Tishman Speyer and Commerz Real AG are planning the construction of a 135m high skyscraper in Frankfurt’s banking district. The building will have 37 floors and will be completed in early-2011. Construction is due to start in a couple of month’s time.
Eurohypo AG will finance the project. Stefan H. Brendgen, managing director of Tishman Speyer Germany, reportedly said: “The development of another high-rise building shows that we have every confidence in the City of Frankfurt. We are pleased to be able to follow OpernTurm with the addition of another skyscraper to Frankfurt’s skyline.”
Hubert Spechtenhauser, spokesman of the board of Commerz Real AG, reportedly added: “Developing mixed-use projects comprising office, retail and housing space will continue to give the dynamism of the site a boost. This is proof of our conviction that the core of the financial centre has a future.”
Major demolition planned in Moscow
Moscow authorities intend to demolish thousands of worn-down Soviet-era concrete residential buildings, but have warned that a renovation programme is unlikely due to excessive costs.
The demolition will apply to 20m sqm of residences in the Russian capital by 2025 accounting for around 400,000 apartments of an average size of 50 sqm. The demolition scheme would cost between $600m and $1bn – according to the Russian Developers’ Association.
Building the new homes would cost an estimated $30bn, but would guarantee a steady supply of work for construction companies for the next 18 years.
Russians now buying as many homes in Bulgaria as the British
Research from Bulgarian estate agency Green Life Property Development has revealed that demand for holiday homes in Bulgaria from UK buyers has declined by 30% due to concerns about over-development, over-supply and the ongoing credit crunch.
UK buyers now account for 40% of sales of holiday homes, compared to 70% the year before. Russians now account for 38%, according to Green Life, with Scandinavians making up 4% of the market and Greeks 2%.
Green Life reported that Russian buyers were more interested in buying for investment than personal use and tended to know more about resorts like Pamporovo. It claims that the percentage of holiday homes bought as buy-to-let investments in the main ski resorts has doubled since 2006.
Green Life announced in December that it will complete a €25m holiday complex in the ski resort of Bansko by the end of 2009, including residential apartments and a hotel.
Romania and Southern Alps tipped to benefit from budget flights
Following the announcement that Ryanair is to introduce 50 new routes across Europe, experts at The Homebuyer and Property Investor Show (7-9 March, ExCeL, London) anticipate that Romania and Southern France will see the greatest property price increases this year.
Excellent transport links are the top requirement when choosing an overseas property according to a survey conducted by the Homebuyer Show. Of those polled 65% said that this was the most important consideration when choosing a home abroad.
Ryanair’s two new routes to Romania will be from the UK to Arad, on the western side near the border to Hungary, and the ancient city of Constanta, which is located on the coast of Romania, east of Bucharest.
Ben Mason, partner of Someplace Else, comments, “ Constanta is the oldest city in Romania and the home to many of the country’s architectural treasures. Its historical monuments, ancient ruins, grand Casino, museums, shops, and proximity to beach resorts make it the focal point of Black Sea coast tourism and its popularity is set to soar with the introduction of low cost flights from the UK, making it a location prime for investment. The A2 freeway is also expected to be completed this year which will connect the city with Bucharest.”
The Southern Alps are also expected to benefit from the expansion of low cost airlines across Europe. In December 2007, Easyjet launched more flights from the UK to Grenoble, coinciding with the start of the ski season and capitalising on the region’s status as the top destination for British skiers.
There are significant opportunities for buyers in the Southern Alps. Les Arcs and La Plagne have grown in popularity, but the average price per square metre of a property is still significantly lower than traditional resorts at €5,000sqm, compared to Meribel which varies from €10-40,000sqm for large luxury apartments and chalets in the centre of town. As a result of low cost flights and improved affordability, it is expected that property prices in this region will increase by 10% in 2008.
Nick Dowlatshahi, managing director of Leapfrog Properties, comments: “Some buyers had looked at Bulgaria for low-priced ski properties, but found an extreme lack of infrastructure and limited snow. The French Alps have always been popular with buyers and those on a budget are returning to the area attracted by the small, high-up resorts which are easily accessed from the UK.”
Worldwide News
Rental demand increasing in some US markets
The withering US housing market and tougher mortgage requirements have strengthened demand for rental apartments in some areas, according to data just released by real estate research firm Reis.
Nationwide, the U.S. apartment market remained sturdy, as the vacancy rate fell 0.2% (in Q3 2007) from the previous quarter to 5.6%.
