen as an adventure, one needs a strong heart and will and lots of patience,” says Bennie. South African retailer Woolworths aims to open 16 stores in African countries this year taking the total number of stores to 60 in the current financial year. The new stores will be larger than current ones and the retailer expects to be trading in 104 stores on the African continent (outside South Africa) by June 2014. Woolworths is currently trading in 12 countries. Click here to read more about the Woolworths expansion into other African countries and here about real estate investments in Africa. Glenn Gilzean, Woolworths Group director for retail operations, says Woolworths have the advantage of having traded on the continent for many years and is well placed to expand its footprint. “We are very mindful of the competition for limited retail space and the need to deliver a compelling shopping experience to different customers in a range of territories.” However, Gilzean says finding the ideal entrepreneurs to “set up shop with” (as they enter into joint ventures with partners in African countries) remains a challenge to doing business in other African countries. Asked what he thought was fuelling retail growth in Africa, he says he believes the Group’s Pan African expansion will deliver a meaningful profit contribution. A number of factors have spurred the interest in African countries including the growth of consumer spending, which now accounts for more than 60 percent of the African GDP and is expected to increase with the growth of the upper and middle income groups. South African retailer Woolworths aims to open 16 stores in African countries this year taking the total number of stores to 60 in the current financial year. “The appetite for formal retail is another factor and we are well resourced to meet the needs of the aspirant African consumer,” says Gilzean. At a GIBS Forum in Illovo, Johannesburg on Taking Advantage of Opportunities in Africa, Jason Krause, managing director of International SOS South Africa says there is no one size fits all approach to minimising risk in African economies. He notes that lack of awareness and preparedness of what happens in other African economic markets remains a risk factor for many businesses wanting to trade outside their own countries. While opportunities are seemingly endless in Africa, the continent is also the most risky location to do business in. These include infectious diseases, opportunistic crimes and other health issues. Krause says malaria is seen as a huge threat followed by road accidents, but notes that the type of industry one is in determines the risks. He says for those wishing to jump on the Africa economic opportunities bandwagon, it is important to increase awareness among shareholders regarding the chosen country to do business in Africa and protecting employees heading these businesses is necessary to taking advantages in Africa. “It’s all about knowing the risk, preparation and managing the risk posed by doing business in that country.” Dave Butler, managing director, Southern and East Africa Control Risks, says Africa has become an investment destination of choice and with its young working population, the continent is poised for further growth. Butler says business opportunities exist in sectors including infrastructure, consumerism and telecommunications, and South Africa and its businesses are well placed to take advantage of these opportunities. He explains that businesses face risks including government change, which signals risks to long-term investors, contract negotiations, red tape and corruption. Silke writes that with 900 million consumers on the continent, the problems and pitfalls in doing business in Africa are quickly being outweighed by the promise of a market clamouring for goods and services. It is, however, important that one does research before investing outside of their known economies. Planning and practise all form part of preparing to enter uncharted territory and taking advantages of economic opportunities in Africa. Butler says if one is thinking of expanding into Africa, they should: 1. Know exactly where they are going – understand the country and its politics. 2. Know your partner, ask questions such as who is behind the company and what companies' or partners’ original source of wealth is. Do a thorough due diligence. 3. Protect your reputation against allegations of corruption and bribery by remaining ethical in all business dealings. Daniel Silke, political analyst and author of the book entitled 'Tracking the Future – Top trends that will shape South Africa and the world', writes that in a world looking for the next investment frontier, the African continent stands out as the next major contributor to global growth. Africa will soon be courted by global corporates from more mature developed markets as the scramble for opportunities in Africa continues. Silke writes that with 900 million consumers on the continent, the problems and pitfalls of doing business in Africa are quickly being outweighed by the promise of a market clamouring for goods and services. He adds that Africa stands on the cusp of a critical opportunity and is well positioned in a world less dominated by the West and more open to input and influence from the developing world. – Denise Mhlang

Midwest, New Orleans Area Counties Top U.S. Population Gains

Scott Kauffman Posted by Scott Kauffman 05/07/12 8:00 AM EST Author Bio | Archives Related Stories: 9 1 1Email0

