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CONTENTS This month
Contents Features 24 Could new airline technology be the next big leap for international property? 28 The MIPIM awards for innovation showcased some stunning developments 46 As World of Expat launches shows in the UK and US, its owner explains the challenges
ASIAN BUYERS’ MARKET
49 It’s not all about oligarchs! Dispelling some myths about Russian buyers 69 The Asian Buyers’ Market Guide
Regulars 6 News, including where UHNWIs want to live 14 The Big Issue: developers doing (and looking) good with social housing
38 Experts Advise: How can agents get their slice of distressed Spanish real estate?
36 Legal News
62 OPP Proﬁle: at 150 years old, could John Taylor be the oldest international agency?
Data 33 Is Florida running out of houses? 45 Mortgage guide to Ireland 52 Country guide: Greece
Business 23 Training: a great salesperson doesn’t automatically make a good manager 34 John Howell checks out the International Hotel Investment Forum in Berlin 42 Fund managers: beware the AIFMD!
11 Business brieﬁng: rounding up tips, tricks and innovation for your business
The OPP Team
DESIGN & PRODUCTION
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Crisis? What crisis?
The historical echoes might appear ominous, yet to many of us the world has rarely felt safer Editor, OPP Magazine Christopher Nye
Africa, such smugness might seem complacent. Bad things happen even in the most civilised places but rarely, you notice, in places with a booming overseas property industry. It used to be said (until it was disproved several times over) that no two countries each with a McDonalds restaurant ever went to
I like nothing more than to follow a herd and the global herd seems pretty relaxed right now war. To me, the world in 2014 feels pretty safe. We are now a world of expats (see page 46), of business people meeting, exchanging ideas and, at MIPIM at least, drinking champagne together at £26 per glass (see page 28). When Greece virtually went bankrupt, Europe’s people dug deep into their pockets and helped out (see our Greece A Year On proﬁle page 52). The
worst ﬁnancial crisis since 1929 and nowhere did nationalists gain more than a toe-hold. Instead, one country’s investors are helping to clear slums and build decent housing in other countries (see social housing p 14). And the world is likely to get smaller and closer, as transport technology improves and our holiday homes become even easier to reach (page 24). Or am I being complacent? The fact is that in 2014 there is no world policeman any more. There is no balance of power, no answer to a rogue nuclear nation like North Korea, just a lot of powerful nations competing. If the global ﬁnancial crisis showed us anything it is that the world can ﬁnd itself sleepwalking to disaster. In the meantime, in this issue we include an Asian buyers’ guide. You know there’s a lot of money in the Asia Paciﬁc region, but where are the buyers? How do you meet them, advertise to them. Our guide will give you a heads up, and whet your appetite for OPPLive Asia, just a couple of weeks away. Don’t too many of us have too much to lose from conﬂict these days?
n the news this morning we heard that Ukraine is “mobilizing its reservists” following the annexation of its territory by Russia. How very nineteenth century of it. You can almost imagine Angela Merkel rummaging in a Reichstag attic for an old copy of the Schlieﬀen Plan. In Britain right now you can’t turn on the TV without either hearing news from the Crimea or seeing yet another documentary about the centenary of World War One. You don’t need to be a historian to hear the echoes. So why aren’t I worried about the most serious international crisis for decades? Mainly because no-one else appears to be. I like nothing more than to follow a herd and the global herd seems pretty relaxed right now. The markets, so far, are holding steady, the Winter Paralympians have just ﬂown home with big smiles on their faces and I am waiting for an article on the Russian market (see page 49). It might now need some tweaking but I think I can cope with that. Of course, if you’re in Syria, South Sudan, Somalia or Central
The herd appears unruffled by a new global crisis
Top Ten News Stories Our pick of the news this month at OPP Connect UHNWIs. WhereTHEY are they planning take up residence? WHAT Global ARE THE COUNTRIES WOULD BEto MOST LIKELY TO MOVE TO? RUSSIA/CIS
EUROPE NORTH AMERICA
1 GBR 2 CHE
1 USA 2 CHE
3 USA 4 MCO
3 CAR 4 GBR 5 CAN
1 GBR 2 CHE 3 ESP 4 MCO 5 DEU
ASIA 1 USA 2 SGP 3 AUS
AFRICA 1 GBR 2 USA
LATIN AMERICA 1 GBR 2 EPS 3 CHE 4 USA
4 GBR 5 HKG
3 ZAF 4 MCO
1 GBR 2 USA
3 UAE 4 CAN 5 CHE
AUSTRALASIA 1 NZL 2 SGP 3 GBR 4 AUS 5 HKG
1 GBR 2 USA 3 SGP 4 AUS 5 CHE
WHAT ARE THEIR REASONS FOR WANTING TO CHANGE DOMICILE?
QUALITY OF LIFE
AFRICA 34% ASIA 36% AUSTRALASIA 47% EUROPE 34% LATIN AMERICA 21% MIDDLE EAST 30% NORTH AMERICA 41% RUSSIA/CIS 31% GLOBAL 36%
AFRICA 25% ASIA 20% AUSTRALASIA 29% EUROPE 37% LATIN AMERICA 32% MIDDLE EAST 20% NORTH AMERICA 34% RUSSIA/CIS 16% GLOBAL 30%
AFRICA 8% ASIA 12% AUSTRALASIA 2% EUROPE 4% LATIN AMERICA 27% MIDDLE EAST 11% NORTH AMERICA 5% RUSSIA/CIS 16% GLOBAL 8%
AFRICA 10% ASIA 16% AUSTRALASIA 18% EUROPE 17% LATIN AMERICA 4% MIDDLE EAST 11% NORTH AMERICA 12% RUSSIA/CIS 13% GLOBAL 14%
AFRICA 22% ASIA 16% AUSTRALASIA 3% EUROPE 8% LATIN AMERICA 16% MIDDLE EAST 27% NORTH AMERICA 9% RUSSIA/CIS 24% GLOBAL 12%
WHAT PERCENTAGE OF YOUR CLIENTS DO YOU THINK ARE CONSIDERING PERMANENTLY CHANGING THEIR DOMICILE OR COUNTRY OF RESIDENCE? The Knight Frank Wealth Report was a popular download. We have extracted this data, where 23,000 bankers/IFAs of Ultra High Net Worth Individuals said if/where their clients were planning to become domiciled. (Graphic by D2E)
Market stabilising says top consultant
Small city takes big dreams to MIPIM
Rich opportunities in Hyderabad
Cypriot consultant Danos says that, although they recorded price falls in 2013, the market is now recovering, helped by the non-European buyers attracted by the country’s golden visa scheme. Plans to ease capital controls introduced by the Bank of Cyprus will also aid recovery, Managing Director Panos Danos asserted.
The city of Summerside on Prince Edward Island has a population of 15,000, but it played with the big boys at MIPIM this March after winning a stand as part of an award for their Greenwood eco-business-park. The greenminded city says it is looking to generate 500 jobs and draw liked-minded environmental enthusiasts to the area.
The final steps in forming India’s new state, Telangana, are being taken and interest is rising in the city of Hyderabad, says Jones Lang LaSalle Senior Manager Trivita Roy. “Hyderabad’s realty market will pay rich dividends to those who help it out during this so-called crisis,” she said, stressing that the window of opportunity may not last long.
EasyJet founder looks to “shake up” UK market
Scandinavians flock to buy discounted stock
“No bubble” in market, says finance chief
Sir Stelios Haji-Ioannou, founder of easyJet, is planning to launch a new UK real estate website, easyProperty. com. The website will aim to make property transactions straightforward and “aggressively slash estate agency prices”, it says. More details of the site will be revealed in the summer or early autumn this year.
Scandinavian buyers of Spanish property saw the biggest percentage increase to 2013. Finnish buyers increased by almost 90%, followed by a jump in Swedish buyers of 65%. Asa Honmsten of Fair Media says the trend is likely to continue: “The housing market here is very strong, prices aren’t going down and the weather isn’t going to change!”
Citigroup boss Michael Zink says that it is hard to see how the Singapore market could crash. Singapore saw a small decline in property prices in Q4 2013, its first in two years. Zink pointed to low mortgage ratios and high homeownership as positive signs. “Ninety per cent of households live in a home that they own, so where’s the bubble?” he asked.
ST KITTS AND NEVIS
Island battles giants to win Chinese investment
New website gives zip to retirement property
The Minister of Labour and Social Affairs pointed to the Barwa Al Baraha (Workers’ City) housing development as an example of “concrete steps” towards improving construction worker conditions. The units will house 5,300 workers. Qatar’s lethal conditions have hit headlines but the Minister denied seeing criticism in the international press.
St Kitts and Nevis hopes its relatively cheap property-forinvestment scheme will attract Chinese investment. The tiny island faces competition from the US, Australia and many European countries, but has an advantage in a relatively low entry price of US$400,000. That’s $100,000 cheaper than the US’s EB-5 scheme and far below Australia’s $4.5million.
Mexzip.com provides news and listings of Mexican property, specialising in the overseas retirement sector, especially targeting US citizens. The newly launched site’s founder, Ray Ayuso, told OPP that benefits for US retirees in Mexico include a low cost of living, close proximity to the US and established American retirement communities.
Project “concrete step” for worker conditions
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NEWS Analysis Words | Adrian Bishop, Editor, OPP Connect
China and US taking centre stage
Will China’s demand for US property lead global capital movements by 2016?
