Charles Boudet, Managing Director of Jones Lang LaSalle, Russia & CIS, had this to offer:

“We are very pleased to announce the creation of a new strategically important role in Jones Lang LaSalle. The Head of Advisory Group role is vital and critically important for us in the real estate sector which sees a substantial amount of cross-functional business generated out of advising our clients at a very early stage of their development and investment value chain. It is a unique opportunity for Jones Lang LaSalle to have a person of this professional stature joining us to lead this new division. As always our constant leadership and professional ethics allows us to remain ahead in this very competitive market and attract the best talents.”

Millard, an associate Member of the Royal Institution of Chartered Surveyors and a founding member of RICS Russia, holds a degree in Land Economics from Fitzwilliam College, Cambridge University. He also took an MBA at Business School Lausanne where he specialized in Corporate Finance.

Photo credit: Tim Millard courtesy Cushman & Wakefield

“The strong end to the year illustrates that investors remain attracted to real estate opportunities, especially in the UK, Germany, France and Sweden. Interestingly, there was also a marginal increase in activity in markets such as Ireland and Spain during Q4 2012 which signals increased momentum for 2013. While much has been made about the increasingly globalisation of capital flows, the strength of the domestic market should not be overlooked. German, French and UK investors were the largest gross investors in Europe over the last year,” said Richard Bloxam, Head of European Capital Markets at Jones Lang LaSalle. 

The research further determined that there were eight cross-border deals of over €500m in Q4 2012 in Europe, and three such large deals in Paris. European retail investment volumes (excluding high street) were €19.4 billion below their 2011 level – €31.3 billion, result caused mainly by the lack of product on the market.

“The office sector had a stellar year in 2012, with activity increasing 24% year-on-year; almost 60% of office activity in 2012 was within London, Paris and the German Big 5 cities. This has helped consolidate London and Paris as two of the top 10 traded cities globally, with London holding onto top spot in 2012. Despite on-going demand for good quality shopping centres as evidenced by several large deals in Q4, retail investment volumes over the full year 2012 were down year on year due to a limited supply of appropriate product,” Bloxam added

Major international investors access product by partnering their equity with expertise, a good example being NBIM’s acquisition of a 50% stake in Meadowhall and CPPIB*’s joint venture with CityCon, a leading retail specialist in the Nordics

“In 2012 we recorded a 36% increase in net investment into Europe by investors based outside of the region compared to 2011. The largest growth originated from Asia, where purchases into Europe grew by a staggering 80% year on year,” explained Matthew Richards, Head of International Capital Group Europe. “We expect Asian offshore buyers to be many of the dominant sources of new capital this year and beyond as domestic regulations now allow investment outside of their domestic real estate market.”

The greatest real estate deal involving a single property was seen by Switzerland, the purchase of Credit Suisse’s Uetlihof office complex in Zurich by NBIM for CHF 1 billion (€828 million, USD 1.07 billion). Another notable deal of 2012 was ITFP’s sale of the Statoil Regional HQ in Oslo for circa €430 million to a syndicate of investors arranged by Arctic Securities, a Norwegian investment bank.

“We are forecasting global volumes could reach US$500bn in 2013 from US$443 in 2012, due to increased levels of demand for real estate coupled with a strategic reallocation towards this asset class by institutional investors. The Europe, Middle East and Africa region is expected to maintain similar volumes in 2013 to those achieved in 2012,” Richards added.

Positive outlook for UAE real estate. Image courtesy of Visit Abu Dhabi va Flickr.com

Gulf Business reports that the starkest gains have been made in Dubai, where real estate transactions increased by 65% over the last year, says JLL’s Alan Robertson. Much of this success can be put down to Dubai’s strong economic ties with the relatively healthy economies of China in particular, and South Korea, Australia and sub Saharan Africa. This upward trend is expected to continue, and so Dubai’s real estate sector will likely see further growth during the next 12 months, concludes the report.