New-Orleans-Louisiana.jpg (Washington D.C.) -- Of the 10 fastest growing counties in the nation between April 1, 2010, and July 1, 2011, two were in the upper Midwest and two were in Louisiana, according to some recent data from the U.S. Census Bureau. The two Midwestern counties that made the top-ten list were Williams, N.D., which ranked third, and Dallas, Iowa, which was seventh. Meanwhile, the presence of Louisiana counties St. Bernard (No. 2) and Orleans (No. 9) among the 10 fastest-growing counties in America provides evidence that the New Orleans area continues to rebound from the devastating effects of Hurricane Katrina. Another fast-growing county was in the Pacific Northwest: Franklin, Wash., which was fifth. Two county equivalents in Virginia, the independent cities of Manassas Park and Fredericksburg, checked in at fourth and sixth, respectively. Rounding out the top 10 were Charlton, Ga. (first); Hoke, N.C. (eighth) and Williamson, Texas (10th). None of these 10 counties was among the 10 fastest growing from 2000 to 2010. The top 10 numeric gainers were all in the Sun Belt, with four in Texas: Harris, Dallas, Bexar, and Tarrant. Another four were in Southern California: Los Angeles, Riverside, Orange and San Diego. Rounding out the list were Maricopa, Ariz. and Miami-Dade, Fla. Following are some other interesting findings from the recent Census Bureau look at county growth: Among the 50 fastest-growing counties from 2010 to 2011, 38 were in the South, with the remaining 12 split equally between the Midwest and West. Texas contained more of these counties than any other state, with 12. Georgia was next, with nine, followed by Virginia (seven), and North Dakota and North Carolina (tied with three apiece). Texas was home to eight of the 25 counties with the highest numerical gains and California was second with six. All but two were in the South or West: Kings, N.Y. (Brooklyn) and Cook, Ill. (Chicago). The three fastest-growing counties from 2000 to 2010 were Kendall, Ill.; Pinal, Ariz.; and Flagler, Fla. Between 2010 and 2011, they ranked 236th, 171st and 207th, respectively. Los Angeles was the most populous county, with 9.9 million residents on July 1, 2011

Swiss real estate will become the new gold

Posted by Izabella Kaminska

Here’s an interesting view on the consequences of the SNB’s move from Societe Generale’s Sebastien Galy. First of all, as others have noted too, Galy believes the decision to defend a 1.20 level floor against the euro is credible this time, since the environment is very different. Not only is there a political will to intervene, measures like CPI — which are dropping — justify an expansion of the monetary base. As Galy notes: The SNB moved to set a floor at 1.20 in the EUR/CHF. Front end vols in EUR/CHF have started to collapse and should continue to do so especially downside vols. In 2006/2007 when EUR/CHF was trading in a range, vols were far lower than now . This intervention move is distinct from 2010 when the SNB was reacting to deleveraging of peripherals and was eventually forced to surrender and suffer from a public backlash. Now, it already has the political support to move ahead as well as a clear economic imperative so that the SNB’s move is credible. The CPI yoy inflation dropped more than expected. This is even as the well publicized price cuts by retailers such as Migros, Coop and Manor are yet to show up in the data. Though there’s another potential side-effect — one that’s likely to make Swiss real estate a major beneficiary, notes Galy: The presumption is that the intervention will be largely unsterilized eading to an expansion of moneys in Switzerland and extremely low mortgages. It also means that real estate in Switzerland is going to be the new gold. There is still an open window before the government starts to close it by regulating the mortgage market, presumably by increasing the risk weight on Swiss mortgage holdings. he extremely well informed article from a Basel newspaper two weeks ago had mentioned that regulation of the mortgage market was being considered by the government in addition to measures to help the Swiss export and tourism industry. Meanwhile, from a bond perspective: The net amount of investment flow into Switzerland is initially unclear as from a fixed income perspective, it is attractive for a Swiss Fixed Income investor to sell the 1M bond at home and invest in German or French Bunds to gain roughly 1%. In the future, every new wave of risk aversion is likely to translate into more negative rates in Switzerland. The issue will then be whether the SNB penalizes Swiss bank s who arbitrage these rates via deposits at the SNB. Presumably, it is in their interest of having negative rates to encourage investments outside of Switzerland. Which means you can expect the Swiss shopping spree to take place both domestically and abroad.

