Bulgaria to get 500,000sqm of office space by 2012

Lithuania forecasted to be top European hot spot in 2007

Capital gains to be reduced in Bulgaria

Supply shortfall of 30% for Dubai office space

St Petersburg tourism market to grow by over 40% by 2010

Australian firm to build €1bn casino in Macau

Housing decline sparks a construction slowdown

Industrial property buoyant 

Bulgaria to get 500,000sqm of office space by 2012

Some 500,000sqm of new office space is expected to be offered on the market in Bulgaria over the next six years, according to forecasts by Forton International. Most of the space will be included in a dozen large projects, which will be finalised in 2008-12. In the medium-term, this ample supply of office space is expected to result in a slight decrease in rents of around 10%.

At present, however, there is a shortage of quality office space, Forton CEO Valeri Valchev said. Therefore returns will remain high over the next couple of years. Currently they range between 9 and 11% a year. The same opinion is shared by Colliers International. According to the consulting company, in the medium term annual demand in Bulgaria will be for around 50,000sqm of new office space. At the same time some 286,000sqm of projects are currently under construction and due to be completed in the next three to five years. Therefore the increase in the volume of space will not be felt this or next year.

Lithuania forecasted to be top European hot spot in 2007

A new report by property agents Knight Frank, predicts that Lithuania will enjoy the highest capital growth in its residential property market in 2007, with capital gains of 20%.

Fellow Baltic state Latvia came joint-second in the report with Slovenia. Both these countries are set for price gains of 17.5% next year.

Capital gains to be reduced in Bulgaria

The rate of capital gains tax charged in Bulgaria is set to fall from 15 to 10%, according to Rossen Dimov of Rockarch Estates.

Dimov told PIN: "More Bulgarian property owners should start declaring tax as a result of this reduction in capital gains tax, which should also help to attract more foreign property investors."

Supply shortfall of 30% for Dubai office space

Rising rents for office and retail space in Dubai is set to continue in 2007 and 2008 according to property management company Asteco. A shortfall of supply by at least 30% will put upward pressure on commercial rents in Dubai as well as in other parts of the UAE.

With an average return on investment in Dubai commercial property of more than 16% expected for 2006 and 2007, it is expected to return twice as much as residential property, which should average 6-8% over the same period.

Since 2002, office rents in Dubai have more than doubled. This is due to the continued expansion of existing companies as well as new companies rushing into Dubai to set up new businesses. Over 40% of today’s tenants in Dubai are believed to be either searching for more office space or to upgrade their existing offices.

St Petersburg tourism market to grow by over 40% by 2010

There has been a rise in the number of visitors flocking to Russia’s second largest city, St Petersburg. Last year saw 3.5m foreign visitors representing a 13% increase on 2004. In the next 5 years the quality hotel room stock is expected to increase by over 40% to cater for the demand from foreign and domestic travellers, according to research from Boston Consulting Group.

“ St Petersburg, the northern capital is ranked the third Russian market, after Moscow and the Lipetsk Region in terms of development levels and foreign investment per capita. Tourism represents an approximate 15% share of the Gross Regional Product ahead of cities like London, where it is 10% and New York (5 %)”, said Mark Wynne-Smith, European CEO at Jones Lang LaSalle Hotels.

“Predominantly a tourist destination, St Petersburg plays host to a number of cruise liners but will also seek to attract business clients from the large corporate firms that plan to relocate to the region. The city administration aims to improve St Petersburg’s profile and attract around 5 million foreign visitors by 2010.” He continued: “Currently the main international visitors come from Finland, the US, Germany, France and Italy. Their average length of stay is 3.5 days.”

Average room rates for quality hotels in St Petersburg have reached $270 per night in the first half of 2006, not far behind Moscow’s $290 average.

Australian firm to build €1bn casino in Macau

A consortium based around subsidiaries of Australian HOCHTIEF Group, Leighton Holdings Ltd, has signed a letter of intent to build a casino called ‘City of Dreams’ in Macau, China. The work, which has already begun, is being executed by a joint venture comprising Leighton Asia, the John Holland Group and China State Construction Engineering. The project is expected to cost €1bn and be completed for Melco PBL Entertainment by December 2008.

The ‘City of Dreams’ represents another milestone on the way to creating what some are calling the ‘ Las Vegas of the East’ in Macau. The casino complex will consist of four, luxury high-rise hotels, with between 28 and 35 floors and casino rooms, an apartment building, upmarket retail outlets and international restaurants.

Leighton Asia and China State recently completed the construction of another casino in Macau for Wynn Resorts.

Housing decline sparks a construction slowdown

Construction levels in the US are set to fall on the back of the nation's declining housing market.

A report released by McGraw-Hill Construction reveals that overall construction spending in 2007 will fall for the first time since 1991. The company says the value of new construction will decline 1% in 2007 to $668bn, compared with an expected rise of 1% for 2006 and a 12% increase in 2005.

McGraw-Hill reports that the anticipated decline was due mostly to a 5% fall in construction of single-family homes. But the overall drop also reflects a 3% slide in construction of stores and shopping centres.

Industrial property buoyant 

The strong capital gains and rental growth recorded in South Africa's industrial property market in 2006, is set to continue going in to 2007, on the back of a weakening rand.

Rael Levitt, chief executive of the Alliance Group, said: “Compared with offices and retail, industrial is by the far most buoyant nationwide.

“Because the rand is weakening it is fuelling exports in the manufacturing sector, which in turn is causing demand for industrial space from industrial users looking to expand, as well as new entrants into the market.”