Things aren’t quite so rosy in Abu Dhabi, with JLL estimating the city to be around 18 to 24 months behind Dubai in terms of recovery. The report says that the situation isn’t expected to improve substantially through 2013, although the city is at least laying the foundations for a full recovery, expected to commence in 2014.

Dubai’s resurgence:

Dubai has witnessed a significant increase in market confidence over the last year, something that JLL puts down to its steady economic growth, rising employment levels and its ‘safe haven’ status. Several major new real estate developments are being planned in the city, and now the government is even taking steps to prevent another ‘bubble’ by instituting mortgage caps on lenders.

Increased foreign investment:

China and South Korea are likely to step up their investments in the region as a result of growing business ties. In particular, Chines investors have been heavily involved with Dubai’s retail sector, and JLL predicts that hotel and tourism could well be next. In addition, JLL points to growing interest among petro-dollar rich oil-producing nations such as Nigeria and Angola.

Growing real estate inventories:

Good news for buyers and tenants, who will have plenty of choice when it comes to buying or renting property in the UAE this year. Several ongoing developments are expected to be completed sometime during 2012, adding further supply to the UAE’s housing inventory. However, JLL warns that there is a risk that this could offset improving market sentiments.

Funding constraints:

One positive factor that will help to limit the pace of development will be the limited availability of funding. Gulf Business notes that bank lending, off plan sales and IPO’s have already been challenged, and says that caps on LTV ratios will act as a further deterrent. However, this lack of domestic financing will be offset by an influx of cash from overseas investors and private funds.

Sustainable building:

Abu Dhabi is likely to take the lead in the development of ‘green’ buildings due to its Masdar and Estidama regulations. However, this will likely remain small-scale as owners worried about financial viability remain reluctant to accept green leases.

Dubai at night – courtesy Kamel Lebtahi

Overlook – courtesy Battersea Power Station Development Company (“BPSDC”)

The news tell of what will be the last riverside development in the city, an enormous project now selling the first phase known as Circus West. Agents will now be selling units to the Singapore and Hong Kong markets, according the news from Jones Lang LaSalle.

Residential and Development Director for the firm, Peter Murray, had this to say about the appointment of his company:

“We are thrilled to be associated with such a high profile and exciting iconic development and anticipate the development to be received with enormous success.”

The development will contain one, two, and three bedroom apartments, as well as; offices, shops, leisure and hospitality venues, not to mention some exclusive penthouses. The property’s design firm, Ian Simpson Architects and de Ryke Marsh Morgan (dRMM), have created smart architectural lines and function that will go from £338,000 for the studio apartments and range all the way up to £894,000 for a three bedroom apartments. The units are expected to be occupied some time in 2016. The image below shows a nice conceptualization of a part of the development.

The first phase of the project, eight core buildings to the West of the 39 acre site, will be complete sometime this year. The opening of these is slated to come along at the same time Europe’s largest brick building, Grade II listed Power Station’s renovation is complete. For those who do not know, this is the largest surviving example of Art Deco architecture in the world.

Extending the neighborhoods of Kensington and Chelsea, this vast and exclusive new neighborhood really transforms an industrial age unsustainable relic into homes and a community for the future. For those who talk about renewed developments, clearly this engaging new plan is a step above. With its own stage one station connecting Heathrow and Gatwick, boutique shopping galore, and a myriad outdoor and indoor entertainment array, it’s no wonder International sales teams were formed.

Those interested should visit the various websites mentioned, or connect via Twitter @Battersea_ICON with the developers.

The video below shows the vision.

Brett Miller

Jones Lang LaSalle has just announced the appointment of Brett Miller as the new president of its Canada operations. Miller, who is based in Toronto, will be responsible for overseeing and growing business throughout Canada from 14th May onwards.

Miller is joining Jones Lang LaSalle from CBRE, where as Regional Managing Director he ran the Eastern Canada division for more than a decade. As well as overseeing five offices, Brett launched several business lines and led major transactions. Before this he ran the business division of News International Newspapers in London. Miller has a bachelor of commerce degree in real estate from McGill University, and an MBA from INSEAD, Fontainebleau in France.

