Moldova signs deal with EIB to lure more EU funding
The European Investment Bank (EIB) and Moldova have signed a framework agreement that opens the way for EIB investments in transport, energy, telecommunications and environment infrastructure in the ex-Soviet country, the bank said last week.
An EIB statement said that the projects mainly included the construction or upgrading of roads and railways along the European Union-defined transport corridors that link Moldova with the rest of the EU.
The EIB said the agreement came in the context of an EU decision to set up a €500m facility, allowing for the bank to lending to its eastern neighbours, including Russia, Ukraine and Moldova.
"The EIB's activities will be developed in close cooperation with the European Commission, the European Bank for Reconstruction and Development and other international financial institutions operating in the country, notably the World Bank and the IMF", the EIB said.
Moldova, one of the poorest countries in Europe, is the first country in the Commonwealth of Independent States to sign an action plan with the EU. The plan, signed in February, is part of the EU neighbourhood policy and targets political, economic and social reforms in Moldova according to European standards. The plan also calls for bilateral cooperation through the implementation of projects in different areas.
Moldova will have a common border with the EU starting next year when its western neighbour Romania will join the bloc.
Kaunas – Debrecen road to be ready by 2015
A new express road leading from the Lithuanian town of Kaunas to Debrecen in Hungary via Bialystok, Lublin, Rzeszow, Preszow, Kosice and Miskolc is to be built by 2015.
The purpose of the new 1,000km S-19 north-south road is to link up the four countries lying on the eastern edge of the European Union: Lithuania, Poland, Slovakia and Hungary. The Polish section, which will be more than 600km in length, is expected to cost €2.6bn. The road is to be given priority status in the transport policies of all four countries.
The first stage – the Miedzyrzec Podlaski-Lubartow section – will be launched in 2009. A year later, workers will begin digging the Krasnik-Stobierna stretch. More than 10m people live along the proposed route.
Bosnia to have new network of motorways by 2012
Bosnia's Serb Republic and Austrian builder Strabag have agreed to the construction of roads in the region worth €2bn. The Serb Republic government and Strabag signed a memorandum of understanding in Vienna to form a joint venture that will build a network of motorways throughout the region by 2012, under a 30-year concession deal.
The Serb Republic is one of the two autonomous parts of war-divided Bosnia. The other is the Muslim-Croat Federation.
"This is the biggest post-war investment in the Serb Republic that will allow the inflow of €2b of foreign direct investment", Bosnian Serb Prime Minister Milorad Dodik is reported to have said.
The project includes a motorway connecting the Serb Republic's administrative centre Banja Luka with Gradiska on the Croatian border to the north and an east-to-west motorway from the Serbian border to the western town of Prijedor.
It also calls for the construction of the Serb Republic section of the north-to-south pan-European corridor, connecting the Hungarian capital Budapest with the Croatian port of Ploce and passing through Bosnia.
The Serb Republic Government also borrowed €20m in October, from the domestic bank NLB Razvojna Banka, for the construction of a 29km Banja Luka - Gradiska road in the north of the country.
Microsoft considers expanding to Albania
U.S. software giant Microsoft is reported to be considering expanding further into southern Europe and its next target country might be Albania, according to a senior company official. The company already has offices in Romania, Croatia, Serbia and Slovenia.
Microsoft will open a customer support centre in Bulgaria next year with 40 to 50 employees, which will provide services for clients in southeast Europe and Greece.
Renault to invest €450m in Romanian research centre
Romania's government announced last week that French car maker Renault will invest more than €450m to set up a research centre in the southeast of the country.
"The project involves an investment of more than €450m and will be completed in three phases by 2015", the government's press office said in a statement.
The centre, to be located in Titu, in the southern county of Dambovita, will employ more than 3,000 engineers and technicians, it added.
Renault already owns Romanian car maker Dacia, which produces the Logan, which is a popular compact model in Romania.
German REITs gains approval but excludes residential property
German Real Estate Investment Trusts (REITs), have moved a step closer to becoming reality, after the German government approved draft legislation. However, quite controversially residential property has been excluded from its ambit.
Martin Heinsius of DLA Piper Frankfurt's said: "This is nonsense. This exclusion will create problems because it will prevent potentially lucrative exit scenarios for municipalities. The city of Berlin, for example, is in a bad financial state and could have benefited from the advantages of the REITs legislation as it owns several companies that own residential portfolios."
The new draft German REITs legislation is scheduled to come into force in January 2007.
Another shopping centre for Krakow
A new multifunctional centre is to be built in Krakow on the site of the old Bonarka chemical works. Hungarian developer TriGranit and Immoeast, a firm based in Austria are behind the project. The investment will be located on approximately 18 hectares. The Bonarka centre will be modelled on the Silesia City Center in Katowice. It will be used for services, commerce and entertainment. A hypermarket will be built on the site together with a housing development and an office building.
The old industrial buildings where the future investment is to be located will begin to be pulled down before the end of November and construction work will be underway by the second half of next year.
Germany to provide over €60m in financial aid to Montenegro in 2007
Germany will provide over €60m in low-interest loans and grants to Montenegro next year to help finance infrastructure projects in the tiny Adriatic state, a government official announced last week.