Property prices in Auckland hit new high

Asking prices for Auckland homes hit a new all time high in April as the New Zealand city's real estate market experiences a severe shortage of supply

Data released in the NZ Property Report, a monthly report of housing market activity compiled by Realestate.co.nz, showed that the average asking price for Auckland homes for sale increased 2% from March taking them to an all time high of $568,820, the third high in eight months.

Alistair Helm, chief executive officer of Realestate.co.nz, said that the surge was understandable due to the increased pressure that has been placed on that market by strong sales that have not been matched by numbers of new listings.

‘The number of new listings is virtually identical to April last year, but what is different this year is that demand has remained high, with year on year sales up more than 20%,’ said Helm, adding that the Auckland market is still massively undersupplied resulting in a ‘chronic shortage’.

Prices in Auckland have remained at the top end of the range for the past 12 months, according to Peter Thompson, managing director of Barfoot & Thompson.

‘In April property held on to the solid prices achieved in March, with the average sales price for the month being $568,018, only $3,000 lower than the average price in March. It shows that March’s big jump in prices over those for February was no one off spike,’ he explained.

What did change between April and March was the number of homes sold. Sales numbers fell back to 750. This is consistent with the number of homes sold in April last year, but is 39.8% lower than in March. New listings for the month at 1,266 were also solid, but were down 17.6 % on those for March.

‘At month’s end we had only 4,621 homes on our books throughout Auckland, the lowest number in four months and 17.2% lower than at the same time last year. This underlines the extent to which there is a lack of choice available to potential home buyers,’ added Thompson.

Prices and sales volume tend to ease in autumn but he expects the buoyant market to continue. ‘Given the high level of buyer interest in the market and the low level of choice, prices are likely to hold firm through May. For three of the four months of this year, the average sales price for the month has been higher than the corresponding month last year,’ he said.

However, around the country the dominant trend was an easing of asking prices with 11 of the 19 regions covered by Realestate.co.nz reporting falls, ranging from just 0.2% in Gisborne to a massive 12.8% in Wiararapa. There were five regions where the asking price showed a fall of greater than 5%; Waikato, Nelson, Southland, Marlborough as well as Wairarapa.

In contrast there were some strong growth in asking price with Hawkes Bay and West Coast reporting prices up 14.1% and 5.1% respectively.

Two regions, Auckland and Hawkes Bay reported new record levels of asking prices, in the case of the Hawkes Bay the prior high was last seen way back in 2007 whereas Auckland’s prior high was only two months ago.

Another Blow for Property Lending

Yet another blow for lending for Commercial Property in the UK..

National Australia Bank is to abandon commercial property lending in the UK and cut 1,400 jobs, 

See full article here..

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9.8% total return for Commercial Real Estate in 2011

Commercial Property has delivered a return of 9.8% globally in 2011, Please read article below for the full story...

Global commercial property delivered a 9.8% total return in 2011; Irish returns in Q1 2012 were at 0.6%

Swiss property market maintains its winning streak

Please see the latest news on the Swiss Property market below..

  Swiss property market maintains its winning streak

UK Update

The total value of UK commercial property investment transactions
in Q1 2012 was £7.53 billion, down 27% on the same period for 2011. Central
London office investment broke £4 billion for the quarter – the highest
figure since the financial crisis. Overseas investors spent £3 billion
during the first quarter – representing 42% of all purchases. Retail
investment fell from £3.15 billion in Q1 2011 to £1.42 billion in the latest
quarter

-          Hedge funds are increasingly looking outside the traditional
locations of Mayfair and St James’s for London offices, according to new
research by Jones Lang LaSalle, but the West End still remains their
preferred location. JLL research published this week, called “Hedging the
Risk”, said the location preferences of hedge funds had “expanded”, and that
they would look further afield to north of Oxford Street – pushing prime
rents in the area to record-breaking levels. The report said hedge funds,
which have traditionally been comfortable paying rents of £100/sq ft or more
because of their high margins and low staff numbers, were now also
considering prime buildings in Knightsbridge, as well central London “Trophy
Buildings” such as the Heron Tower and The Shard. Nonetheless, the report
confirmed that the West End was still the number one destination for hedge
funds in Europe, and said rents would increase in the area, primarily due to
the lack of space available. Andrew Barnes, director in Jones Lang LaSalle’s
West End agency team, said: “There has been a definite change in where hedge
fund managers will consider looking, with some now prepared to consider
alternative locations to keep occupational costs in check, particularly if
the building has a high profile. However, for some, Mayfair will always
remain the premier choice despite costs.”

