Regeneration plans for the City of Iasi in Romania
Plaza Centers has announced that it has acquired a retail development project in Iasi, Romania. The estimated development budget for the project is €115m. The project will see a new retail-led mixed use development built in Iasi, the largest city in Iasi County, situated in the north-east of Romania.
The City of Iasi has a population of over 340,000 and is located within a larger catchments area of 820,000 people. The development, which occupies a plot of 46,500sqm, will encompass 54,000sqm of retail space, 15,000sqm of office space and 46,200sqm of parking, providing 1,400 spaces.
Additionally, the terms of the acquisition provide the option to develop 70,000sqm of residential accommodation on the site, which the Company may consider selling to a third party. The Company anticipates that the centre will be completed in 2010.
Commenting on the acquisition, Ran Shtarkman, President and CEO of Plaza Centers, said: “The development of this major mixed-use scheme in Iasi will provide the city with a prestigious and exciting new shopping and entertainment destination. We look forward to welcoming a range of high quality retail and commercial tenants to the centre.
“In acquiring our fourth significant development project in Romania in only nine months, we are demonstrating our clear belief in the country’s prospects.”
Dresden to get 52,000sqm shopping centre in 2009
Construction started last week on ‘Centrum-Galerie’, which will be Dresden’s largest shopping centre when it opens in September 2009. Multi Development is building the centre, which will significantly enhance the Prager Strabe as a residential, shopping and leisure location. In just over two years, a total of around 150 new shops and restaurants will open their doors in Centrum-Galerie to the people of Dresden.
Axel Funke, managing director of Multi Development Germany, said: “From September 2009, Dresden’s inner city will have a new tourist magnet: with its urban, very modern architecture and a sophisticated international retail offering, Centrum-Galerie will help to make the Prager Strabe one of Germany’s best shopping boulevards!”
The demolition of the old Centrum store has been completed and the new department store will consist of two striking building complexes, with a total of around 52,000sqm of trading space. Centrum-Galerie will be built over four public levels and the car park will contain around 1,000 spaces.
Poland halts ‘Via Baltica’ highway
Polish Prime Minister Jaroslaw Kaczynski has ordered the suspension of works on a contested highway running through protected wetlands in Poland, after being challenged by the European Commission.
The construction of a road running through the Rospuda valley, a natural site protected under the EU’s Natura 2000 programme, is to be suspended until EU judges rule on its legality, Kaczynski said on 31 July.
“The work in the Rospuda valley will not start”, Kaczynski told a Polish radio station, adding that construction on other sections of the road will go ahead. “We simply have to show patience”, he added, saying that he believed the Commission had no legal basis to challenge the project.
Construction on the ‘Via Baltica’ was due to start on 1 August. The road will link Prague with Helsinki and is seen as an important infrastructure project to improve transport links between several countries in central Europe.
Office space in outskirts of Sofia increases by 50%
The amount of office space available on the outskirts of Sofia increased by 50% last year, according to research by Colliers International. Office space in the region increased from 167,000sqm in 2005 to 251,000sqm in 2006.
In comparison, the total volume of office space in the centre of Sofia increased by 9.5% during the same period.
Class A office space increased by 34 per cent and Class B by 21.5%.
The lack of land available for office buildings, along with insufficient parking spaces were the main factors forcing investors to build far from the centre, Colliers added.
Office space in the centre of Sofia currently totals just 127,000sqm.
Nearly two-thirds of office space in Sofia is occupied by companies from the financial sector, including insurance, investment and real estate.
In view of the expected economic growth, Colliers predicts that demand for high quality offices will increase in future.
Worldwide News
Jamaican mortgage market continues to grow
Building societies in Jamaica have reported that the number of new loans booked is increasing rapidly and that the dollar value of loans issued by building societies has grown by 50% over the last three years.
According to data released by the Bank of Jamaica (BOJ), £74.6m in new mortgages were booked in 2006 an increase of 42% per cent from the £52.4m taken out in 2004. The actual number of mortgages taken out increased from 3,500 in 2004 to just short of 4,000 in 2005.
Experts attribute the growth of the real estate market to escalating prices, which is being fuelled by the combination of Jamaicans’ desire to own their own homes and the decline in mortgage rates. It is estimated that developers would have to spend the next five years building two and three-bed townhouses in order to meet the demand from the middle-income market.
As an example of rising prices, the development in Long Mountain in St Andrew was initially selling townhouses £61,000 but less than five years later those units are now reportedly being sold for £129,000.
Interest rates are falling thanks to increased competition amongst lenders and currently, VMBS and Jamaica National Building Society are offering mortgage rates of 12.99% and FCIBS has US dollar mortgage loans at 8.25%.
However, the main competition has come from the National Housing Trust (NHT) whose interest rates now range from 2-6%. In 2005, the NHT doubled its loan ceiling from £11,000 to £21,500. It was thought that this would be the death knell of building societies as they had constructed their business models around making up the lion’s share of the total purchase price. With the increase in cheap NHT funds, building societies had to go after the higher end of the market and the BOJ data reveals that building societies actually booked 17% more loans between 2005 and 2006.