Bill Krouch, CEO of Americas Markets at Jones Lang LaSalle said:

“Over the last two years, we have strengthened our business in Canada with new office openings, significant brokerage assignments and the addition of more than 40 industry professionals. To ensure our continued momentum in this important market, we required an individual with deep knowledge of multiple business lines, proven leadership skills and a track record of building profitable businesses. Brett brings these qualities, as well as an entrepreneurial spirit to the role.”

Jones Lang LaSalle headquarters are in Toronto, and the company has operated in Canada for more than a decade. It offers tenant and landlord representation, project and development services, mobile engineering services, and investment sales, as well as corporate retail solutions and integrated facilities management services to owners and tenants in Canada.

Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations throughout the world, including 200 corporate offices. Its portfolio encompasses around 2.1 billion square feet worldwide.

IndiaProperty.com wants to cement its place as the number one online portal for new homes in India © maigi - Fotolia.com

It is increasing its focus on Tier II cities and is launching a separate segment listing properties in these areas. IndiaProperty.com has launched new pages on its portals listing over 800 new properties and 50 new projects across Tier II cities including Jaipur, Mysore, Nasik, Gurgaon, Vijawada, Trichy and Coimbatore. Since April this year the site has seen a 100% increase in traffic, and has over 3,000 new properties and 450 new projects listed throughout India. The site has crossed the 2 million mark in registered users, and receives around 150,000 unique daily visitors, with more than 2 million page views a day. These figures firmly establish it as the number one property portal and India. IndiaProperty.com is intending to increase its customer base, and plans to have 5 million registered users by March next year.

In addition the company is planning to embark on a number of marketing initiatives and has just announced its first property show, Chennai-Grahapravesham 2011 which will take place between November 4th and 6th at the Chennai trade centre, and is being organized in collaboration with Jones Lang LaSalle. The show will feature leading builders such as Embassy, TVH, Unitech, Arun Excello and Hirco, and will showcase ongoing and upcoming residential projects ranging from studio apartments to villas. The three-day show will also feature panel discussions where industry experts and senior professionals will debate a range of topics, which will hopefully address most questions asked by property buyers today.

Ganesh Vasudevan, Vice President and Business Head of IndiaProperty.com said “We have increased focus on new properties and further expanded our reach into Tier II cities seeing the healthy growth in new projects launched in these markets. We are the only real estate portal in India to specifically address the new property markets in Tier II cities. Grahapravesham will provide a one-stop solution for property buyers as it connects buyers and developers at an opportune time when pricing is right and interest rates are looking likely to have maxed out.”

Mr. Sivaramakrishnan A.S. Associate Director-Residential Services, Jones Lang LaSalle said, “We at JLL are excited to co-host this event along with India Property. This unique event in partnership with India Property, will provide an excellent platform for homebuyers to gain unbiased advice on property related issues.”

Dubai's International City project © frawa - Fotolia.com

International City is a project aimed at low and middle income groups, and rents are already under pressure at around AED 15,000 a year for a studio apartment. According to real estate experts the addition of more units across the market will enable occupiers to move to better specified homes at the end of their rental lease, often at very little or even no extra cost. There have been frequent complaints about the standard of infrastructure at International City and the close proximity of a sewage processing plant.

Local real estate agents have warned that if rental values decline any further it wouldn’t be worth an investor purchasing property in the development, and landlords would need to offer incentives such as rent free periods in order to attract tenants. There is also the worry that Nakheel could lease the flats directly to tenants, undercutting landlords and causing rents to drop even further. Earlier this year the developer offered rent-free periods at both this development and its Discovery Gardens in an effort to attract tenants, and experts think rents could drop by another 10% to 15%.

Nakheel has been one of the hardest hit property developers. In August it split from its parent firm, Dubai World to become state backed, and in September wrote down $21.4 billion from its real estate values, and the company is now concentrating on completing existing projects having already handed over more than 1,180 homes across the emirate in the last year and a half.