“What’s driving them over here is that they have this cash, and they want to park it somewhere or invest somewhere.” According to leading overseas property website Juwai.com, which has Chinese and English-language versions, California is the leading US target for Chinese property investors. Co-CEO Andrew Taylor tells OPP: “Based on Juwai.com user
“What’s driving them over here is that they have this cash, and they want to park it somewhere.” activity, California is the top US state for Chinese buyer interest and the United States is the top country. California alone receives more Chinese buyer interest than most countries of the world.” Chinese buyer interest in
California on Juwai.com jumped by 327% during 2013 and by 389% in Los Angeles. “[The numbers] are likely to get even bigger,” says Mr Taylor, “The Chinese economy continues to create wealth and wealthy individuals. It continues to open up to the world and relax currency controls. More wealthy Chinese means more of them investing overseas and each of them will be able to invest more in international real estate.” Another boost to the appeal of the United States is February’s demise of Canada’s ‘millionaire visa’, which has 59,000 pending applications from Chinese High Net Worth Individuals. The US, with its EB-5 visa, which requires a minimum US$500,000 in exchange for a green card, is set to take over, although it faces competition from various investment immigration schemes including Australia’s, the European golden visa programmes and even the Caribbean island nation of Dominica, with its low US$100,000 entry point.
ight now, the biggest international cross-market business ﬂow is between Singapore and the UK – it’s worth a massive US$1.3billion. But that is set to change, say investors attending the 2014 Private Equity Real Estate Conference in Hong Kong. By 2016, Chinese crossborder real estate funds ﬂowing in to the United States will overtake the Singapore/UK total, believe 70% of professionals polled. Across the US, Chinese property investment is rising. It is estimated that one out of every 10 Californian homes is going to Chinese buyers. Orange County-based Kinny Yong is handling rising business from Chinese investors and says his phone is ringing non-stop with inquiries. The ReMax agent has worked in the area for 20 years. His sales tips include posting an advert in the Ranch Market Chinese shopping centre. “They see the market here still has room for appreciation,” Mr Yong told the CNBC news channel.
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Business Briefing Ideas and inspiration to help you run your business Books: Three messages to take from Talk Like TED by Carmine Gallo TED (Technology, Entertainment, Design) are talks given to an audience but also distributed free and online, and they have been successful at raising science and design understanding. A great TED can launch a media career – just ask Sheryl “Lean in” Sandberg (in this spot, in November). But so can any great talk, at any exhibition, seminar or industry event. Gallo’s 3 tips for TED: Unleash the master within. Your audience won’t be inspired by your subject unless you are. Genuinely demonstrate passion, enthusiasm and knowledge and even the driest subject can become riveting. Teach them something new. Jolt an audience out of their innate stupor and grab their attention by challenging preconceived notions with an innovation or a shocking statistic. The 18 minute rule. It doesn’t take long for your your audience to start suffering “cognitive backlog” and beginning to lose the message. Well, that is if you’ve said anything interesting. If you talk for longer, break it up into manageable chunks.
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Did you see the selfie that host Ellen DeGeneres took at this year’s Oscars with Brad Pitt, Angelina Jolie, Bradley Cooper and the rest? Lovely wasn’t it? Funny, sort of spontaneous looking, innocent, a bunch of celebrities showing their fun side. It was retweeted a record breaking 3.3 million times and splashed over the world’s more traditional media. Innocent? Yeah, right. It was taken on a Samsung Galaxy Note 3 smartphone and Samsung have a $20 million advertising and sponsorship agreement with Oscar broadcaster ABC. So it was one of the greatest product placements in history. Most products are used in a fairly passive manner – an admirably kookie heroine drinks Pepsi, James Bond shows off his new watch. But Samsung showed how effective this phone is, how trustworthy in a pressure situation and how the Galaxy can take more than a selfie; it can take DeGeneres and her ten famous friends, all at once. Maybe it should be called a groupie?
The streamlined office Information technology was meant to set us free, yet everywhere OPPs are chained to their desks. It doesn’t have to be like this, with organisational software. 1. Email buffering: Ping! In comes another email and bang goes the concentration. Use an email buffering app such as SaneBox (www.sanebox.com), which analyses your behaviour, works out who is important and organises your emails accordingly. 2. Business card scanning: Just come back from an exhibition with pockets full of cardboard? Don’t laboriously type in new contacts; download a free app like cardmunch (www.cardmunch.com). Scan the cards with your phone camera and it converts them to contacts. 3. Organise your notes: Like an online, shareable notebook where you keep web-links, ideas and things-to-look-at-later. (www.evernote.com). 4. Manage social media: Tools such as HootSuite (hootsuite.com) let you post to several platforms at once and analyse campaign results. Buffer (www.buffer.com) allows you to write all your tweets in one go and spaces them out through the day. 5. Project management: Apps like Basecamp (www.basecamp.com) keep teams in the loop by storing the project components and documents in the cloud. Owners, managers and staff can easily see progress and deadlines, schedule meetings and give feedback. You can leave a voice message, saying how wonderful the house is, and how there has been a lot of interest in it so “get over here now!” You can add your location or the location of the property, using Google maps. In our test it pinpointed the exact house. You can hold group chats, allowing your team to communicate wherever they are in the world.
Innovation: printed housing
Dutch architectural firm Dus are bringing 3D printing to a new level. They’ve taken the technology they’d previously used to build scale models of houses and supersized it – using it to print out full-sized sections of a canal-side house, which can be basically snapped together. The massive 3D printer by Ultimaker has been dubbed KamerMaker, and prints out the sections filled with a honey-combed internal structure. These can then be filled with a foam which sets like concrete. www.dusarchitects.com
Tech: 3D maps Realism in imagery
Matterport’s 3D indoor mapping system went on sale in March. The Matterport Pro 3D Camera uses its array of sensors to create a ‘map’ of its environment. It is then possible to give potential buyers an impressive ‘walkthrough’ of a property. It’s also useful for developers, who can send accurate updates on construction. The videos can be edited, allowing effective visualisation of changes. The system costs $4,500 plus a monthly subscription. www.matterport.com
Thijs Stoffer (above) joins OPP as MD, saying: “Helping OPP to grow its tailor-made products for different types of property markets around the world is a challenge I am looking forward to being part of.” Emma Dreike has left PRCo in London and joined Spider PR to develop its real estate arm. Greg Ellis has joined Germany’s biggest portal Scout24, from REA Group in Australia where he was CEO. Matthew Powell has been appointed director of Savills’ Hanoi office in Vietnam.
BIG ISSUE Social housing Words | Adrian Bishop
Fixing up the world’s slums, casa by casa
Property developers don’t always get a good press, but building social housing is one way to keep the local people – and investors – very happy
ome overseas property developers, agents and investors want to do more than simply make money – they also want to make a difference by ensuring that some of the poorest people in the world have the chance to own a decent home. The demand for social and affordable homes around the world is huge, even in some of the wealthier countries. Scott Anderson, Managing Editor of the NextBillion development and enterprise website (nextbillion.com) says the issue has a truly wide scope: “It’s hard to find a topic more complex and yet more
relevant to poverty alleviation than affordable housing.” And the business opportunities
It’s hard to find a topic more complex yet more relevant to poverty alleviation than affordable housing are also massive – possibly trillions of dollars, says Bill Drayton, founder of the Ashoka organisation
that teamed up with NextBillion to produce The Global Spread of Aﬀordable Housing ebook. “If a billion people are shut out of the formal housing market, what would it mean to your business if you could unlock the potential of that trillion dollar market?” he asks. “If you add up the building materials to be produced, distributed and sold, the loans and interests on mortgages, improvements and construction deals, the jobs and income generated, the land purchased, infrastructure and public services build – all the related products and services to meet the
APRIL 2014 those who invest in these types of projects. You also get to make a difference to people’s lives and profit at the same time.” Another sector specialist, Graham Russell, has seen social housing in Australia and the UK. Mr Russell is Chairman of the UK-based Elim Housing, and has written a report on the Value of Investing in Social Housing in both countries for the Winston Churchill Memorial Trust. Elim Housing uses a significant proportion of its housing stock to provide support services, as well as housing. Similar organisations in Australia include St Bartholomew’s House, in Perth, and Common Ground, in Adelaide. “There are much bigger housing associations in the UK than in Australia with some having in excess of 80,000 units of accommodation. In Australia there are many smaller housing associations but the sector is seeing more mergers and acquisitions as economies of scale become more of a competitive advantage,” he explains.
Governments bow out affordable housing deficit globally, it amounts to a multi-trillion dollar opportunity for multiple areas of employment and economic growth.”
my house, my life
Governments have been less inclined to finance social housing, leaving it to the private sector have a ready-made client base that will buy a product accessible to their budget. This is a hands-free investment with typical guaranteed annual returns at 24% over 24 months. Minha Casa Minha Vida (MCMV) is a seriously exciting area with some serious returns for
Governments around the world differ in the way the affordable housing sector is financed. Some subsidise it more centrally while others believe institutional and private investors should provide the capital and benefit from the rewards, as well as shouldering any risk. The sector can offer high returns for investors. For instance, Brazilian affordable housing, through the Government-based Minha Casa, Minha Vida (My House, My Life) programme, which seeks to build millions of homes for low earners and prevent the growth of favela slum areas, offers a simple route into the market and ‘serious returns’, says property investment specialist, Colordarcy.
Sector expert, Brett Tudor says, “For investors, this is a way into the Brazilian market that is very simple to understand. There are no bubbles, as the price of property is fixed at a level people can afford and homes are sold only to those in the local community. You also
Following the global financial crisis, governments have been less inclined to finance social housing and have largely left it to the private sector. Fresh solutions are needed, Mr Russell tells OPP: “Clearly, governments have a fundamental responsibility to ensure that their people are housed to agreed standards, but, typically, they are now less inclined to be the main investor, preferring to look to the private sector first and then to the not-for-profit housing sector to deliver housing.” Affordable housing ratios vary considerably around the world. In Scotland, social housing accounts for more than 33% of the total stock and in England it is around 20%, but in Canada the figure is nearer 6% and in Australia, 5%. But the cost of not providing adequate affordable housing can be great too, he argues. “The severe consequences can be homelessness and overcrowding (on any given night in Australia one in 200 people are homeless) or
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BIG ISSUE Social housing
Affordable housing from St George Community Housing, in Sydney
HOMEOWNERS’ DREAMS COME TRUE
satisfied about build quality and the progress of the project.