-          Barratt Homes, Taylor Wimpey and the London Development Agency
have been given the green light for the final phase of their 780-apartment
scheme next to London’s Thames Barrier. At a Newham Council meeting on
Tuesday night the developers were given planning consent for the fifth phase
of the Barrier Park East development, also known as Waterside Park. The
fifth phase comprises 192,000 sq ft of residential space across 193 flats as
well as 4,250 sq ft of commercial space and a 1,550 sq ft crèche. Consent
was granted following issues previously raised by the Newham council over
layout, appearance, scale access and landscaping. A report before the
council on Tuesday said the council’s concerns had been alleviated. Barrier
Park East, located in Newham’s Royal Docks, was first given outline planning
approval in December 2009. It comprises 780 homes as well as retail, leisure
and community uses. Occupation of homes in the first phase began in December
last year and the second phase, Connaught House, is complete and occupied.
The third phase, Meadow View, will be available for occupation at the end of
this year and fully complete in February 2013. The whole scheme is due to be
completed by March 2016.

-          William Hill confident as profit rises 19%: (WILLIAM HILL IS A
TENNANT IN OUR ALDERSGATE PROPERTY INVESTMENT IN LONDON - NICO) William Hill
said that it was “confident” of its prospects for the year ahead, as it
announced that operating profits rose 19 per cent in the first quarter,
fuelled by high margins in its retail business and the growing popularity of
online betting. With smartphone use on the rise, the company’s Sportsbook
mobile app was downloaded 190,000 times from the Apple App Store during the
quarter, bringing William Hill around 57,000 new customers, and helping its
online division to post £38.3m in operating profits, up 29 per cent on the
year before. Ralph Topping, chief executive, said that he was “pleased” with
the results. “Our investments in marketing and innovations continue to
deliver benefits, with our Sportsbook exceeding £50m in turnover in a single
week for the first time during the quarter and mobile turnover reaching
almost £11m in a single week,” he said, adding that the success of the
company’s online operations highlighted the importance of its multi-channel
offering. Operating profits from the group’s retail operations were up 8 per
cent, as gross win margins rose from 18.1 to 19.4 per cent, thanks in part
to a string of bookmaker-friendly football results. Analysts at Investec
said they were upgrading their earnings forecasts for William Hill following
the announcement, and described its margin performance as “exceptional”.
“The 220 bps margin outperformance versus Ladbrokes is eye-catching (19.4%
vs 17.2%) and, we think, reflects a higher proportion of football wagering
at William Hill (higher underlying and first quarter seasonal margin than
horseracing) and a superior trading operation,” they wrote. Ladbrokes, a
rival UK-based bookmaker, said on Thursday that its operating profits rose
by 3.9 per cent in the first quarter. Shares in the company, which have
risen 35 per cent this year, were up 3.19 per cent at 275.3p in early
morning trading in London, a level not seen since 2008.