Elsewhere in Dubai things aren’t quite so bad, as Jones Lang LaSalle found the property market had begun to show small signs of recovering as prices of prime property and the number of transactions increased in September.

Dubai real estate bouncing back? © Beboy - Fotolia.com

The article in ArabianBusiness.com cited a report by property broker Cluttons, which found real estate in desirable areas has held its value, or seen prices increase. The first quarter of the year was affected by unrest throughout the region and overseas, but now it does look as if the first green shoots of recovery can be seen. However the report went on to warn that property price rises have not been seen in all sectors, as apartments and property in less desirable areas are continuing to be affected by oversupply, and there are another 10,000 to 15,000 new units expected to be finished by the end of the year.

This isn’t the first report to see signs of improvement in the prime property market, as Jones Lang LaSalle recently said prices were near rock bottom and that even though villa sales volume has dropped by nearly a third, the value of villa sales has increased by 59%, showing higher-priced properties are proving to be the most attractive to buyers. Experts think developments with finished community facilities are most likely to reap the benefits of a rejuvenated real estate market as they are seen as offering value for money. Projects between Sheikh Zayed Road and the Dubai Marina, where tenants have access to community facilities due to completed infrastructure, are seeing prices stabilize.

Since the global economic crisis property prices in the emirate have decreased by more than 60%, and nearly half of the projects have been cancelled or put on hold as developers struggle to repay bank loans and contractors.

MENA countries badly need affordable housing © mev1973 - Fotolia.com

The most populated country in this region is Egypt, and Jones Lang LaSalle estimates the shortfall there could be as high as 1.5 million homes. Morocco is estimated to need around 600,000 homes, while Iraq needs around 1 million housing units. This problem isn’t just confined to less wealthy countries, as even Saudi Arabia needs 400,000 more affordable homes.

The report in Kuwait Times highlights the fact that lack of affordable housing was one of the reasons for the turmoil which has affected the region this year. The problem is that although many of these countries have seen their GDP expand impressively over the last few years, most of the wealth has gone to those who are already rich, while lower earners have seen their pay stagnate, and there have also been insufficient new jobs created. With much of the wealth being confined to the top earners, most of the developers have concentrated on building luxury homes.

Many in this region are still relatively poor, but the population is expanding rapidly, increasing the need for new, affordable homes. Most of the new homes already built are beyond the reach of people on average incomes, and those who can afford to pay a mortgage are finding difficulty in obtaining finance. Property prices in Algeria cost around 30 times the average annual salary, while in Egypt this figure is 18.4 times. To put this into perspective, the average US home is only 2.8 times the average annual salary.

Saudi Arabia’s government has already set aside around $130 billion, which is about 30% of its annual economic output, to be spent on social projects including homes. The interim government in Egypt has ordered the housing ministry to oversee the construction of 1 million affordable units by 2015, but this target may prove a little optimistic as it would mean finishing 550 homes each day.

Commercial space under a sole owner is becoming hard to find in Dubai. Image courtesy of Gulf News

The majority of properties constructed over the next couple of years are held under strata title, which enables different investors to own one or more floors, and this makes it difficult for companies requiring large numbers of floors to find adequate space which isn’t controlled by multiple landlords.

An example is Standard Chartered plc, which spent two years trying to find adequate space in Dubai. Eventually, the third largest UK bank elected to build its own tower, and will occupy eight out of the 13 floors. Standards Chartered reached an agreement with the Gulf Resources Development and Investment LLC to build the new tower near the Burj Khalifa, which is the world’s tallest building, and will invest a total of around $140 million.

Standard Chartered's new offices in Dubai will be beside the Burj Khalifa. Image courtesy of Breaking Travel News

During the property boom, developers often sold apartments and office buildings off plan to investors, who frequently resold them for a quick profit. Many of these investors were inexperienced at dealing with commercial tenants or managing buildings, and hadn’t considered the long-term consequences of finding tenants.

Corporate occupiers are looking for a well manage building which can be adapted to give them a customized space, and are far more likely to find this where there is just a single landlord.