Impact investing Finance, funding and profitability are key issues for the sector. Institutional investors have coined the term ‘impact investing’ that refers to various market sectors, including affordable housing, which have the potential of generating market returns while addressing key social and environmental challenges. But the sector is struggling to meet expectations. Last autumn, World Economic Forum data suggested capital of less than US$40billion had been committed to impact investments and “aggressive growth” is needed to meet a 2020 market projection of more than $500billion. Developers of affordable housing schemes can face financial challenges, says Brazilian property expert, Ruban Selvanayagam, and one temptation is to cut costs, resulting in inadequate sites and poor-quality workmanship. He tells OPP: “While there is the major advantage of huge demand, the main risk comes down to cost. Social housing needs to be priced low to fit accordingly with the household budget limits of the market segment. This often results in constructors compromising on quality standards and housing units being in bad locations (with poor access to essential infrastructure and public services) subsequently producing unsustainable
they can manifest as poor health, a withdrawal from community and relationship breakdown, all of which have potentially high costs on the state.” With growing pressure on the private rented sector, new economic solutions are need for affordable housing. Among fresh approaches in the UK is an increased use of bonds and some larger housing associations have raised tens of millions of pounds through 25-year bond issues, which provide a good level of return, he says. The sector offers two main benefits, for investors. “Firstly, to secure a healthy return on investment and which is comparable with other lower risk market opportunities. Secondly, it provides the opportunity to support the development of much-needed affordable housing at a time when there is a strong demand,” says Mr Russell. There are also risks to investing. “Essentially, social housing provides an asset-backed investment opportunity. The key risk mitigation is to ensure that both the balance sheet and the profit and loss of the particular housing association can support the private sector investment and deliver the agreed return.” But some social housing developers offer protection for investors through an escrow account, which is overseen by a lawyer who only releases funds to the developer once they are
Buying their own home has led to one couple’s dreams coming true – not once, but twice. For Daliane Gilvaneide and Paulo Henrique, owning a Minha Casa, Minha Vida home at EcoHouse’s Acro Iris development, near Natal, North East Brazil, fulfilled a lifetime’s ambition and means they can get married. In June 2013, they were first to move into a new two-bedroom, 55-square metre home at Arco Iris, in Ceará Mirim, EcoHouse’s first affordable housing community. Daliane says, “It is an immense joy and has been a lifetime desire for us to own our own home. EcoHouse has made our dreams come true. Now we can get married! The house is wonderful it’s a dream come true!” Paulo says, “I have such a sense of excitement. Everyone wants to have their own home, be a family. It is sad to always have to rent, and with this house we are taking today – although we are paying a mortgage to Banco de Brasil – we are paying towards what is ours.” Gabriela Medeiros, Head of EcoHouse Brazil Operations, says it is an honour to provide homes for Brazilians. “EcoHouse always constructs the best, thinking of comfort and quality of life. The workmanship and materials used in housing units are topnotch. We are happy to be able to realize the dreams of many families.” Demand from purchasers was so high that all Arco Iris homes were pre-sold before completion. Funding for the project was provided by private investors who received annual returns of 20%.
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BIG ISSUE Social housing communities that represent little convincing transformation in living standards. This also diminishes the investment attractiveness of the segment as a whole.” Mr Selvanayagam is the commercial director of the Fez Tá Pronto Construction System, which deploys a fully recyclable gypsum plaster block and a copyrighted building system. This has been used to build high-quality, environmentally-friendly affordable homes that cost at least 40% less to build than standard materials. With previous projects financed by the country’s leading financial institutions, the company is aiming to fully integrate the system into the marketplace, principally via Minha Casa, Minha Vida.
Questionable consensus Thanks to international pressure and a greater will from governments, the sector has made progress, although in Brazil, the effect on the poorest sector is yet to be seen, Mr Selvanayagam says. “In Latin America, for example, while the various state social housing initiatives are by no means operating eﬃciently, they certainly are a step in the right direction. Nonetheless, the mainstream developers still only want to work in the middle-upper income sectors due to a questionable consensus that margins are better. Out of the 16 developers on the Brazilian stock exchange (Bovespa), for example, not one has projects directed to the
lowest income groups (despite the huge demand).” The problem, Mr Selvanayagam believes, is a lack of holistic thinking. “Urban development has become based on profits and not what is actually sustainable. Sure, there are some interesting projects that take into consideration environmental protection amongst other sustainability-related factors – but the lowest income groups (who form the majority) have very little chance of acquiring such a home, creating a very segregated marketplace. There needs to be a major paradigm shift away from the idea of building simple houses in the distant peripheries with inferior infrastructure and public services.” In some countries, the affordable housing sector faces particularly severe challenges. In Mexico, even though a third of the population in the southern state of Chiapas are in extreme poverty, they refuse to live in state-provided (and internationally financed) homes, as they are dilapidated and let in the wind and rain. In the La Trinidad suburb in Zumpango, homes from the Ciudades Bicentenario – a failed government project launched in 2007 to improve subsidised housing in Mexico – lie disused and empty. Across the whole of Mexico there are 330,000 “abandoned houses” that are vacated, unpaid for, and in a deteriorated state, says the Urban Development Ministry.
The favela may look nice from afar but up close conditions are challenging
Indian-based social housing specialist Brick Eagle is aiming to develop one million homes by 2030 – and it’s not the only one. In Egypt, Arabtec Holding, Dubai’s largest listed construction firm, has agreed to help the Egyptian army build one million houses in a project worth EGP£280billion (US$40billion). Brick Eagle’s private equity arm, Brick Eagle Capital Advisory, is aiming to raise US$100million to invest in land for affordable housing projects. In 2014 it aims to buy 1,000 areas of land and house more than 70,000 families in the next five to seven years,” says CEO, Rajesh Krishnan. “Mumbai remains key focus area for our investments in 2014. The city currently needs over 2.5million affordable homes and we hope to address at least one per cent of this demand through our investments,” he says. The funds will be routed through Brick Eagle’s Singapore. Brick Eagle currently manages over 30m square feet of affordable housing project. The Arabetc affordable homes project is one of the biggest in the region, covering 160 million square metres across 13 sites. Work is expected to begin in Q3 2014 and be completed before 2020. Hasan Ismaik, Arabtec’s Chief Executive told Reuters the land will be given for free and around 40 banks in Egypt will offer finance to homebuyers on limited income.
NEWS Development news
Keeping track of major developments Tallest residential tower hits halfway point New York’s 432 Park Avenue has hit its half-way milestone, reaching 700 feet two years after construction began. The project, co-developed by CIM Group and Macklowe Properties, will be the tallest residential building in the Western world upon its completion in 2015. It will span 96 ﬂoors and comprise 104 residential units including 10 full-ﬂoor penthouses. Half-ﬂoor residences begin at US$17,250,000 and full-ﬂoor apartments start at $74,500,000. The building was designed by Rafael Viñoly Architects, while the interior design is by Deborah Berke Partners. See a timelapse of the building’s progress at 432parkavenue.com/ CONSTRUCTION%20MILESTONE
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Forts into flats
Big launches in Dubai
DAMAC Properties has teamed up with the Trump Organization to launch a project inside the AKOYA, along Umm Suqeim Road. The developers claim the project, made up of 100 limited-edition luxury villas and mansions, is the ﬁrst of its kind and one of the largest developments in the city. The gated residential area is surrounded by the Trump International Golf Club. Meanwhile, Emaar Properties has announced the launch of their BLVD Crescent residential development in Downtown Dubai. The project comprises over 300 luxury units within two towers (39 and 21 storeys). Registration will begin on 19 March in Dubai, Abu Dhabi, Almaty and Shanghai.
This seven-storey apartment block is part of a residential district being developed on the site of a 19th century fort outside Paris. Designed by Parisian architectural ﬁrm Guérin & Pedroza, the block is one of four in the district being built by developer Bouygues Immoblier. The block comprises 74 units, from studio ﬂats to ﬁve-bedroom apartments. Architecturally, the balconies carved into or built out of the house’s facades and coated in a gold material makes for a striking look. The apartments will be heating using geothermal energy. www.guerinpedroza.com
Journal Squared breaks ground
The ﬁrst phase of Journal Squared development in Jersey City, USA, has broken ground. Phase one is the 54-storey tower, which will hold 540 apartments. The tallest tower will be 70 storeys high. The trio of metal-plated towers is due for completion in 2016, according to developer Kushner Real Estate Group. The towers will contain 1,840 apartments altogether, as well as a mix of retail and restaurants at the base of the buildings.
Melbourne docks project completed
Brookﬁeld Multiplex has completed construction on their AU$161million residential project in Melbourne. The Quays, in the Melboune
Docklands, comprises 617 units in two towers. The apartments, developed by MAB Corp., are available from AU$411,000, having seen a 3.3% price increase in the last year. The towers were designed by McBride Charles Ryan and follow an “organic design” and a colour scheme based on coral and pearls. The Quays incorporates sustainable features such as a high-performance glass facade, a draining system made from rain gardens and tree pits, and a rooftop water harvesting system. The Quays are part of the NewQuay precinct, which includes residential developments like the Grand Mercure Apartments and Promenade at NewQuay Melbourne
Rum Cay Phase 1 launched
Canary Wharf, London, will have its ﬁrst residential building by 2018. The 58-storey, 556-unit tower will be built by Canary Wharf group, who plan to start construction this summer. The Dadabhai Group, in Bahrain, has launched a new residential project comprised of two 28- and 29-storey towers. Construction has already begun and is expected to be completed in mid-2016. A new mixed-use project on the island of Kakaako, Hawaii, will include 88 residential units ranging from US$400,000-$750,000. The development, by Castle & Cooke, will be completed in 2016. Malaysian group Mah Sing has purchased an 85.43-acre plot at the Damansara Heights of Shah Alam to develop a US$7.6billion luxury residential project, scheduled for launch in 2016. The UK Chancellor, George Osbourne, announced that 15,000 homes will be built at Ebbsﬂeet in Kent. The project will become a ‘garden city’ – the ﬁrst to be built in the UK since Welwyn Garden City in 1940.
