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Spain’s residential real estate market may still be in the doldrums but the country’s commercial property sector is moving forward.

Madrid office take up in the second quarter of the year rose threefold to 160,000 square meters compared to, according to international real estate advisor Savills. Its latest report also shows that take up in the first half of the year is double the total for the first six months of last year.

The data shows that of the deals completed in the second quarter three ‘mega’ deals of over 10,000 square meters took place involving tenants Spanish Airports and Air Navigation (AENA), Alcatel and AMPER. Of particular note, outside the popular city centre, the east area of the city saw 17% of transactions with significant lettings between 6,000 square meters and 9,000 square meters. Meanwhile a rise in owner occupier sales appeared to be on the increase with over 10% deals closed.

In terms of investment, Savills reports first half of the year volumes are 7% higher than the same period in 2009 with hot demand for prime office assets such as Paseo de Recoletas 3 and 56% transactions focused within the M-30. The average investment volume rose from €15 million in the first three months of 2010 to €34 million in the second quarter.

‘One of the most significant investment deals lately, Paseo de Recoletas 3, has set a new record for the length of negotiation period at two months. It has also exceeded the previous records for yield and price per square meter set in recent years. The number of buyers reflects the demand for this type of asset in the market,’ said Luis Espadas, capital markets Director.

Savills finds that despite the steady growth in the investment markets, rents are not yet rising in fact in the CBD they remain at the same levels as the first quarter of 2010 showing averages of €28 per square meter per and €29 per square meter per month but outside this area rents continue to fall. Year on year rental falls in the submarkets range from -11% to -20%.

The report also shows that average vacancy rates outside the CBD now stand at 12% but in CBD they have fallen to 7% from 11% in the first quarter of the year. In the second quarter CBD registered 10% of take up due to a letting to Banca Civica for 7,000 square meters and this has allowed CBD vacancy level to revert back to its characteristically lower rate than average vacancy for the city.

‘We anticipate that national investors will continue to focus on Madrid’s CBD for the second half of the year as with its vacancy rates below market average, it will continue to be the safe haven,’ added Espadas.

A new winter train service between London and the French Alps is set to boost the region as a property investment prospect, it is claimed.

The new winter service starting on December 19th 2010 will allow passengers to travel direct from St Pancras and Ashford International to Moutiers, Aime-La-Plagne and Bourg St Maurice in the heart of the Alps. The journey will take seven hours, passing through stunning scenery with returns fares costing around £149 per person return.

‘The French Alps have and always will offer the finest skiing in Europe in my opinion. Ski property with quick and easy access from the UK is in particularly high demand and the news that you can go from London to the Alps in seven hours spells good news for owners. I fully expect demand and subsequently property values to rise,’ said Charlie Williams, French property expert at Experience International and passionate Alpine skier.

There has been a marked increased in the number of people choosing to visit France by train as opposed to flying with Eurostar reporting a 6% rise in passenger numbers during the first half of 2010. Environmental concerns combined with the impact of the volcanic ash cloud earlier this year and the rising trend of travellers choosing rail travel over short haul flights is believed to have accelerated this growth.

One resort tipped by Williams as a hotspot for the 2010/2011 ski season is Sainte-Foy-en-Tarentaise. Located just 15 minutes from the train station at Bourg St Maurice and 15 minutes from both Les Arcs and Val d’Isere, he describes it as an unspoiled resort that has long been the preserve of experienced guides bringing their clients over from nearby Val d’Isere to enjoy the famous powder and off piste skiing available.

‘Thanks to some sensitive re-development this Savoyard town has been reborn as a luxuriously quiet retreat for families and groups alike. Prices increased by 7.5% over 2009 and in response to demand for quality accommodation a prestigious developer has released La Chapelle, a ski-in ski-out development with many facilities and outstanding views on the leaseback system with 100% finance,’ he explained.