"The agreement envisages €44.15m in financial aid and €11.65m in technical support", said Montenegro's Economic Minister Branimir Gvozdenovic.
Montenegro would also get a German grant of some €9m.
The money would be mainly used to complete projects for improving the water supply system alongside Montenegro's Adriatic coast. The poor state of the system has long been seen as a drawback to the further development of Montenegro's tourism and property industries.
Tourism is a core sector of Montenegro's economy, contributing 14.8% of its gross domestic product (GDP). The share of tourism in GDP is expected to grow to 21.3% by 2014, according to a report by the World Travel and Tourism Council.
Montenegro has secured some €140m in financial assistance from Germany since 2000.
EIB Group focuses on Turkey
2006 is proving to be a record year for EIB Group’s operations in Turkey. The Group, composed of the European Investment Bank (EIB) and the European Investment Fund (EIF), is reaching new levels in terms of its exposure to the Turkish market.
The EIB commenced operations in Turkey more than 40 years ago and has financed a substantial and highly diversified portfolio of both public and private sector projects across all key areas of the country’s economy. Total lending in the period 2000-2005 came to €3.2bn. Against the background of growing investments in the country, accelerated by the start of EU accession negotiations, the EIB’s investments in Turkey will reach a record figure of some €1.5bn in 2006, marking a 70% increase compared to the previous year and confirming the growing share of support to private sector initiatives.
The EIB has partnered with national and foreign industrial investors and is supporting, through cooperation with an extended network of local banks, a vibrant SME sector in Turkey. Strong trading links and efficient infrastructure, including transport corridors will support the prosperity of the country and its efforts towards EU membership. The EIB re-confirms its strong commitment to Turkey and underlines that it is the largest recipient country of EIB financing outside the EU. “While the Bank is deepening its activity in the above fields it also wishes to progressively expand into other priority areas, such as education and RDI”, underlined Matthias Kollatz-Ahnen, EIB’s Vice- President.
At the same time, EIF, which is the risk capital arm of the EIB, has approved venture capital investments in excess of €71m this year. EIF’s long-term commitment to this market was consolidated with a partnership agreement with TTGV, the Turkish Development Foundation of Turkey earlier this year, which aims at jointly sponsoring new initiatives to promote the growth of SMEs, particularly technology-based companies.
Worldwide News
Makaseb to invest $27bn in regional real estate
Makaseb Holding has announced that it plans to invest $27bn in Dubai's property market over the next decade.
The company is a joint venture between Rufi Group of Companies, Sharm Land Limited, AA Investment Company and Quattro Limited.
Hesham Abd Al Ghani, one of the founders of the company, said: “We are witnessing a period of rapid growth in the regional real estate market, which makes real estate assets an attractive proposition, yielding high returns at relatively little risk. Makaseb has been formed as a platform to tap into the real estate market by acquiring existing real estate projects and also developing new ones independently or through joint ventures.
“Makaseb will diversify its investments in many countries in the Middle East and we will soon be announcing many property development.
Chinese property prices up 6.3% in September
Average Chinese residential property prices rose by 6.3% in September 2006, compared to the same period last year, according to a recent report.
The National Development and Reform Commission and the National Bureau of Statistics showed prices of newly-built residential properties rose by 11.4% in Xiamen, 10.6% in Shenzhen, 10.3% in Beijing, 10% in Fuzhou, 8% in Chengdu and 8.7% in Guangzhou. However, average property prices in Shanghai dropped by 2.3%.
Property prices in Perth lead the way in Australia
Average property prices in Perth have risen by a staggering 46% over the past 12 months, compared to capital gains of just 0.9% in Brisbane and 0.2% in Sydney. Overall, Australian house price inflation stands at 9.5% nationally, according to the Real Estate Institute of Western Australia.
Canadian price rises to slow in 2007
Average property price appreciation in Canada is set to slow in 2007, according to a new report by RE/MAX.
The RE/MAX Housing Market Outlook 2007, found that while demand for residential property remains strong, the supply of properties coming on to the market is set to increase. Nationally, RE/MAX forecast that 462,000 properties will change hands next year, making 2007 the third best year on record, behind 2005 and 2006.
After four years of double-digit gains, RE/MAX predicts that average property prices will appreciate by 5% to $290,000 by year-end 2007. However, the report suggests that the level of capital gains could be as high as 10% in Kitchener-Waterloo, St. John’s, and Charlottetown.
The RE/MAX Housing Market Outlook 2007 surveyed 17 markets across Canada, including Vancouver, Victoria, Kelowna, Calgary, Edmonton, Regina, Saskatoon, Winnipeg, Kitchener-Waterloo, Hamilton-Burlington, Toronto, Ottawa, Montreal, Halifax, Charlottetown, Saint John and St. John’s.
Elton Ash of RE/MAX says: “Affordability is one of the more serious issues facing today’s real estate consumer, yet purchasers remain steadfast.
“Buyers are simply getting more creative in their approach to homeownership, considering alternatives to single, detached homes such as semi and row housing, town houses, and condominium apartments. They’re also looking at peripheral areas located close to the city centre that provide a better bang for the buck. New mortgage products that extend the traditional 25-year mortgage amortization period to 30 and 35-years may also help them realise their goal of owning a home sooner rather than later.”