The Rum Cay Ocean Resort & Spa, by Montana Holdings, in the Bahamas has just been launched. The ﬁrst phase consists of 68 fullyfurnished luxury Beach Cottages starting from £81,500 with a 30% deposit payable. Construction is due to start shortly and prices are then likely to increase. The developer is also oﬀering bespoke villas to be built on private land lots within the adjacent private gated estate. A central Beach Club is also in the works (construction is due to start soon). The facility will consist of inﬁnity pools, restaurant, spa, gym, TV theatre room, games room and a business centre. www.rumcayresorts.com
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Salespeople make natural managers, right?
Even the best salesperson can feel out of their depth as a manager
to be successful. What activities should they be doing and how should they structure their day? What levers are they able to use and when should they use them? Some salespeople take well to managing a team but my experience tells me that they’re the exception. If you are not personally able to help your Sales Managers understand what they need to do each day then it is your responsibility to ﬁnd another way to help them (which will help you too).
A sales manager role where you’re also expected to make sales is one of the most difficult So, after my questioning revealed my client’s unpreparedness, what were my tips to help the leading salesperson who was losing his way as a Sales Manager? First, if you support the member of staﬀ and believe in their ability, then tell them that you’re behind them and admit that you have let them down with the lack of support.
Second, recognise that if you give them additional duties (motivating, checking, coaching), their call time and call numbers will go down. This will probably see their sales go down too. This, I know, is blindingly obvious but many overlook it because, I think, lots of the extra jobs are ones that ‘only take a minute and that makes no diﬀerence’. It does for two reasons. The odd minutes add up over a day. Also, it’s not just the minute oﬀering advice, it’s the three minutes tuning back into whatever you were doing before. Or the one minute leads into a conversation about something else. In short, it dilutes focus and that has a cost. Third, give them some training for goodness sake! If you’re good, then do it yourself. If you’re not, then hire someone that is. Finally, if you can’t aﬀord to lose their sales success then think very carefully about whether you want to make them Sales Manager at all. If you still decide to promote them, give them as little extra administration as possible. For small teams, the best managers are those that lead by example through their own sales activity and sales performance but then they’re Sales Leaders and not Sales Managers. And that’s a whole other article!
client called me this week to talk through a problem. His sales team has been doing well (they hired a great sales trainer!) but his most senior person was ﬂoundering. What’s the problem, I asked. I paraphrase a little: “His duties haven’t changed that much. He just has to focus his team in the morning, check they’re making the important calls, oﬀer help to anyone struggling to close a deal, make sure everyone hits their numbers of sales calls each day and report back to me. Then, he just needs to make his sales calls. Yet his numbers of sales calls each day are the lowest of anyone and he’s not closing the deals he was.” So, he’s now the Sales Manager and your best salesperson? “Yes.” How much training has he been given in being a Sales Manager? “Er, well... none.” Has he ever managed a team before? “No, never.” This is a classic mistake and, yes, I’ve made it myself. A Sales Manager role, one in which you’re also expected to make sales, is one of the most diﬃcult jobs in business. Really it is. The job of anybody leading a team or running a company is to help your people understand what they need to do each day in order
PAUL OWEN: The Clear Path Company Tel: +44 (0)20 3004 9113
TECHNOLOGY Future travel Words | Christopher Nye
Watch This Space
Are we on the cusp of a great leap forward in long-distance travel? Richard Branson thinks so, but is he alone?
e’re constantly told that we are living in an age of astounding technological change, yet the Boeing 747 jumbo jet celebrated its 45th birthday last month. Most cars run on petrol using an internal combustion engine just as they have for 100 years, stuck behind a slow-moving caravan on roads where the speed limit hasn’t been raised for 50 years. A hundred years ago, passenger trains were routinely travelling at 100mph and there were considerably more miles of track than today. Even the biggest cruise ships travel at around the same speed – 20-25 knots – as the SS Titanic did 100 years ago. As for spaceships, forget about it – nothing much has been happening up there for decades.
For sellers of overseas property, the fact that long-distance transport speed and development has failed to keep pace with other forms of technology in the past half century
Richard Branson said that Virgin was on course for commercial flights into sub-orbit seems like an opportunity missed. So when it was announced last month in an otherwise sobre and conservative property report that sub-orbital space travel is now something to factor into your
calculations for the overseas property industry, people sat up and took notice. The Knight Frank 2014 Wealth Report included an interview with Richard Branson in which he said that his Virgin Galactic was on course for commercial flights into sub-orbit next year, and flights from point to point by 2017. He said: “I’m very excited about a future version of our current spaceship which will make transcontinental travel clean and fast – London to Sydney in a couple of hours with minimal environmental impact.” Knight Frank’s Global Head of Residential Research Liam Bailey said in the report: “Right now London wins over New York as a global wealth hub, in part because London is more convenient for
APRIL 2014 airships the heavy lifting is done by helium, reducing fuel costs to a quarter of a jet aircraft’s. The advantages of modern airships extend beyond the simple joys of fuel economy and resembling Thunderbirds 2. They can travel nonstop at 100+mph for thousands of miles. They aren’t limited by tracks like a train, can travel over land and sea and don’t require a conventional airport, being able to stay aloft for weeks. Several airship companies are developing them for carrying freight, including the Hybrid Air Vehicle (HAV) recently awarded £2.5 million by the UK Government and about to enter commercial production. For passengers this seems all a long, long way off. For more conventional advances in air travel, it was good to hear Michael O’Leary of Ryanair telling the Irish Hotels Federation Conference in February that Ryanair were looking to start €10 flights from Europe to the US (and €7.30 back). It’s nearly 30 years since Ryanair started, so surely time for a fresh challenge. However, hopes that cheap trans-Atlantic
flights would be taking off any time soon were soon scotched when O’Leary pointed out that buying the planes required for the venture could take Ryanair five years. It is still something to look forward to for second home owners, however, for whom the cheap-fares-airline model is ideal:
Ryanair are looking to start ten euro flights from Europe to the US – time for a fresh challenge business travellers, holiday makers and people who forgot to print off the boarding pass subsidising the holiday home owners, retirees and international students who can plan well ahead, won’t be too inconvenienced if a flight is delayed or cancelled, and don’t need baggage or inflight meals. And where Ryanair go, the other airlines seem bound to follow.
World-changing innovations are few and far between – the basic staples of travel haven’t seen significant alteration in decades
African, Middle Eastern, Russian and European UHNWIs. But within a decade, this convenience premium could be noticeably reduced if Mr Branson succeeds in making his vision a reality.” For those of us not put off by the movie Gravity, it is an exciting thought that we could be closer in time to routine sub-orbital travel (albeit only for the super-rich) than we are to the global financial crisis. For now, the only serious competitor to Branson is the XCOR Lynx, a two-seater spacecraft that its creators hope to operate in earnest by 2016. However, once the technology is proven the world will soon start clamouring for more and a new space race could begin. Who knows what secret plans are underway in Boeing’s Phantom Works, its prototyping division, or in skunk works from Beijing to Baltimore. Or will it all become just another Concorde – a magnificent technological achievement but useless for the mass market? In the meantime, if they can’t get us around the world faster, can airlines do it cheaper, perhaps by economies of scale? Earlier this year the Sky Whale concept was publicised. It’s a 755-passenger, three-storey plane with tilting engines allowing it to take off and land on short runways. Given that this is 100 people fewer than the Airbus A380 can already carry, it is hardly overwhelming. The best hope for reduced costs is in fuel economy, which airlines certainly are putting a lot of research into. Sub-orbital doesn’t even rate a mention in the otherwise enjoyable “concept plane” section of Airbus’s website. Here it is all about comfort, space and lightness, with cartoon people working, resting and wandering casually around enormous, empty cabins – frankly, space flight seems more likely than flying becoming that enjoyable. A brief but wonderful era of air travel (for those who survived, anyway) was the airship interlude in the 1930s before the Hindenburg came crashing down. While conventional jets are inevitably expensive due to the need to hurl a heavy object through the sky, in
TECHNOLOGY Future travel
Hybrid Air Vehicle: the future of cheap, green travel for the masses?
But why has transport technology lagged behind? Could it be at least partly blamed on our brightest engineers going into computers? While personal computers, smart phones and the internet have changed our lives, they have sucked out much of the talent and creativity with them. Now, some of that talent is drifting back, loaded down with cash and looking for something exciting to develop. Google is at the forefront of developing driverless cars, while Sergei Brin, Google’s inventor, is helping develop electric vehicles. Jeff Bezos of Amazon is working on Blue Origin, a rival to Richard Branson’s SpaceShipTwo. Elon Musk made his money founding PayPal but made his reputation with Tesla Motors who are the exciting face of electric car technology. Musk is also developing plans for the “Hyperloop”, a system of tubes through which passengers would travel at up to 760mph within capsules. Crazy? Outlandish? Yes, and creating a massive network of tubes snaking across the countryside feels like a retrograde step in many ways. But remember it was only 40 years from Bleriot’s first flight across the English Channel in an engine and seat strung together with wires, to the first ocean-crossing jetliner. A huge infrastructure of airports was developed within a generation. What are the implications for the overseas property industry of all
this potential transport technology? There are three main advantages – cash, hassle and space. Around 20% of an airline ticket price is fuel,
Why has transport technology lagged? Is it the brightest engineers going into computers? and in many countries you also pay ‘green’ taxes to encourage you to stop flying – €42 per trans-ocean
flight from Germany and up to £188 per person in the UK. That is all money that retirees, holiday home owners, international students and rental home owners must take into account when choosing where and if to buy a property. An extra £500 in taxes each time you take the family to the villa in Florida can be seriously demotivating for a European family considering buying a holiday home there. Moreover, not everyone enjoys international travel. Boeing’s new 787 Dreamliner is so called because new technology in its construction includes a carbon-fibre fuselage that enables higher pressurisation and bigger windows which it claims cuts jetlag. Incidentally, Boeing’s problems in developing the Dreamliner has been a salutary lesson in the problems of being innovative – sub-orbital feels a long way off, whatever Knight Frank say. Driverless cars offer all sorts of advantages for the holiday home and resort industries. There are no worries over foreign roads, driving on the ‘wrong’ side, driving underage, breaking speed limits or driving drunk. And lastly, space. With driverless cars you don’t need your own – what a waste of money having a £20,000 asset sitting idle for 95% of the time? Instead, homeowners will simply call up a driverless chauffeur. We could soon reach a time where developers can stop including garages and car parks.
