Saturday, January 27, 2007

National magazines predict major decline for Las Vegas housing

BusinessWeek analysts predict Las Vegas housing will lose the most of any major city in 2007 with 9.9 percent of its value disappearing, much more than the nationally projected loss of 1.7 percent. According to BusinessWeek, which interviewed economists and leading real estate firms, the median home price will fall from $324,000 to $292,000.
The magazine's analysts went on to say that a decline in home sales in 2007 will set the stage for another year of price decreases in 2008 across the country.
Fortune ranks Las Vegas behind Stockton, Calif., on its list of markets facing a decline. The magazine predicts prices will drop 6.6 percent in 2007 and another 8.1 percent in 2008 based on comments from analysts at Moody's Economy.com and real estate valuation company Fiserv Lending Solutions.
The National Association of Realtors, meanwhile, predicts that existing-home sales for the nation as a whole will rise gradually through 2007 and into 2008, while new home sales should turn around by summer. NAR Chief Economist David Lereah said existing home sales won't change much from 2006 to 2007.
He projects 1.51 million housing starts in 2007, the lowest in a decade as builders pull back on new construction to support prices of remaining inventory." read more

Tuesday, January 23, 2007

Philippines: The foreign retirees expected to infuse about $840 billion into the local economy

"The local real estate market is the fastest growing segment of the economy. The country will host on Dec. 6 to 10 the "First Asian International Real Estate Expo and Conference" that will bring the global second-home market and industry to Manila. The country said it targeted 859,000 foreign retirees to choose the Philippines as their second home over the next 10 years. The foreign retirees are expected to infuse about $840 billion into the local economy and generate four million jobs in the ten-year period.
The local real estate market, the fastest growing segment of the economy, is expected to receive further boost from the country's campaign to lure foreign buyers of vacation houses and condominium units this year. The country, will host on Dec. 6 to 10 the "First Asian International Real Estate Expo and Conference" that will bring the global second-home market and industry to Manila. The 1.3-million-strong National Association of Realtors in the United States has supported the expo in the Philippines. A number of foreigners had invested in real estate properties in the Philippines because of the country's affordable properties, low cost of living, nice tropical climate, and friendly English-speaking population. The number of the highly successful 42-to-60-year-olds reportedly runs to almost a hundred million in the US, Europe, Asia and Canada. Earlier, the Philippine Retirement Authority said it targeted 859,000 foreign retirees to choose the country as their second home over the next 10 years. The foreign retirees are expected to infuse about $840 billion into the local economy and generate four million jobs in the ten-year period. " read more
Manila Standard, 01/12/07, "Property firms woo foreign retirees"

Brazil Investment Boom

SAO PAULO — From the middle-class residential market to the A-class office space segment, the real estate sector is going through a period of intense business activity that has not been seen for a long time. The lasting decline in domestic interest rates coupled with low inflation and high liquidity in the international capital markets have led investors to take a closer look at the giant Latin American market.
Those who had injected a large amount of cash in Mexico in the beginning of the decade are now keen on seeing Brazil as their next big move.
“It’s really like a tsunami coming," says Paul Weeks, head of capital markets at Cushman & Wakefield in São Paulo. "For years and years, we have been waiting for foreign investors. In the past six months, they have been coming like in a tidal wave. There is so much money coming in this country.”
SAM ZELL BUYS
Take Sam Zell. The U.S. billionaire has recently gone on the shopping spree after selling Equity International at home. In a few bold moves, he has already won back its initial bid, such as in the transaction with Gafisa, a high-profile building company in São Paulo. Only months after he bought a 32 percent stake for $55 million, he reduced it to 27.7 percent and got his money back. He then acquired a 14 percent stake in Ecisa, the owner of seven shopping malls in the country, which he later increased to 55 percent in partnership with GP Investimentos, a local private equity fund. Last June, he launched his most ambitious move with Bracor, a joint venture with a local investor, Carlos Betancourt. Bracor initially planned to invest $200 million in industrial and commercial buildings, but it already intends to spend another $120 million within two years.
Investors who have had a taste of the Latin American potential in Mexico are now increasingly turning their attention to Brazil, as the economic fundamentals look sound enough. ”Sam Zell is a bit like Bill Gates," Weeks says. "When he goes into the market, people usually follow him like sheep." Credit Suisse, Lehman Brothers, Bear Sterns, Merrill Lynch are all ready to step in, he adds.
MORGAN STANLEY FUND
And Morgan Stanley Real Estate has just launched a $200 million fund focusing mainly on the residential segment. Foreign investors were also responsible for 75 percent of the funds that were raised as part of last year’s eight IPOs in the sector, including Gafisa, GP Investimentos, and São Carlos Empreendimentos e Participações.
Significantly, GP announced the launch of a new company, BR Properties, on January 2nd, in partnership with Banco Safra and foreign investors (Lehman Brothers Real Estate Partners, Sandell Asset Management, Tudor Group, Talisman Fund and The Peter Malkin Family and Belfer Management). The company, which is to focus on commercial office space, has an initial capital of $25 million that is due to be increased to $100 million at an unspecified date.
Meanwhile, São Carlos has already been responsible for one of the largest transactions in the commercial market. The company, which was launched by Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles - the owners of the popular retailer Lojas Americanas - acquired almost half of the Eldorado Business Tower, a 32-story state-of-the-art building being built in São Paulo.
Foreign investors will increasingly seek to control entire buildings, according to market analysts. With a 14 percent vacancy rate in São Paulo, the main office market in the country has now recovered from the crisis of the past five years (in 2005, the vacancy rate hit 20 percent) and is now ready for take-off. Prices of A-class office space are still only at the level they were in 2000, but they should keep on increasing as the vacancy rate is expected to fall again this year.

From Latin Business Chronicle