With a freehold leaseback property, owners can enjoy guaranteed index linked returns for 18 years as well as personal usage including an extra four months during the summer. The first phase is almost sold out but prices for the soon to be released second phase of four one to four bedroom luxury properties start from £185,000 with furniture, ski locker, storage and underground parking included.

Residential property prices in major Australian cities have increased by almost 20% in the last 12 months, according to the latest figures to be released.
The data from the Australian Bureau of Statistics shows average quarterly growth to June of 3.1% and an annual increase of 18.4%.

The data shows growth of almost double that of the private sector RP Data/Rismark index released last week which showed national city dwelling values up 10.5% in the same period.

In Melbourne house prices increased more than 24% in the last year while in Sydney they rose 21%, according to the ABC figures. Canberra saw a 19.6% price increase, Darwin 14.6%, Perth 13%, Adelaide 11.l6%, Hobart 10.8% and Brisbane 8.5%.

The data reveals that the rate of growth in capital cities peaked at 5.5% in the December quarter last year, after rising from negative territory during the economic downturn, and is now steadily falling.

In the second quarter of the year prices increases slowed considerably. In Sydney they increased by 4.9%, by 3.6% in Melbourne and by 3.2% in Adelaide.  Darwin saw a 2.8% increase, Canberra was up 2.1%, Perth 0.4%, Brisbane 0.3% and Hobart 0.1%.

Last week’s RP Data index showed average house prices had fallen slightly after 17 months of consecutive gains, as economists agreed the market was at a turning point. In a note ANZ economists said while growth was expected to slow further this year, prices would be supported by the underlying housing shortage and a buoyant outlook for the Australian economy.

It comes as analysts warn that Australia is facing a housing crisis and that the national shortfall of 190,000 dwellings will widen to 466,000 by 2020, amid expectations of a rapidly growing population.

Developers claim that a shortage of land and a lengthy planning process is hampering construction. HIA chief economist Harvey Dale said it takes an average of seven to eight years for a greenfield site to reach completion, an unnecessarily long period that pushes up costs and reduces supply.

‘At the end of the day, the lack of adequate, affordable land supply is at the heart of the problem. The number of processes a development must go through is higher now than was the case 10 years ago. We are regressing rather than progressing in terms of the bureaucracy involved in building a new home,’ he said.

Demand from Russian buyers is pushing up the price of prime property in central London, according to a new report. Prices increased by 1.4% in May, the 14th consecutive monthly rise and are now 23% higher than they were at their lowest point in March last year, the latest Central London Residential Index from Knight Frank shows. But prices are still 6.4% below the market peak of March 2008 market peak

The report shows that price growth in Chelsea, Kensington, Notting Hill and Knightsbridge has led the market over the past 12 months, but now Mayfair, Kensington and Knightsbridge are rising strongly with price growth of 14% across these locations over the last six months.

The research also shows that it is overseas buyers who are leading the market with the number of buyers from Russia having jumped by 112% in the last two months.

‘The London residential market is continuing to lead the wider UK market. The weak pound is having the effect of pulling in demand from overseas buyers, who view London as offering good value, with prices still 34% lower in dollar terms from the 2008 peak,’ said Liam Bailey, head of residential research at Knight Frank.

‘Russian buyers have become very noticeable over the past two months and have bucked the trend set by domestic buyers who became less committed in the run up to the election. Russians and most other nationalities buying in London are fairly unaffected by political upheaval and have remained by far the most confident and proactive buyers in the market,’ he explained.

He said there is no doubt that the current global financial market upheaval has unsettled buyers and sellers and proposed changes to capital gains tax have also unsettled some sellers in particular, and there has been a sharp uplift in prospective vendors looking to test the market. ‘Our data reveals a growth of 64% in requests for pre-sale advice and valuations, however this is not yet turning into hard instructions to sell,’ Bailey revealed.

But there is growing evidence in the wider UK market that residential sales volumes and even prices are coming under pressure. ‘London will not escape this entirely over the next few months however, the impact of strong and resilient demand from overseas will support the market,’ added Bailey.