Fancy travelling in a capsule at 760mph? Wait for the Hyperloop
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FEATURE Mipim award winners
Words | John Howell
Blue Skies Thinking MIPIM’s stunning award winners demonstrated an amazing return to confidence in international property
reated in 1991, the MIPIM Awards honours innovation and excellence in international real estate. The award winners were unveiled amongst much singing, dancing, smoke and flashing lights. The projects shortlisted (four per category) had been selected by a powerful team of international experts but the final winner was chosen by the vote of the 20,000+ delegates attending MIPIM. Being MIPIM, the projects completing for the Awards were huge and very expensive. Most must have cost hundreds of millions or billions of dollars. I suppose we shouldn’t be surprised that a single glass of house champagne in a local bar cost €26. Coming to MIPIM costs an arm and a leg. Companies attend year after year and some bring dozens or hundreds of staff. MIPIM itself was, as always, well worth attending. Outside, it was bright and sunny… and expensive. Inside, 20,000-plus visitors from 80 countries were networking, doing business, attending a host
Gardens by the Bay , Singapore
BEST INNOVATIVE GREEN BUILDING & SPECIAL JURY AWARD: Gardens by the Bay , Singapore Architect: Grant Associates and Wilkinson Eyre Architects Developer: National Parks Board Singapore Building Services Engineering and Environmental Designer: Atelier Ten Ltd Gardens by the Bay was built to be ‘a city in a garden’. It has been designed as a series of distinct ecosystems, enabling the gardens to function with maximum environmental efficiency, and to showcase those world habitats most at risk from climate change. The garden at Marina South is home to some spectacular structures, including 18 Supertrees (2550m high) to act as iconic vertical gardens; two cooled conservatories which are among the largest climate-controlled glasshouses in the world; an aerial walkway and treetop bar and an indoor mountain, “offering tropical rainforest experience”.
of seminars and presentations and interacting with 360 (mainly) well-designed stands and 4,500 exhibitors. However, wherever you were, two things remained true – possibly in deference to French tradition; the toilets were dreadful and the on-stand catering excellent. There were a huge variety of exhibitors: from government bodies and industry giants all the way down to a few start-ups – so, all-in-all, a pretty normal MIPIM. Massive real estate agencies, lawyers and others exhibit alongside a much smaller number of more modestlysized companies. The same with investment advisers, architects and the like. All in all, however, MIPIM is heavily skewed in favour
FEATURE Mipim award winners of commercial, rather than residential real estate. But what about the conference? According to those who attended, there was a lot of useful – and thought provoking – discussion, much of it as relevant to residential property as commercial. London Mayor Boris Johnson delivered a stellar keynote speech on day one, and the other days included a series of fascinating sessions about reinventing Europe, investing in the Nordic countries, investing in Istanbul and many other subjects. The Big Debate – one of the cornerstone events of the conference – brought together some interesting ideas about how our industry has to adjust to changing political, economical and environmental times. While lacking in passion and a little
Boris Johnson delivered a stellar keynote speech and the show included fascinating sessions
rambling, it was well worth attending. OPP will be covering this subject in some detail in the months to come. To get a bite-size taste of MIPIM, you could try the much smaller MIPIM London in October or MIPIM Asia (in Hong Kong) in December. There is also news of another MIPIM show being launched next year in Japan. The two-day MIPIM Japan show is set to be held in Tokyo, from 20-21 May, 2015, organiser Reed MIDEM has announced. As well as the Cannes show, there are also UK and Asia MIPIM events. To find out more about the exhibitors, innovations and market trends revealed at MIPIM, visit OPP Connect and watch the series of OPP TV Interviews with such industry stars as Farouk Mahmoud of FIABCI, Jerry Cobb of FOC and Jonathan Murray of Unique.
MAX IV, Lund, Sweden
BEST FUTURA PROJECT: MAX IV, Lund, Sweden Architect: Fojab arkitekter and Snøhetta Developer: Fastighets AB ML4 Local authority: City of Lund A state-of-the-art synchrotron radiation facility in Sweden, expected to complete in 2015. The main building containing the laboratory and the storage rings is generated from a simple cylinder. The circle is twisted and raised which results in a shape based on a Möbius strip. The sloping terrain of the original site would have caused problems for delicate scientific equipment, so the architects designed a new, ‘waved’ landscape minimising car vibrations and managing stormwater.
Developer: Closed JointStock Company “Management company “Dynamo” This €735million project, due for completion in 2017, will have a capacity of 33,000. It spans 714,000 square metres and comprises a stadium, small arena, 5-star hotel, shopping and entertainment centre, offices and apartments. The exterior aims to preserve the old arena’s entrance while vastly improving the aesthetics; the enclosed roof and the building facade will all be contained within one structural system, built of diagrid trusses to support the building skin. The arena itself will be configurable for ice hockey, basketball, gymnastics, concerts and various other sports tournaments.
Spine Tower, Istanbul, Turkey
VTB Arena park, Moscow, Russia
BEST TURKISH PROJECT: Spine Tower, Istanbul, Turkey Architect: iki design group Developer: Soma Group
BEST RUSSIAN PROJECT: VTB Arena park, Moscow, Russia Architect: Manica Architecture / SPEECH Tchoban & Kuznetsov
The silohuette of the Spine Tower was designed to be at once bold and different and respectful of Istanbul’s existing architecture. The circular tower is described even by the architects
APRIL 2014 as “mild and sober” compared to other recent high-rises, and distinguishes the project. Its location in Maslak is close to Istanbul’s rising businesses and gives panoramic views.
intercontinental hotel, Marseille, france
Tanzende Türme, Hamburg, Germany
BEST REFURBISHED BUILDING: InterContinental Marseille – Hotel Dieu, Marseille, France Owner & Investor: AXA Real Estate Developer: Altarea Cogedim Architect: AAA Béchu Agency & Tangram Architects
BEST OFFICE & BUSINESS DEVELOPMENT: Tanzende Türme, Hamburg, Germany Architect: BRT Architekten LLP Bothe Richter Teherani, Hamburg Developer: STRABAG Real Estate GmbH, Business Unit Hamburg
Kö-Bogen Düsseldorf, Düsseldorf, Germany
BEST URBAN REGENERATION PROJECT: Kö-Bogen Düsseldorf, Düsseldorf, Germany Architect: Studio Daniel Libeskind, New York Developer: die developer Projektentwicklung GmbH, Düsseldorf
The main facades of KöBogen are made from almostwhite natural stone and glass, arranged in a complex pattern that’s a little confusing to the eye at first. The courtyards and terraces are designed to combine architecture and nature, featuring sculptural elements intertwined with plants. The architects and developers put a lot of focus into sustainability, working to the American Leadership in Energy and Environmental Design (LEED) system. The key statistics, according to the developer: “170,000 cubic meters of excavation, 36 participating offices, 45 planning companies, 60,000 plans and reports, 10 tonnes of paper and 35,000 cups of coffee”.
This 24-storey high-rise in Hamburg has been the subject of both praise and disdain since construction started in 2010, but at MIPIM it found an appreciative audience. Built on the previous site of a bowling alley, the architecture is a lighthearted nod to the Reeperbahn’s sordid past and risqué present – the jaunty building appears to be dancing. According to the description of the architect, the towers resemble a dancing couple: “A husband and wife who move to the tango. Maybe the crossed legs of a prostitute.”
This 5-star hotel, opened last April, is a refurbishment of a listed monument, the former Hotel Dieu; a 12th century building which was extended in the 18th century, much prized by the citizens of Marseilles. It contains gigantic sweeping staircases, vaulted passages and impressive views across Vieux Port. The architecture of the building draws inspiration from the traditional monuments of the city, as well as “notes from the Mediterranean ocean”. The hotel is the first to be refurbished to an environmental quality certification; it worked to specifications of building materials, energy and water management and quality of air and water.
FEATURE Mipim award winners
Bosque das Acacias São Gonçalo do Amarante, Brazil
The Oliv, Singapore
BEST BRAZILIAN PROJECT: Bosque das Acacias São Gonçalo do Amarante, Brazil Architect: HCP Architecture & Engineering Developer: EcoHouse Group Bosque das Acacias is a luxurious and secure gated community. Each unit is a two-storey house and consists of a living room, dining room, kitchen, two bedrooms, a bathroom and a garage. Two artificial lakes and several trees will be put into place to create a park for the residents, to create nature awareness and an area suitable for children and families to relax and unwind, which is well suited as Bosque means ‘forest’. The development houses its own sanitary system in the centre of the community, which greatly reduces pollution and eradicates any dumping sites from being created. Within close proximity are five similar projects from EcoHouse.
BEST RESIDENTIAL DEVELOPMENT: The Oliv, Singapore Architect: W Architects Pte Ltd Developer: TG (Balmoral) Pte Ltd
Emporia Shopping Centre, Malmö, Sweden
BEST SHOPPING CENTRE: Emporia Shopping Centre, Malmö, Sweden Architect: Wingårdhs arkitekter Developer: Steen & Ström Sverige AB
Strange but beautiful, the Emporia is immediately striking with its golden-glass chasm. The building is designed to hide a retail centre behind “a wreath of residential and commercial buildings”. Only the entrance is visible from the road. The curved structure allows for a well-lit entrance courtyard. Inside, the retail units are arranged in a three-storey figureof-eight. The roof of the building is home to a park and, in the future, will also accommodate restaurants and perhaps even amusement parks. For the interior, the architects’ motto was “no intermediate scale” – they focused on large-scale patterns and intricate details.