-          IMF sees banks deleveraging by $2.6tn: A drastic contraction of
European bank balance sheets during the next 18 months could jeopardise
financial stability and economic growth in Europe and beyond, according to
forecasts from the International Monetary Fund. In its Global Financial
Stability Report, published on Wednesday, the fund warned that European
banks looked set to shrink their balance sheets by $2.6tn (€2tn) over that
period. Unless officials improved their policy response, the IMF said,
European banks would dump almost 7 per cent of their assets by the end of
next year. The IMF expects most of the deleveraging to come from sales of
securities and non-core assets. However, it also sees credit supply
shrinking by 1.7 per cent as banks rein in lending to businesses and
households hitting the broader economy. After examining the efforts of the
continent’s 58 largest banks to boost their capital ratios, shed
unprofitable businesses and cut their reliance on wholesale funding, the
fund’s analysts predicted the deleveraging process would be more severe than
previously anticipated. While acknowledging that balance sheets needed to
shrink after the financial excess seen in the run-up to the crisis, the IMF
warned that the risk of a “synchronised and large-scale deleveraging” could
spark financial instability and hit economic growth. “The highly uncertain
European policy backdrop is driving banks to keep shrinking, even if we
avoided a disorderly and abrupt crunch,” warns Huw van Steenis, banking
analyst at Morgan Stanley. The fund said better policies – such as a
consideration of more easing by the European Central Bank and further
structural reforms, as well as progress on bank restructuring and resolution
– would prompt a smaller, 6 per cent contraction in banks’ balance sheets,
which would boost euro-area growth by 0.6 per cent. IMF assessments assume
the bulk of deleveraging will occur through the form of asset sales, rather
than a drop-off in lending. Andrea Enria, chair of the European Banking
Authority, said earlier this month less than 1 per cent of the deleveraging
represented true cuts to lending. The IMF also vindicates the EBA’s
controversial call for banks to hold at least 9 per cent capital by finding
evidence that higher equity buffers and capital ratios boosted banks’ share
prices. “Banks with higher tier one capital outperformed other sample banks
during the European sovereign debt crisis,” it said, adding that a 1
percentage point increase in a bank’s capital ratio during the past two
years added 0.5 per cent to monthly stock returns. Elsewhere in the report,
the fund warned of the risks presented by an ever-decreasing stock of “safe”
assets. “The number of sovereigns whose debt is considered safe is declining
– taking potentially $9tn in safe assets out of the market by 2016, which is
roughly 16 per cent of the projected total.” It expects this trend to
inflate prices for the few remaining assets deemed to be safe.

-          Tesco announced it will reduce new net space growth by 38% and
spend £1bn revamping its existing estate in a preliminary results statement
released this morning. (TESCO IS ALSO A TENNANT IN OUR ALDERSGATE PROPERTY
INVESTMENT IN LONDON AND WAS ALSO IN OUR SHEFFIELD RETAIL ACQUISITION WHICH
NETTED INVESTORS AN IRR OF 101% - NICO) The supermarket giant reported a
1.6% rise in underlying pre-tax profits to £3.9bn for the year to February
25, 2012. Group sales went up 7.4% to £72bn. A store refurbishment programme
will start this year as part of a £1bn commitment to improve the Tesco
shopping experience for customers. The programme will start with 430 stores,
which will see warmer colours, better lighting and a stronger emphasis on
fresh food. This includes around £400m of capital investment and will focus
on service, store formats, pricing, range and rolling out click and collect.
However, the company said overall group capital expenditure would be lower
this financial year, down from £3.8bn in 2011/12 to £3.3bn in 2012/13,
mainly driven by the reduced new store opening programme in the UK. Profits
from the UK business were down 1% for the period to £2.5bn, as customers
continued to be squeezed by falling incomes and high petrol prices. Chief
executive Philip Clarke admitted that investing more into the UK store
estate would affect profits in the short term. “These are decisive steps and
this cost investment – as we have already announced – will constrain our
near-term profitability. We are also focusing our lower overall capital
expenditure more into our existing stores and in building our online
businesses. We are adapting our UK capital plans so that we have the right
store base for the future, to underpin the returns that create long term
value for our shareholders. Together these steps are the right things to do
both to improve the shopping trip for customers and to secure a return to
profitable growth in the UK.” Tesco issued its first profit warning in 20
years in January after suffering a disappointing Christmas sales period.

-          Jamie Oliver will open his fifth Union Jacks restaurant in
London’s Covent Garden, it was announced today. The restaurant, which
debuted at Central St Giles in Midtown last year, will occupy a 3,500 sq ft
unit at the Market Building in Covent garden’s piazza. It will occupy two
floors in the north hall of the building, providing seating for 158 diners.
Oliver said: “The Piazza at Covent Garden is one of the most buzzing parts
of the city, with Londoners and tourists visiting all day and night. So this
Union Jacks needs to be special and it will be – the restaurant will look
fantastic.” Beverley Churchill, brand director for Covent Garden, said:
“Over the past few months Covent Garden has become London’s new foodie hot
spot attracting fantastic new concept restaurants such as Jamie’s Union
Jacks and international icons including Balthazar.”

