European Central Bank set to raise base rates

EU Economy Commissioner concerned by Spanish property market

New airport terminal planned for Bratislava

Toyota to invest €145m in Polish plant

New bridge between Estonia and Russia

Umm Al Quwain permits foreign ownership

Property investment market in Bahrain is 'booming'

Foreign restrictions will affect China's property market

European Central Bank set to raise base rates

The European Central Bank is likely to raise base rates later this month (August), according to Jean-Claude Trichet, the president of the European Central Bank.

EU Economy Commissioner concerned by Spanish property market

Joaquín Almunia, the EU’s Commissioner for Economic and Monetary Affairs, is concerned that recent increases in Spanish property prices and Spanish household indebtedness may have increased the risks of a Spanish property bubble.

Almunia expects the Spanish property market to cool on the back of recent increases in Euro-zone interest rates. He said: “Rising interest rates must have an effect on families that have become highly indebted very quickly, with savings rates at all time lows.”

New airport terminal planned for Bratislava

Bratislava Airport will spend €93m on a new terminal that will enable it to handle up to 4.5m passengers a year. This compares to 837,000 passengers handled at the airport in the first half of this year, a 61% increase over the same period in 2005.

"Regardless of whether the airport is privatised or remains state-owned, we will have the finances for the terminal because its completion is crucial", said the chairman of the board of directors and executive director Milan Kajan.

According to Kajan, recent economic results make the company credible and thus even if the airport is not privatised it shouldn't be a problem to obtain funds for completing the terminal.

"In the air transportation business it's necessary to plan several years ahead, and we already know that in 2010 we will have 4.5 million passengers", he added.

According to rough estimates from architects, the new terminal will cost €93.2m and construction is planned to start in May 2007. It should be completed end-2008/early-2009.

Airport Bratislava, the company that operates Štefánik Airport in Bratislava, swung into profit in the first half of 2006, netting €1.04m, compared to a loss of €0.76m for the same period last year.

Meanwhile, Vienna airport operator Flughafen Wien is convinced that the Slovak Antitrust Office will approve the privatization of the Bratislava and Košice airports.

"We have a valid contract signed by both parties and are currently waiting for the antitrust office to deliver its decision", stated the company.

However, Flughafen Wien was responding to Slovak Prime Minister Robert Fico, who earlier stated that his government will try to halt the privatization process and scrap the contract if at all possible.

Newly appointed Transport Minister Ľubomír Vážny is taking a cautious stance with respect to the airport privatization, stating that the ministry is planning to review the contract for the sale of the Government’s 66% stakes in both airports.

Privatization contracts to sell the majority stakes in the Bratislava and Košice airports were signed on 10 February 2006, after the government approved the TwoOne consortium, of which Vienna airport is a member, as the preferred strategic investor for the airports.

A final decision will be made by 14 August 2006.

Toyota to invest €145m in Polish plant

Toyota Motor Corp. announced 2 August that it will invest €145m in its Polish manual transmission plant in Jelcz-Laskowice, 25km southeast of Wroclaw.

The company will set up new facilities and upgrade existing production lines and hire an additional 260 workers. Toyota already employs close to 3,000 workers at its two plants in Poland. To date, Toyota's investments in Poland have amounted to €600m.

Toyota Motor Manufacturing Poland (TMMP), producing engines and transmissions, will thus increase its capacity to 720,000 transmission units by mid-2009 from the current 600,000.

New bridge between Estonia and Russia

Estonia and Russia’s transport minister have signed a long-awaited cooperation protocol for the construction of a new bridge spanning the Narva River. If built, the much-needed bridge will ease border crossings at the Narva-Ivangorod junction and facilitate improved trade between the two countries.

Construction of the bridge and enlargement of the border checkpoint will cost approximately €64m. A timetable will be hammered out by a working group made up of representatives from both countries. The construction of the bridge would be financed by Estonia, Russia and the EU.

The exact location of the bridge has not yet been agreed. The Russian side is suggesting a southern location, while the Estonians wanted the bridge to be built further to the north. A decision on location is expected to be made before the end of the year.

The existing Soviet-era bridge in Narva is no longer able to handle the increasing traffic, with transit vehicles causing noise pollution, vibration and congestion in the city centre. When the present checkpoint between Narva and Russia’s Ivangorod was built, its projected capacity was 100 trucks a day; now approximately 400 trucks pass through the checkpoint daily, and trucks have to wait two days to cross the border.

In 2005 the number of cars crossing the border there increased by 30% and the number of trucks 40% in comparison with 2004, with the number of trucks reaching 90,000. It is estimated that the total number of vehicles crossing the border will grow to 300,000 per year by 2010.

The Tallinn-St. Petersburg road link is one of the most intensively used transport connections between the EU and Russia. Also, the two ministers signed a preliminary agreement on concluding a bilateral railway treaty.

Umm Al Quwain permits foreign ownership

mm Al Quwain, one of the smaller member-states of the United Arab Emirates, has passed legislation allowing foreigners to own freehold property, by issuing Law no. 3.

Property investment market in Bahrain is 'booming'

The Lagoon Bahrain, a waterside commercial project at the heart of Amwaj Islands off the coast of Muharraq, which will be complete in about 16 months, could help further boost the property investment market in Bahrain, according to Abu Dhabi Investment House (ADIH).

Nicholas Fraser of ADIH said: "We are working closely with the local authorities to ensure the on-time delivery of various services and provision of necessary amenities in line with the scheduled construction date.

“In brief, The Lagoon is set to become a catalyst for the Kingdom’s forward growth objectives, and will boost economic development by encouraging international investors to enter the market. We are finalising deals with global names to bring more international brands into the market via The Lagoon.”

Rashad Janahi.also of ADIH adds: “The Kingdom's real estate sector is booming and major development projects have stirred local, regional and international investments.

Foreign restrictions will affect China's property market

China 's new policy on restricting overseas investment in the country's property sector is likely to slow property price inflation and put off some major investors, according to one Chinese property expert.

Feng Hongrui, general manager of Midland Realty, China ( Shanghai), commented that high-end properties located in Xuhui, Jing'an, Huangpu, Luwan, Changning and Pudong 'have long been favored by the foreign investors due to their excellent quality and advantageous locations.'