The Oliv is “daringly designed for urbanites who prefer not to toe the line”, according to the developer. The building is designed to maximise space and light, angled carefully to offer impressive views from each apartment’s wide windows and personal 450-square-foot ‘sky garden’ (greenery-laden terrace). The building reaches 12-storeys and offers 23 freehold four-bedroom apartments as well as three eye-wateringly expensive penthouses (around US$13,560,600). The complex includes a barbecue area, pools and carparks and markets itself towards urban families – it’s close to several prestigious schools and travel links.
BUSINESS Florida sales
Florida: a sellers’ market Spring is busting out all over, nowhere more than Florida’s new build market. Builders can’t keep up! Pent-up demand is being released
MARTIN SADLER www.qualitasproperty.com Tel: +44 (0) 207 993 8254
November, a 10.5% increase from November 2012. Lee County gave permission for 66 single-family homes and duplexes, up 50% on the year before. Meanwhile, the NAHB/Wells Fargo Housing Market Index (HMI), which measures builder sentiment in the single-family housing market, has been above the 50 mark for the past eight months. A reading above 50 means that more builders view sales conditions as good than poor.
Consumers haven’t been able to find what they want – and are steering toward new-builds Even though builders are taking out permits at breakneck speed, they may have trouble keeping up with relentless demand over the coming two years, said Brad Hunter, chief economist of research group MetroStudy. “All of the people living in their parents’ basement will be getting their own places,” he predicts. He expects new construction to rise by 20% over the period in Southwest
Florida, but added that it ought to be higher to meet demand: “The constraint is finding enough plots in good locations and enough skilled workers to build them,” he said. Low inventory levels have allowed builders to raise prices by 11% yearon-year, to $270,900 in November, according to the National Association of Home Builders. Stronger job growth and a strengthening economy in 2014 should lead to a rise in household formations, which will be important to supplement housing demand. Lawrence Yun, Chief Economist for the National Association of Realtors noted there is still pent-up demand for all kinds of housing, which continues to push up rents and home prices. In Southwest Florida, rapid population growth has put pressure on the current supply of new homes with Lee County’s population, which swelled by a third to 586,925 from 2000 to 2010, expected to grow another 0.2% by 2014. So consumers are back, pentup demand is emerging, there is a growing need for new construction, distressed sales are diminishing and builders eager to construct again – there certainly seems a strong case these days to invest in developed Florida land plots.
espite rising costs for land, building materials and labour, the latest US government figures show building starts and permits rising sharply, indicating builders’ optimism about the future. With resale inventory having been dramatically absorbed over the last few months, consumers haven’t been able to find what they want and most people are now steering toward new-build construction as consumer confidence returns to pre-recession levels and household balance sheets are on the mend. The new home inventory in the Naples-Fort Myers market dropped to only a 1.1 month’s supply in the fourth quarter of 2013, compared to a normal supply of between two and three months of finished vacant homes. That means almost every home under construction has been claimed. Likewise, the inventory of finished, developed residential lots has reached its lowest number in years. In Q4, 2013, there were 11,227 lots; less than 25% of the supply available in early 2009. Building permits nationally are running at the highest levels for five years, with Southwest Florida outstripping the nation for single family homes. Some 634,000 singlefamily homes were permitted in
BUSINESS IHIF event Words | John Howell, Editorial Director, OPP
Five things we learnt at IHIF
For many OPPs, hotels and resorts are a risky and confusing new world. The Hotel & Investment Forum inspires and encourages
o you need to understand the hotel industry? Are you running or planning an hotel or resort? Are you looking for investors for your resort project? Are you looking for finance? Are you looking for an hotel consultant? Are you looking for specialist lawyers, accountants or other hotel professionals? More and more developers are building or planning projects that will either operate as or contain an hotel. There are many reasons for this: customer demand for an income stream, tax breaks, government incentives and planning constraints among them. Yet embracing this new
approach – perhaps after decades building holiday homes – can create as many problems as it solves. This is a whole new world: a fiercely competitive world, where huge companies
How can you get involved in the sector and avoid making disastrous mistakes? employing millions of people and investing billions of dollars fight to dominate the market. How can a newcomer get involved? How can he – or
she – avoid making disastrous mistakes? They need knowledge, advice and contacts. IHIF is the place to get all three. So what is IHIF Berlin? It is the world’s leading networking and educational event for the hotel industry. It brings together nearly 2,000 of the most influential people in the business, 200 expert speakers and a host of exhibitors promoting everything from hotel feasibility studies to designer furniture. Its focus is squarely on the development and financing of new hotels. This is reflected in the attendees: investors, developers, operators, constructors, brands and
APRIL 2014 advisers; plus some governments promoting investment in new or expanding tourist destinations. They come from all over the world: 73 countries were represented. For me, there are two categories of trade events: those that pay for themselves in terms of money made or money saved; and the rest. IHIF is in the first group. If you fall into any of the groups mentioned at the start of the article, the cost of attending should be repaid many times over. So what were the messages of IHIF Berlin 2014? There were really too many to list but a few must be mentioned.
1. The rich are spending it David Fenton, the senior economist for RBS, set the tone with a clear, upbeat yet cautious analysis of the world tourist and hotel industries. Much of what he had to say was
Prospects are good but normalisation of the economy after the crash will be a bumpy ride
Another eye-opener was Bertrand Artaud from HouseTrip. com, a start-up rival to Airbnb. They make it easy for owners to list and rent out their main or holiday homes when they are not using them. Last year his company dealt with 4 million nights of accommodation – up 300% on 2012. He now has 300,000 properties on his site and that number is growing by 3,000 every week. And he is just starting to address the nonEuropean market. In 2013, the global market for peer to peer lettings was $26 billion. In Europe, 3 million holiday rentals were made in this way. That’s nearly as many as were made through hotels.
3. What keeps the CEO awake? For me the star of the show was the redoubtable Michael Hirst of CBRE. In the first of two sessions he interviewed Richard Solomans, the CEO of IHG, the world’s largest hotel company, with 4,700 hotels and 670,000 rooms in brands such as Intercontinental, Crowne Plaza, Holiday Inn and Holiday Inn Express. He knows a thing or two about running a hotel business. How did they prosper during the recession? For me, the money quote was: “The biggest risk is complacency. We have a saying. ‘What got you here won’t get you there’. I have to remember it every day”.
4. Generosity of spirit In the other session Michael Hirst interviewed four other CEOs of four very different hotel groups (Club Med, Interstate, Accor and FRH – which operates the €1,000 per night Raffles hotels) and looked at how different sectors of the market faced some different and some common challenges. What impressed most was the way some of the world’s leading experts were so generous in giving free advice to attendees from around the world. Clearly,
The tourism juggernaut 1.1 billion international arrivals in 2013 - a new record. 516 million to Europe. 5.6 billion domestic arrivals - a new record 54 million international Chinese travellers - up 18.5% in one year. Tourism makes up 9% of world GDP and 11% of employment. 266 million are employed in tourism.
they were out to impress so that the delegates would later use – and pay for – their services but this makes IHIF a superb way of getting a market overview and a sense of the possible before jumping into a project. Could it be that naturally helpful and hospitable people go into the hotel business? And if so, could estate agents learn from that?
5. Numbers that stack up In an event of this size, amidst the avalanche of insight and information, sometimes some powerful numbers can hit you right between the eyes. ONE: Right now, China is building 69 new airports. When they are finished nobody in China will live more than 90 minutes from air travel. What a change in just over 10 years, since the Chinese were first permitted to travel freely. TWO: Nearby, in Indonesia – a country made up of over 17,500 Islands and 220 million people – the government has launched a comprehensive plan to boost tourism. With so many islands, to do this they need to buy 1,400 aircraft and train many thousands of crew. American Airlines, the world’s largest airline, has 1283 planes, Air China 312 and BA about 250.
equally relevant to the world of international residential property sales. To summarise, the prospects have not been better for 20 years but normalisation of the world economy after the crash will be bumpy ride. Recovery will be uneven, with the wealthy doing particularly well. In the US, the top 5% of earners have seen their spending go up 17% in the last five years. The rest of the population a mere 1%. It is similar elsewhere. Worldwide, the top 10% by income contribute 50% of all foreign holiday spending. But a cautionary note: can a recovery where so many are being left behind really be a proper recovery? Can it be sustained?