Recent uncertainty in the Euro Zone has strengthened the Rouble and encouraged buyers, according to Elena Norton, Head of Knight Frank’s Russia & CIS Desk. ‘Buyers from Russia and the CIS states have increased their interest in London’s luxury market on the back of recent events in the Euro zone which has prompted the strengthening of the Rouble against the pound. The ongoing recovery in prime London prices has also created additional interest in London as buyers now believe that the market is likely to continue to strengthen,’ she explained.

‘I can see a clear shift in demand towards single house refurbishments and even larger development opportunities where Russians can be investors or co-developers. Increasingly they are looking to add value over the longer term, which proves that Russian buyers consider London property a safe and attractive investment,’ she added.

Thai property developers are starting to look at overseas markets for new opportunities because of the intense competition in the Thai market, according to international property consultants CB Richard Ellis.
They are looking, in the first instance at nearby markets in Vietnam and Cambodia because of their proximity, level of development and the fact that local competition is not as well developed as the more mature markets such as Malaysia, the consultants say.

‘There are a wide range of opportunities in the Vietnamese and Cambodian markets from city centre office, retail, residential and hotel developments through to the growing resort markets in these countries as well as industrial estate opportunities,’ said James Pitchon, head of research and consulting at CBRE Thailand.

He reckons it will prove a challenge for the developers as rules and regulations governing property development and ownership are different in other countries and the dynamics of each of the property sectors in these countries is also different to Thailand.

‘Accurate information on regulations, supply, demand, pricing, competitors and prospects for each property sector is essential for a Thai developer to succeed in a new market,’ he explained.

CBRE established offices in Vietnam in 2003 and now has over 200 real estate professionals operating out of offices in Ho Chi Minh City, Hanoi and Danang. Its research, consulting and marketing teams have already worked with a large number of overseas developers who have successfully built projects in both the main cities and resort areas.

CBRE established and office in Phnom Penh in 2009 and have been advising clients on the Cambodian market for many years before the office opened. David Simister, chairman of CBRE Thailand, Cambodia and Vietnam advised the Australian Government on the acquisition of a new site for their Phnom Penh Embassy in 2005.

‘There is very little publicly available information on the Vietnamese or Cambodian markets. CBRE sells and leases properties in these countries everyday which is why we have the best market data on actual transactions and future supply. This enables us to provide our clients with the best market data giving them the best knowledge to enable them to succeed,’ said Pitchon.

He believes that there are opportunities for Thai developers to acquire or build properties in both Cambodia and Vietnam but accurate market research will be critical in order to succeed.

Residential real estate values in the US continued to decline in the second quarter of 2010, but conditions vary considerably in different states, the latest property index shows.

The Zillow Home Value Index fell 3.2% year on year and 0.6% from the first quarter to $182,500. The national rate of decline decelerated from the first quarter, marking the second consecutive quarter of slowing declines, and negative equity fell to 21.5%, according to the company’s second quarter report.

Conditions varied among individual markets across the country. In California, where both federal and state tax credits are available to some homebuyers, more than a quarter, 27.8%, of markets tracked by Zillow saw increases in home values in the past year.

Home values in five California markets have increased for the past five quarters and four of those have increased by more than 5% since the second quarter of 2009. The Zillow Home Value Index was up 7.3% year on year in the San Diego metropolitan statistical area (MSA), up 5.9% in the San Francisco MSA, up 5.6% in the San Jose MSA and up 5.5% in the Los Angeles MSA.

But property values in Florida and Arizona continued to show dramatic declines, with home values in the Miami-Fort Lauderdale MSA falling 15.2% year on year and home values in the Phoenix MSA falling 11.8%.