New housing law in Syria to boost property market
A new law was approved by the Syrian President in early July that will easeaccess to housing for middle and lower income households. Previously, people wishing to takeout a mortgage could do so only through the Real Estate Bank, a state-owned institution, at rates fixed by the Central Bank of Syria (currently 8%) and for a maximum maturity of 15 years. The new Law reduces this rate to 4% and allows the maturity of the loans to be increased to 25 years.
Meanwhile, building costs will also go down. Housing cooperatives that are building units of 130sqm or less will benefit from an exemption of custom fees on imports of cement and steel, as well as a 25% discount on freight costs charged by state transport companies (railways and maritime) for building materials and equipment.
The other major area of the new Law is related to the operations of the housing cooperatives, which are traditionally marred by bureaucratic delays and financial scandals. For instance, the financial accounts of the cooperatives will now have to be submitted every month instead of every year and the board of directors can be re-elected only once instead of indefinitely.
Meanwhile, other new facilities brought by the Law include the possibility for expatriates to subscribe to cooperatives, as well as for people to subscribe to two housing units with the same terms, one for living in and the other as a vacation home.
The real estate market is extremely strained in Syria. Since 2003 real estate prices have gone up significantly partly because of a supply bottleneck. Another important factor is the inflow of Iraqi nationals into Syria, consequently raising demand for real estate and boosting its prices. Rents in Syria have been on the rise as Iraqis seek safety in Damascus and Amman.
The government has plans to build around 50,000 new flats in the coming five years but this is nowhere close to being sufficient, hence the arrival of foreign investment. Syria has signed free trade agreements with a number of countries namely Turkey and Iran, and signed an Association of Agreement with the EU, that is intended to lead to a free trade agreement by 2010.
A Damascus World Trade Centre is to be built at a cost of $120m and Dubai-based developer Emaar Properties and IGO are investing $495m in a residential, commercial and retail development called Eighth Gate in the Syrian capital Damascus.
Over the next decade Qatari investments are expected to amount to $10bn. The first project will be the Pearl of Damascus tourist resort which should cost $60m. Saudi tourism investments in Syria have already reached $800m.
Syria has also given an initial approval for a consortium of Syrian, Kuwaiti, and Saudi investors to launch projects valued at $15bn in the region of Jabal al-Sheikh near Hermoun Mount between Syria and Lebanon. The project will be implemented in 15 years and will include hotels, business centres, tourist facilities, sport centres and ski resorts.
South Koreans double property investment overseas
South Korean residents bought twice as much foreign property in the first half of this year as they did in 1H 2006, because of new government deregulation, the central bank announced this week.
According to the Bank of Korea, residents reported 1,992 cases of purchasing foreign real estate properties worth $602.6m in the January-June period, up from 980 cases worth $323.4m a year earlier.
As part of measures to stop the South Korean currency (the Won) gaining in strength against the US Dollar, the government raised the ceiling on individuals’ overseas property purchases for investment to $3m, from $1m in February 2007, and removed limits on purchasing properties for private residency in March 2007.
As a result, there was an enormous surge in purchasing property for investment, rising from $21.9m in 1H 06 to $391.2m in 1H 07.
Individuals invested most heavily in the United States to buy homes and shops, followed by Canada, Singapore and Malaysia.
Overseas membership purchases, mostly golf club memberships, inched up to 600 cases worth $17.8 million in the first half from 591 cases valued at $16.8 million a year earlier, the central bank said.
Mixed reports from the Australian property market
Property markets in Melbourne, Brisbane and Canberra are booming, while a turnaround in Sydney unit prices suggests an investor-led recovery may be underway in the NSW capital, according to figures released by Australian Property Monitors (APM), a national supplier of online property prices.
The figures show Canberra is the top riser with house prices having grown by 17.6% in the 12 months to June 2007. The average price of a house in the capital has risen to A$488,804 (£205,380), compared to £174,640 a year ago. The average overall unit price in Canberra has risen by 4% over the past 12 months to £134,280. The average price of a house in Canberra rose by 7.4% in the second quarter of this year alone, the figures showed.
In Sydney, both house and unit prices are on the rise again, up 1% and 2.2% respectively in the second quarter. However, the average cost of a house in Sydney, at £220,000, remains a few hundred pounds below what it was a year ago.
APM general manager Michael McNamara said the growth in unit prices in Sydney over the June quarter indicated the start of an investor-led recovery: “Investing in property is becoming more attractive given increasing gross rental yields and the slowing of the stock market”, he said.
However, property prices in the resource-heavy capitals of Perth and Darwin have gone off the boil after peaking in the last quarter of 2006. A 5.2% fall in unit prices in Darwin in the June quarter suggest ‘a hard landing may be in store’ for the Northern Territory capital, APM said.
In Perth, house prices fell marginally by 0.2% in the second quarter, while unit prices rose only slightly, increasing by 0.4%.
McNamara said the strength in property markets in eastern capitals could be attributed to low stock levels, increasing gross rental yields and stable interest rates.