2. Peer-to-peer lettings are catching up
The loosens up while the Our UAE round-up of legal changes European Union looks to its finds tax hikes in Spain buttighten speedier hold on mortgage regulation processes in US, France and India BAHRAIN CYPRUS REDUCED REGISTRATION CAPITAL RESTRICTIONS CHARGES EASED On 20 May, Bahrain’s Shura Council ratiﬁed a motion to reduce charges for the registration of newly acquired real estate. The amendment, bringing the buyer’s fee down from 3% of the property value to 2%, is hoped to stimulate real estate growth. Furthermore, an incentive designed to push buyers to pay The Cypriot Finance Ministry quickly was approved – if the is stopping restrictions on fixed payment is made within 60 days termbuyer bankwill deposits. will also the receiveThey a 15% increase the amount allowed discount on registration fees. for monthlyOxford moneyBusiness tranfers,Group, both [Source: for individuals (from €15,000 www.oxfordbusinessgroup.com]to €20,000) and companies (from €75,000 BRAZILto €100,000). The capital controls were introduced in March REGISTRATION OFonFOREIGN 2013 to prevent a run the banks. Cash withdrawals are still limited to CAPITAL €300 per day and cashing cheques is not allowed. Source: Cyprus Property News
DENMARK BANK BUSINESS PRACTICE BINNED
registered by means of an The Dubai Statement Land Department Electronic of Registration introduced laws Investment restricting foreign – Foreign Direct Module companies from estate. (RDE-IED), on thebuying Centralreal Bank The law, which was introduced Information System (SISBACEN). very quietly in February, caused For the purposes of the Electronic hundreds of transactions be Statement of Registration,to foreign aborted mid-way. The foreign direct investment is deﬁned as companies also include permanent affected holdingswill in Brazilian those from other emirates. companies or, in accordance with common market practices, longterm ownership by non-resident FRANCEindividuals or corporate investors; TRANSACTION TAXES or UP entities residing, domiciled incorporated abroad, through IN 66 DISTRICTS ownership of shares or stock in Brazilian companies, or investments in foreign companies authorized to operate in Brazil. The statement implies that the Brazilian companies receiving the investment and/or the representative of the foreign investor are responsible for the registration. [Reported by: Daniela Antunes, Maxwell Alves Solicitors, The French Tax Administration www.maxwellalves.com] confirmed that 66 of 100 departments in France chose to DUBAI increase their house transfer tax TANWEER TO from 3.8% to LEGISLATION 4.5% between 1BE March 2014 and 29 February ANNOUNCED 2016. The increases are hoped toAhelp new departments property law badly aimedhit at by budget cuts over the last few improving investors’ rights years. The taxset is imposed on transactions looks to be announced soon for older property. in Dubai. The long-awaited Additionally, France’s Tanweer legislation will2014 be Finance Act specified that Majida large announced “soon”, says taxpayers will now be required to Ali Rashed, the head of the Real disclose their consolidated accounts Estate Investment Management and overseasCentre tax rulings. andany Promotion of the
More updates are available in our news section at www.opp-connect.com
GERMANY Dubai Land Department (DLD). LANDLORDS The industryTO hasSHOULDER been waiting 18 months for the law to be BROKER FEES
passed and legal experts gave their views on the draft to the Land Department last year, reports the National website. No speciﬁc details were available but Ms Rashed says it is ready and is being examined by higher authorities. The DLD ﬁrst announced in October 2011 that it was employing experts to examine and improve the real Germany’s government is looking estate investor protection law by to burden ofbut broker theease endthe of the year, to date fees for renters. High brokerage nothing has been ﬁnalized. commissions are driving up the [Reported by Adrian Bishop, Editor price of moving, with the renter of OPP Connect.] usually paying the broker fee even if the broker is hired by the landlord. Under the proposed FRANCE legislation, landlords would have CHANGE IN CAPITAL to pay commissions if they hire the broker. Justice minister Heiko Maas GAINS TAX said he planned to present a draft law by late March; check www.oppPresident Francois Hollande has connect.com for updates. announced a change in the capital gains tax system on second home sales to provide more ﬂuidity in the French property market. The taper JORDAN relief system is to be changed so NO MORE FOREIGN that from 2014 the required time of ownerships before a property DEVELOPERS? is completely exempt from capital The Housing Developers gainsJordan tax will be 22 years, down Association is encouraging from the 30 (JHDA) year system which was the to ban foreign ratiﬁgovernment ed in September 2012. and Arab developers from building Nicholas Leach, Partner at Athena residential projects in the Kingdom. Advisors, commented, “This could The call comes as after issues with be considered a bit of a U-turn post-sale maintenance. The by the government, reverting to president of theisJHDA toldtothe a system which similar that Jordan Times that several Iraqi when Sarkozy was in power. Last investors built housing projects year’s property tax changes put
Denmark’s government is planning to stop banks using theirtoproperty stock to According the Foreign Capital directly drum up business for Law, “Foreign capital is considered mortgages. Clients will instead to be any goods, machinery or be encouraged to findBrazil their equipment that enters own financing. Brokers will with no initial foreign exchange also be required to remove disbursement, intended for the monthly mortgage from production of goodspayment and services, advertising, showing just the and any funds brought into the selling countryprice. for use in economic
activities, provided that they belong
DUBAI to individuals or corporate entities FOREIGN domiciled orCOMPANIES incorporated abroad.” Foreign capital must be CAN’T BUY
Lawyers and accountants around the world tell us about new developments in the law. If you know of any interesting changes to the law or taxation in the country where you live or do business, contact
APRIL 2014 then settled in other countries – and the JHDA has since received complaints about construction faults. The association is also urging the government to restrict property investments to Jordanian companies only.
MALAYSIA BULK-BUYING TO BE CURBED
Housing and Local Government Minister Datuk Abdul Rahman Dahlan announced that the government is looking into ways to restrict investor clubs ‘bulk-buying’ real estate, which is creating false demand and rises in price. One idea is to stipulate than any developer selling in bulk would have to obtain permission from the Controller of Housing. The Real Estate And Housing Developers’ Association Malaysia (Rehda) has not objected to the plans.
PORTUGAL GOLDEN VISA AGREEMENT WITH CHINA
QATAR DEVELOPER REGULATIONS STRICTER Under new laws, builders and developers in Qatar will face penalties for violating norms. These include not handing units over to buyers within the agreed deadline; if the units do not meet the standards agreed in the contract; and if the developer does not start a project within six months of approval (without acceptable reasons). Penalities include heavy fines, losing license or even jail time. In addition, the law says that each project should have an independent bank account.
UK TWO AIS JUDGED ILLEGAL IN HIGH COURT The UK High Court ruled that two alternative investment schemes were being unlawfully operated. The schemes, promoted by Capital Alternatives and several other companies, are: African Land, which offers investments in rice farm harvests in Sierra Leone; and Reforestation Projects, which offers investments in carbon credits intended to be generated from land in Sierra Leone, Brazil and Australia.
VIETNAM FOREIGN OWNERSHIP RESTRICTIONS EASED
SINGAPORE STAMP DUTY SIMPLIFIED IN BUDGET Singapore simplified stamp duty charges in its 2014 budget. The structure of buyer’s stamp duty (BSD) has changed from a fixed rate structure to a percentage-based structure. BSD rates are now 1% for the first SG$180,000, 2% for the next SG$180,000 and 3% thereafter. Changes have also been made to the lease duty calculation to make it more consistent. The Inland Revenue Authority of Singapore has issued an e-Tax guide explaining the changes.
SPAIN GHOST PROPERTIES TO BE TAXED The Catalan government has approved a ‘ghost property’ tax bill in hopes of easing the region’s real estate problems. Banks owning properties that lie vacant for over two years will have to pay an additional tax (rates calculated by floor area). The tax is likely to affect at least 15,000 flats in areas with acute housing shortages, the government has said. Legislation should come into force in 2015.
The Vietnamese Ministry of Construction wants to make it much easier for overseas Vietnamese to own property in the country. The Ministry has proposed amendments to the housing law which would mean that overseas Vietnamese (or Viet kieu) would face virtually no restrictions on buying houses in Vietnam once they got permission to enter the country. Currently they can only buy one unit (house or apartment) after they’ve lived in Vietnam for six months. Foreigners would also be allowed to own property after they have obtained a work permit. Currently they have to fit restrictive criteria, like having a Vietnamese spouse or investing in the country. A controversial bill concerning apartments has also been removed due to public pressure. The proposed plan would have limited ownership of apartments to just 70 years, causing concerns among many apartment owners.
A Portugal association has made an agreement with China to avoid golden visa abuse. The Association of Professionals and Real Estate Enterprises of Portugal (APEMIP) have signed protocols with China after reports emerged of irregularities involving selling properties above the market price and illegal mediation. The Portuguese golden visa requires a real estate purchase of €500,000 to secure residency for a non-EU citizen and has attracted large numbers of Chinese buyers, who had secured 80% of the granted visas as of November 2013. The agreements were finalised at
the Portugal-China Property and Investment Road Show 2014.
EXPERTS ADVISE Spain’s distressed property Words | Christopher Nye
Dealing in distressed
With funds and big investors buying up Spain’s empty properties, we ask some experts what this means for the market
n most of the world, the pink pages are where you find financial news. In Spain ‘pink pages’ is what they call the over-excitable celebrity gossip magazines. But recently the most feverish excitement in Spanish media has been in the financial pages. Every day seems to bring fresh news of celebrity investors like Bill Gates and George Soros spending big on distressed property. They want the 500,000 to 700,000 empty properties left behind after the building boom went bust. Now, the market is clearly moving, with interest at all levels, from holiday homebuyers in northern Europe, residence for investment customers from China and Russia looking to buy a €500,000 property and get their ‘golden visa’, to huge institutional investors. The banks that held on to the
properties for so long are finally being forced by the new Basel III regulations to offload them at under the book value. Prices have dropped from the boom years at various estimates, but most agree at least 40%. In Catalonia
I believe we are seeing the first real signs of the market about to really accelerate the Government has approved a draft bill to tax financial institutions which own the estimated 40,000 properties in the region left empty for more than two years. The question is, who gets to sell
them now the market has returned? We asked some Spain experts how they would get hold of the bargain properties and what the arrival of fund investors means.
Where is the distressed property? Mark Stücklin: It’s around cities like Madrid and Barcelona, around provincial capitals and on the coast. The real problem is this stuff around the interior, because with a declining population there is no need for it. Whereas on the coast there is plenty of demand, it’s just a question of price. Peter Bowerman: There is still an abundance of empty properties for sale along the Costa Del Sol, but the figures reported often give the wrong impression of the market to investors who, armed only with
APRIL 2014 reports of thousands of empty properties owned by the banks, sometimes still make silly offers on (already 50% reduced) finished luxury apartments in great locations. Thousands of these empty properties are in unfinished developments in the middle of nowhere. These are the deals that the large investors are buying up at the moment; large corporate investors buy the whole development which they plan to finish and sell when the market returns. Around 50% of bank-owned property is in these unfinished developments which need so much investment that only corporations and large investment banks could fund them. We wouldn’t recommend small to mid-size investors buy in these projects, unless they like high risk or very long term investment. Because the whole development must be finished to high standards and the surrounding infrastructure completed to the satisfaction of the town hall before they will give any property in the development the final occupation license. Chris Mercer: I believe that a lot of the empty property we keep hearing about is in the large cities, which would not really attract the typical overseas buyer. It would be interesting to know what percentage of empty (finished) and un-sold property there actually is on the coastline. I doubt the figure would be very high and that places like Vallodolid, Madrid, Zaragoza etc are where the “swathes” of unsold apartment block are.