‘As the national housing market limps toward stabilization, individual markets are a mixed bag,’ said Zillow chief economist Stan Humphries. ‘The double tax credits for some California homebuyers have certainly stimulated housing demand there and are partly responsible for the rapid, and likely unsustainable, rates of appreciation in many markets across the state,’ he explained.

‘While there is some uncertainty about how home values will respond in those markets once all incentives are removed, it’s certain they can’t continue at their current rates of appreciation, but is unlikely they will re-test the low points reached in 2009,’ he added.

Markets in other parts of the country, like Miami and Phoenix, are not yet showing signs of reaching a bottom in home values. High supply continues to be a challenge in states like Florida and Arizona, the report says.

‘Nationally, home values are moving in the right direction as rates of decline continue to slow. There is a large unknown on the horizon, however, as these second quarter numbers are still heavily influenced by the federal homebuyer tax credits, which were available for homes under contract by the end of April. Home sales are declining significantly in the post-tax credits environment, but the impact of falling home sales on already declining home values is yet to be seen,’ said Humphries.

‘Recent trends in home values suggest the nation could reach a bottom in the latter half of 2010, but we continue to be cautious about the impact of declining home sales,’ he added.

The report also shows that foreclosures again reached a new peak in June, with more than one out of every 1,000, 0.11%, of US homes being foreclosed during the month. Foreclosure re-sales fell in June, making up 16.9% of all US home sale s during the month, down from a 2010 high of 19.8% in February.

Foreclosure re-sales continued to be high in most markets hit hardest by value declines. For example, they made up 55.8% of June sales in the El Centro, California MSA, 54.6% in the Madera, California MSA and 53.6% in the Mercedes, California MSA. Additionally, more than 26% of home sales nationwide sold for less than what the seller originally paid.

Brazil is seeing a shift from lifestyle property buying to investors seeking a purchase that it likely to rise in value as the country hosts the football world cup in 2014 and the Olympics in 2016, it is claimed.
Once the secret of a select few adventurous holiday home buyers attracted by the year round sunshine, deserted beaches and party atmosphere, Brazil is now topping the list for serious property investors who wish to cash in on the boom, according to Brazil real estate specialists uv10.

Initially our client base was rather lifestyle heavy, but we’re now handling more and more pure investors. They can envision the impact of the 2014 FIFA World Cup and the 2016 Rio Olympics, not to mention the burgeoning middle classes and the recent introduction of mortgages for Brazilians,’ said uv10 sales manager Samantha Gore.

‘We’re here to advise on the best areas to invest in at any given time and right now land values in parts of Brazil are soaring. With available plots starting from 54,705 Brazilian Reais, around £20,000, for a little over 500 square meters they represent excellent value,’ she added.

The Brazilian government is also putting more effort into attracting foreign real estate investors. ADIT, the Association for inward investment in real estate and tourism, has announced that it is widening its influence to cover the 27 states of the whole of Brazil and not just the nine states of the Northeast region.

As a result is name has been changed from ADIT Nordeste to ADIT Brasil and it will also broaden its fields of activity to include residential and commercial property based investments, hospitality, real estate tourism and logistics.

The organisation will also strengthen its presence in the environmental sector, with the aim of creating legal security to advance real estate and tourism developments across the country.

The announcement comes exactly four years after the Government funded Association was founded. It was formed in June 2006 in order to drive forward the Northeast’s tourism and real estate development. Before then, there was no official body representing the interests of these sectors.

ADIT Brasil attracts foreign direct investment in land and real estate projects by introducing the most reputable Brazilian developers, architects, lawyers and related businesses to international investors including hoteliers and resort groups and encouraging the formation of working partnerships.

The association holds an annual conference, exhibition and business networking event called Brasil Invest (formerly known as Nordeste Invest). The event has become a milestone in the industry. Its fifth conference in May 2010 in Natal it attracted more international investors than ever before. Some 120 foreign investors attended and met with Brazilian companies in the real estate and tourism sectors, with parties agreeing an anticipated R$ 1.8 billion of business

The Asia Pacific region is leading the global property market recovery while a slower rate of recovery is predicted for Europe and US markets in face of testing economic conditions, according to a new forecast.

