Tag Archives: investments
Office rents in Europe saw strongest growth of last five years in second quarter of 2016
Rents on prime office assets across Europe grew by 1.5% quarter on quarter in the second quarter of 2016 compared to 0.7% in the previous quarter, the strongest increase in the past five years. Rents in Europe outpaced the Americas and Asia Pacific regions with Stockholm recording the strongest growth in region of 9.4% followed by Berlin with growth of 6.3%. The data from real estate firm JLL also shows that Paris saw growth of 3.4% as limited new supply and more robust take-up pushed up prime rents for the fourth consecutive quarter while in Southern Europe, the momentum in the market recovery has continued in Milan with rents up 2% and in Barcelona up 3.7% and Madrid up 0.9%. Following the UK’s decision to leave the European Union headline rents have so far remained unchanged in London compared to the first quarter of 2016. The report says that rent free periods may soften as occupiers look to negotiate more flexible terms with greater lease flexibility. But the Brexit vote has so far had little effect on rental growth outside the UK. ‘Office demand is proving resilient in many of the world's dominant commercial real estate markets despite increased political and economic uncertainty which is leading to corporate occupiers striking a more cautious tone,’ said Jeremy Kelly, director in global research programmes at JLL. ‘Underlying market fundamentals are sound and corporate demand is holding up well, notably in continental Europe,’ he pointed out and added that looking to the second half of the year, a period of steady rental increases for prime European offices is anticipated. Indeed JLL is predicting rental growth of 2.5% to 3% in Western Europe which will outperform the 10 year average over the next few years. Stockholm and Madrid are expected to be the region's high performers over 2016. ‘In London, rents and incentives may come under pressure in certain sections of the market, although low vacancy rates coupled with an increasingly diverse occupier base will act to cushion the impact of weaker sentiment,’ said Jon Neale, head of UK research at JLL. ‘Our priority over the second half of the year will be to monitor occupier activity and other developments, although it is unlikely that any real conclusions over longer term market implications can be made until the nature of Brexit becomes more apparent as we move into 2017,’ he explained. ‘For the time being, however, our research indicates that the vast majority of occupier deals in progress at the time of the referendum are still continuing as planned,’ he added. Continue reading
Canadian housing market sees largest year on year fall in sales since 2013
National home sales fell 1.3% from June to July in Canada, the third month in a row that transactions have fallen, and fell by 2.9% year on year, the largest since 2013. The data from the Canadian Real Estate Association (CREA) also shows that the national average sale price was up 9.9% in July year on year but when Greater Toronto and Greater Vancouver are excluded from the figure this dropped to 7%. Sales activity was down from the previous month in slightly more than half of all markets in July, led by Greater Vancouver and the Fraser Valley. Transactions in these two markets peaked in February of this year, and have since then dropped by 21.5% and 28.8% respectively. According to CREA president Cliff Iverson much of the national sales decline in recent months reflects slowing activity in B.C.’s Lower Mainland area. ‘National sales and price trends continue to be heavily influenced by a handful of places in Ontario and British Columbia and mask significant variations in local housing market trends and conditions across Canada,’ he explained. Gregory Klump, CREA’s chief economist, said that the figures suggest that sales are being reined in by a lack of inventory and a further deterioration in affordability. He pointed out that the new 15% property transfer tax on Metro Vancouver home purchases by foreign buyers took effect on 02 August so it will take some time before the effect of the new tax on sales and prices can be observed. A breakdown of the figures shows that actual, not seasonally adjusted, sales activity was down 2.9% year on year July 2016, the first annual decline since January 2015 and the largest since April 2013. In line with softening activity in the Lower Mainland, year on year increases have been losing momentum since February 2016. Sales were down from levels one year earlier in about 60% of all Canadian markets, led by Greater Vancouver, the Fraser Valley, Calgary and Edmonton. The number of newly listed homes rose by 1.2 percent in July 2016 compared to June. While new supply climbed in fewer than half of all local markets, increases in Greater Vancouver and the Fraser Valley, Greater Toronto, Calgary and Edmonton outweighed declines in smaller markets. With sales down and new listings up, the national sales to new listings ratio eased to 61.6% in July 2016, its second monthly decline following its peak of 65.3% in May. A sales to new listings ratio between 40% and 60% is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively. The ratio was above 60% in about half of all local housing markets in July, virtually all of which continue to be located in British Columbia, in and around the Greater Toronto Area and across Southwestern Ontario. The CREA report points out that the number of months of inventory is another important measure of the balance… Continue reading
Prime seaside properties in UK can cost up to 71% more
It’s well documented that that living by the sea in the UK comes at a cost with the latest research showing prime properties on the coast can cost as much as 71% more. The prime waterfront index from international real estate firm Knight Frank points to a number of towns and cities along the Devon, Dorset and Cornwall coast which have surpassed the wider property market over the last two decades in terms of price growth. Using data from the Land Registry, based on actual sales volumes going back to 1995, the index has calculated the annual price performance of individual coastal markets relative to the average price increase across the three counties. Croyde in North Devon has been the best performing coastal market over this time, with annual outperformance of 4.1% on average. While this may seem relatively muted over the course of a year, over 20 years this equates to cumulative price growth of around 122% above the wider Cornwall, Devon and Dorset area. Over the past two decades, Croyde has seen prices more than quadruple, by 432%, compared to 310% combined across the three local authorities. A number of other long established prime markets including Rock, Salcombe, Padstow and Falmouth feature in the hotspots identified in the research, and have all experienced outperformance of at least 2% annually since 1995 according to the analysis. The index report points out that price growth and outperformance can be very location specific. For example, the average annual price outperformance for the top 15 best performing small coastal towns and villages has been 2.8%, compared with 2.6% for medium sized coastal towns such as Christchurch, Topsham and Lyme Regis and 2.5% for the top five large coastal towns or cities including Bournemouth and Exeter. It also explains that higher outperformance in smaller settlements since 1995 is likely to be related to the scarcity of available stock relative to demand. Demand for prime coastal property comes from a variety of sources. Such markets benefit from their appeal to upsizers and downsizers often moving within the local area or looking for a lifestyle change, as well as second and holiday-home buyers. The research also points out that many homes bought in top seaside locations are second homes and the announcement in the Chancellor’s 2015 Autumn Statement that a higher rate of stamp duty would be introduced for additional properties, including second homes, from April 2016 prompted a number of purchasers to bring forward deals ahead of its introduction. ‘In the short term, it may take time for the tax to be absorbed, especially in a market where there are notable levels of discretionary purchases. In turn, this may have an impact on pricing, potentially providing opportunities for committed buyers,’ the report says. ‘Over the longer term we believe transaction volumes will rise once the additional stamp duty is fully priced into the market,’ it adds. Continue reading