-          Swiss watchmaker Breitling has agreed a deal to open its first
standalone store on New Bond Street at what is expected to be a record rent
of £1m. The retailer will move into a store at 130 New Bond Street after US
retailer Diesel surrendered its lease to the private landlord. The
watchmaker is expected to open 6,000 sq ft store in the new year and is
understood to have agreed a deal with the landlord to return the first floor
of the building for office use. It is understood that Diesel, which has
traded on Bond Street since 2006, is now looking to open a 15,000 sq ft
store on Regent Street.

-          Regional property services firms are to be given a much-needed
boost to fee income through the chance to advise the government on its
£280bn estate. The government is reviewing its prized Estates Professional
Services framework, which is worth millions in fees to the UK’s biggest
property services firms, as part of the prime minister’s drive to award more
government contracts to small and medium-sized businesses. The framework is
to be retendered in September and officials at the Government Procurement
Service have held a series of meetings with incumbent firms to discuss the
shake-up. GVA, DTZ, Drivers Jonas Deloitte, Jones Lang LaSalle, Colliers,
Lambert Smith Hampton, Knight Frank and BNP Paribas are the incumbents, 

-          although GVA, DTZ and Drivers Jonas Deloitte are thought to carry
out more than 80% of the work. A Cabinet Office spokeswoman said: “The
current framework is due to expire in September, so the time is right to
review it and make sure that it is delivering the expertise the public
sector needs at the right cost, as well as supporting innovation and
simplifying processes. “The Government Procurement Service is now reviewing
the framework and engaging with the property industry as part of this
process. The government has been clear that opening up its contracts to SMEs
is a priority.” GVA carries out around 46% of the work and boasts the
coveted position as sole property adviser to the Ministry of Defence. It is
understood to earn more than £6m a year in fees from the framework. Among
the options being mooted is a split of advisory and transaction work, so
less substantial transactions can be pooled for which regional companies can
pitch. Other options are to split frameworks into smaller pieces, divided by
region, or maintain a core roster of eight to 10 companies, which will be
forced to abide by a threshold of jobs that they must subcontract to smaller
firms. The Estates Professional Services framework is a list of
“pre-approved providers” public sector bodies use to manage their estate.
Bodies ranging from central government departments and local councils to the
emergency services and the NHS use the framework to procure work, tasking
firms with cutting the estate’s £25bn-a-year running costs. “Anyone who
isn’t losing sleep about failing to get on a framework of this size at the
moment is crazy,” said one agent. Prime minister David Cameron announced a
series of measures to help small firms compete for billions of pounds of
government contracts in February, and said the aim was to give businesses
greater access to the bidding process by eliminating “excessive bureaucracy
and petty regulation”. Long-term departmental contracts, such as the
Ministry of Justice’s five-year north of England property management
contract, which GVA won a year ago, will be unaffected, and the new rules
are to be applied following retendering in September.

-          UK private sector improves in March. This week saw the release of
the March Purchasing Managers’ Indices (PMI) - a key survey of private
sector activity. The UK’s services, manufacturing and construction sectors
all showed improvement. The manufacturing sector gave the highest reading
since last May and the construction sector rose to the highest level since
October 2007. Most importantly the services PMI rose from 53.8 to 55.3 (a
reading above 50 signals expansion), which is in line with the historical
average and points to a decent pace of expansion within the sector. The
surveys suggest that the UK economy rounded off Q1 on a positive note and
economic contraction over the quarter is increasingly unlikely.

-          Weak output figures are at odds with improving survey data. UK
manufacturing output fell 1.0%m/m in February after a 0.3%m/m drop in
January. This is the largest fall in 10 months. In annual terms production
fell 1.4% compared to February 2011. Production data can be volatile and are
frequently revised, but it’s odd that it differs so much from the PMI. The
PMI is more forward looking so hopefully the improved data translates into a
better manufacturing output figure in March.