It says that the number of high net worth individuals (HNWIs) is rising fastest in the Far East with Singapore, Malaysia and China all recording growth of 35%, 33% and 31% respectively.

The report also shows that Monaco remains the most expensive area for resale property at €45,000 per square meter while St Jean Cap Ferrat in the South of France coming second at €32,500 per square meter and London coming third at €22,500 per square meter.

Hong Kong, New York and London are the most expensive places in the world for new property at €19,500, €16,750 and €16,500 per square meter respectively.

‘Disparities in the performance of global residential markets remain apparent in the post-recession era. The star performers are in the Asia Pacific region while recovery in Europe and North America is more laboured with transaction volumes remaining well below pre-recession levels,’ said Andrew Hawkins, head of international at Chesteron Humberts.

‘Outside the Asia Pacific region, it is the prime segments which have in most cases recovered first. This reflects the combination of a smaller supply of available properties and the greater purchasing power of HNWIs, who are seeking desirable properties still selling at a discount to pre-recession levels,’ he explained.

‘Appetite for prime residential property both for lifestyle and investment reasons remains firm although buyers are generally taking longer to commit to purchase decisions than in the pre-recession market. Statistics from Primelocation confirm a healthy increase in buyer interest for high-end properties: searches for international property on their website rose by 109% between May 2009 and May 2010,’ he added.

The report points out that prime property is serving its time honoured role as a refuge in times of international upheaval and uncertainty in currency markets this year has motivated some buyers, particularly those in US dollar based currencies, who have benefitted from the strengthening US dollar.

It says that a number of Asian markets have made up most of the ground lost between 2008 and 2009 and in China and Singapore there is still talk of another bubble looming.

But the situation with regard to the prime residential markets is somewhat different. Whereas buyers at the lower end of the market are typically more constrained financially and are consequently unable or unwilling to commit to a second home overseas, any hesitation on the part of the prime buyer is usually more to do with timing or a shortage of available quality stock in preferred locations.

‘This latter factor has partially explained some of the strong price recovery in many iternational prime locations. The desire for lifestyle purchases is as strong as ever and for those with sufficient spare capital to invest or with good access to credit the attractions
of a second home are undiminished. Indeed, several wealth surveys undertaken over the past year point to increased appetite for residential property among the global HNWI community,’ the report adds.

‘Moreover, from an investment perspective it makes sense to have a diversified portfolio which includes property as equities will always be volatile, savings accounts will remain unexciting in a low interest rate environment, while pension prospects continue to diminish with the passage of time. There are still discounts available in many markets,’ it concludes.

Global Real Estate consultant, Cushman & Wakefield in India has been voted as the 3rd Best Company to Work for in Construction & Real Estate Category and has secured an overall 65th position amongst the 427 companies in the India’s Best Companies To Work For 2010 annual survey. This study was conducted by The Economic Times - Great Places To Work Institute India and was based on the employee response provided under the comprehensive employee survey and review of the people’s practices of the participating companies.

Anurag Mathur, Managing Director, Cushman & Wakefield, India said - “C&W’s efforts of inspiring trust and instilling pride among our people has made us one of the best employers in the country. This award recognises our effort and commitment in creating an environment within the workplace that is transparent, promotes camaraderie and provides equal opportunity for growth that makes our organization one of the India’s best companies to work for.”

Some of the other prominent names who won this award this year include Google India Pvt Ltd, Intel Technology India, Marriott Hotels India, American Express, NTPC, NETAPP India, Rallis India Ltd, Bharti Airtel Ltd, Dr. Reddy’s Laboratories Ltd, Indian Oil Corporation, Godrej Properties Ltd, Kotak Mahindra Bank Ltd, Interglobe Enterprises Ltd, Qualcomm India, Whirlpool of India amongst others.