Meanwhile, effective rent - the amount paid net of any free months or other incentives - rose 1.4% from the previous quarter to $964/month, the biggest quarterly increase since Q3 2006, according to Reis.
“The interesting story is in the conversion markets - Las Vegas and Phoenix are showing signs of weakness now, as well”, Reis chief economist Sam Chandan said.
Las Vegas saw apartment vacancies rise 0.5% to 5.3% and Phoenix saw the rental vacancy rate rise 0.4% to 7.8%, as investors and second-home buyers sought to rent their condominiums and homes rather than sell them at a loss.
Other once-hot home buying markets, such as Fort Lauderdale and Orlando in Florida, saw vacancies increase by 0.6% and 0.5% respectively. Orlando’s vacancy rate is now 6.8%, (20% higher than the national average, while in Fort Lauderdale it is still low at 4.6%.
However, Memphis, Tennessee was the worst market in terms of vacancies, with a rate of 10% in the third quarter.
New York had the lowest vacancy rate, at 2.2%, and the highest effective rent growth, at 3.6%. Fairfield County, Connecticut; Long Island, New York; Central New Jersey; and Orange County, California followed with vacancy rates at 3.2% or less.
California ’s San Francisco and San Jose both saw effective rent grow by more than 3% over the prior quarter, (an annual rate of 12%).
$3bn Pearl Dubai project reviewed
Pearl Dubai, a consortium of investors led by the Al Fahim group, has announced that it has acquired and reviewed the US$3bn project of the ‘Dubai Pearl’. The new project will respect sustainable development standards and should be completed by December 2010.
‘Dubai Pearl’ will be a business centre, with residential, cultural and entertainment areas with a total surface area greater than 1m sqm. It is being built in a special trade area called Tecom.
The complex will rest on a huge circular podium that will be made into a multi-storey car-park. Nine towers, each 60 storeys high, will be built around the perimeter and they will all include luxury apartments, shops, restaurants, hotels, cinemas and a theatre with seating for 1,500-2,000 people.
New Zealand house price growth slows to 6.7%
Latest data from industry group the Real Estate Institute of New Zealand for December 2007 showed the median price of houses sold increased by 0.6% to NZ$352,000 over the previous month, with annual growth slowing to 6.7%.
The speed of annual price growth eased for the fourth month in a row in December.
However, government agency Quotable Value (QV) said prices have risen by 10% in December, compared to a year earlier, slowing from annual growth of 11.4% in November, the lowest annual growth rate in nine months.
QV spokesman Blue Hancock reportedly said in a statement: “The cost of borrowing and slowing immigration has softened demand. There is nothing in our statistics to suggest that this trend will not continue into 2008, with the spring market having failed to provide the usual resurgence.
The Reserve Bank of New Zealand raised its base rate by 1% to 8.25% last year over concerns about strong domestic spending, particularly in the housing market, and rates are widely expected to stay at that level for most of this year.
Annual price growth in Auckland slowed to 9.1% in December, from 10.6% in November, while house value growth in the capital Wellington eased to 11.4% from 11.6%.
The South Island’s main city, Christchurch, slowed to 8.2% from 9.9%.
London named most expensive office market with prices of £135 sq ft
Fueled by hedge funds driving up rental rates in prestigious West End developments, London pushed past Hong Kong to become the most expensive city to rent office space in the world. Rental rates in Mayfair reached £135 sq ft per annum in 2007, according to NAI Global’s 2008 Global Market Report. Rents in London increased by over £20 sq ft last year, a rise of over 17%.
Hong Kong had held the title for several years, and was a strong contender in 2007 with top rents of £134 sq ft. Hong Kong’s Class A rents climbed approximately 25-30% market-wide, reflecting robust market conditions.
New York City also narrowed the gap with peak rents of £114 sq ft reported for the most expensive space in Midtown Manhattan, where the Class A vacancy rate is 5.2% and most office space costs over £51 sq ft.
“Image-conscious investment managers are driving up rental rates in Mayfair, where peak rents are almost double the highest office rents in any other part of the city”, stated NAI Global President & CEO Jeffrey M. Finn. “Hong Kong tenants have had to contend with sky-high rental rates for several years now, but in London, New York City, San Francisco, Moscow and a few other major cities, the increases registered in 2007 pose a real challenge for companies with expiring leases that were originally signed in much more favorable market conditions.”