What sort of state is it in? Mark Stücklin: There is every sort. I am dealing right now with a lot of property that is half built – the structure is there but nothing else – right through to finished and ready to move in to. This is all bank stock
Cesar Garzon: Some of the properties have not been taken care of – and no rates, community of owners, utilities, etc have been paid in last years. The amount of work and hours one has to spend in a repossessed property is double or more that of a normal one. Buyers that buy distressed properties usually have a low budget – and not much money for legal fees. This makes things even more complicated. Sometimes documentation is missing, you have very tight deadlines and very short framework for negotiating as the rules are set by the bank. That doesn’t apply to all empty or distressed properties as some are sold through agents that carry out proper due diligence before putting the properties on the market.
a mid-term future, someone will buy it. But in the boom they went mad building without considering who would end up buying it, where the population was only increasing because of all the immigrants coming in to build the properties! Now they have all left and the populations are declining, getting
PA N E L O F
Is it dragging the market down? Chris Mercer: Not in our area, Murcia. We are really busy and had nine sales in January, 15 in Feb and already have eight half way through March! I believe we are seeing the first real signs of the market about to really accelerate, so much so that we carried out interviews this week for our sales team. Mark Stücklin: Not so much in the coastal areas. There is still a stock of empty developments that haven’t been sold in some tourist areas, for example the Costa Azahar, but in the more sort-after coastal areas like Malaga and the Costa del Sol the last three or four years has seen a steady liquidation of residential developments. There is still stuff left but not a huge oversupply and the half-finished developments are being finished and sold off. That process is well underway. Mark Stücklin: Around big cities like Barcelona, Bilbao, Seville, Valencia – where the economy has
Peter Bowerman: Sales Director, The Overseas Property Network +34 64 65 66 555, info@TheOverseasProperty Network.com Chris Mercer: Director, Mercers +44 (0)845 0177 805 +34 968 199 188 chrismercer@spanishproperty. co.uk Mark Stucklin: Owner, Spanish Property Insight spanishpropertyinsight.com Cesar Garzon: Principal, Spanish Law Consultants spanishlawconsultants.com +44 (0)207 8127 007 +34 677 536 142
Cesar Garzon: Not all the properties are attractive. Properties on the coast or big cities as Madrid have potential, but others located, lets say in Toledo or Zamora have no potential from my point of view.
and they have done another year of provisioning which means they can reduce their prices, but it depends what it is. If you want to buy in the interior where there is a huge oversupply relative to demand, then it almost has to be free.
EXPERTS ADVISE Spain’s distressed property older and it’s diﬃcult to see who’s going to buy it.
How is it being sold? Peter Bowerman: The bank staff have no real interest or motivation in selling individual repossessions, so thousands of them just get dumped together with minimal information on repo portals which are rarely updated and often ineﬃciently run. The banks send us long lists of repossessions which we then have to check through all the outstanding debts and paperwork to find a few possible deals. We then visit and value each property and, if the bank can meet our realistic selling figures, we start marketing them via our network of agents and websites. You would be surprised how few genuine deals we actually take on from these lists, as many of them are still way overpriced, unfinished or commonly illegally built developments without the correct licenses in place for final occupation. It takes us a lot of time and money to physically check each property and all the paperwork/ licenses before we find some genuine bargains to offer to our agents and clients.
Mark Stücklin: I am working with funds and banks to sell off these big portfolios. There are funds now looking at Spanish residential which have been sitting on the sidelines for years. These are big funds, but not the big institutional pension plans which are too risk averse, I am talking about funds that have a risk appetite. Then the idea is to sell them as quickly as possible. There are lots of mixes and strategies for selling, but the important thing is as soon as a fund takes a development and starts marketing and selling it they do a better job than the banks.
Do you get buyers looking for it and what do you tell them? Chris Mercer: Not really. We don’t have bank property anymore. We had a few and sold them. Peter Bowerman: Our largest share of sales are to lifestyle buyers and small to mid-size investors,
who we recommend concentrate on individual clearance sale properties, or remaining unsold blocks in some the more prestigious developments and established areas along the Costa del Sol. We can also offer some brand new luxury developments that the banks have recently completed to very high standards, yet are still selling at genuine clearance prices of around 50% reduction. These sort of deals offer luxury new build homes at bargain prices and are ideal for both lifestyle and small to mid size investors.
Are funds getting Golden visas? Mark Stücklin: For each golden visa you needs an escritura (deeds). So if it goes through a fund structure I don’t think it will work. But I know of funds from Asia that are buying property then reselling them in a golden-visa-compliant structure.
As soon as a fund takes a development and starts marketing it they do a better job than the banks Are there still opportunities for agents? Mark Stücklin: There is lots of really good property coming onto the market. The stuff that agents love: good to sell, nicely presented, good collateral, it will be huge improvement and agents will be delighted when good funds get their teeth into this product. There are 300 million northern Europeans and at least 100 million of them can afford to buy in Spain at today’s prices. And if you live in northern Germany, Scandinavia, I can see lots of reasons why they might buy.
How can agents get it directly from the banks? Peter Bowerman: We have worked with banks and law firms as a specialist forced sale agents for
26 years, so our good reputation and contacts mean we are regularly asked to value and sell these clearance deals. Stücklin: It is getting harder and harder to find finished developments ready for sale. It’s complicated and something I am really specialising in. You have to know who to talk to in each bank. And that might mean at a regional level. Who in the bank knows what they have got and what its worth and whether its worth spending any time on? Then you might also get it from administrators, banks, lawyers, developers on their last legs – there are all sorts of place you can find it.
Can a lawyer help you get access to it? Cesar Garzon: Anyone with good contacts in Spain can find good distressed properties. Lawyers usually have good relationships with local bank managers as they open accounts to their clients. That gives them direct access to the bank manager who will verbally tell him of the best bargains that branch has.
How do estate agents get properties from the funds? Mark Stücklin: Well, shortly at Spanish Property Insight! I know the funds, who is doing what, and as part of the funds I am working with I will definitely be helping them on the sales and marketing side. Otherwise, well, presumably a savvy fund, once it has acquired assets, will contact the agents in the area and let them know they have a good product to sell. Peter Bowerman: We are a master agent and forced sale specialist for many banks and law firms, we offer these bargains via our “Overseas Dreams” real estate company based on the Costa Del Sol and our forced sale and property clearance portal DistressedSalesSpain.com. We also have an ever expanding network of over 500 worldwide agents, if you are interested in becoming a client introducer please contact us via TheOverseasPropertyNetwork.com.
11 - 13 2014 SHANGHAI APRIL INTERNATIONAL 2014 REAL ESTATE AND PROPERTY INVESTMENT EXHIBITION
East Asia Exhibition Hall, 800 LingLin Road, Shanghai, China Central Hall, South Hall 5,000 square metres exhibition area Only a few booths left Over a hundred exhibitors, 50 mainstream media Sponsored by Economy of Shanghai & Hong Kong Magazine
The next expo will be in November 2014 we look forward to hearing from you
FOR FURTHER QUESTIONS ON EXHIBITING, PLEASE CONTACT: +86 18018650120 Ken | +86 21 31121829 Jacky CN_overseasexpo@163.com
NEWS Investment regulations Words | Guillaume Fiastre
Don’t Miss the AIFMD Boat
The transitional period for the Alternative Investment Fund Management Directive is coming to an end, but many fund managers are unaware that it affects them
he transitional period provided by the Alternative Investment Fund Management Directive (AIFMD) comes to an end on 22 July 2014. By this time, UK alternative investment fund managers need to have registered with the FCA and be compliant with the directive. Those operating in other EU jurisdictions face similar requirements but different – often tighter – deadlines. The FCA has said in the past that it needs three months to consider an application, with possible extension to six months. So, in theory, many alternative investment fund managers (AIFMs)
are getting close to missing the boat. However, at the end of 2013, HM Treasury said that if registration is submitted with suﬃcient time for the FCA to determine the application by the deadline, the fund manager will be able to continue managing their funds until the application is granted. So there are still many questions without answers. For example; what is suﬃcient time? If many fund holders have yet to register, there is still likely to be a massive backlog. This could be a real problem for those companies which were unregulated before now as there may be further clarifications and
GUILLAUME FIASTRE CEO of Taliance www.taliance.com Taliance is an IT systems developer and vendor who design and develop solutions for professionals in real estate and finance.
demonstrations needed. It’s still not clear what will happen to those managers who apply but don’t obtain authorisation by 22 July. The really worrying aspect is that many AIFMs still don’t realise the all-encompassing scope of the new regulations. They are still blissfully ignorant of the need to register. Others have taken a ‘head in the sand’ approach, hoping for changes
Does AIFMD Affect You? The Directive regulates: EU alternative investment fund managers (AIFMs) that manage alternative investment funds (essentially hedge funds and private equity funds) (“AIFs”) (wherever the funds are based); AIFMs (wherever they are based) that manage AIFs established in the EU; and AIFMs (wherever they are based) that market the units or shares of an AIF in the European Union. According to the UK FCA, “The scope of the AIFMD is broad and, with a few exceptions, covers the management, administration and marketing of alternative investment funds (AIFs)”. Small scale registered AIFMs (up to €100/500 million) are subject to slightly different, and less stringent, rules – but they still need to register. The AIFMD will mean certain fund managers are being regulated for the first time.
on organisations of all sizes, but especially smaller firms with fewer internal resources to deal with the initial and ongoing responsibilities. The impact of AIFMD on technology and data management is higher than what most firms expect. The ubiquitous spreadsheet is becoming inadequate and is gradually being replaced by software platforms which provide a central database. These also enable business data modelling and forecasting to help anticipate risk. It’s not surprising that AIFMD is said to be bringing an ‘avalanche of change’ in its wake. But there will be business rewards in addition to compliance. AIFMs will be able to demonstrate that they are in total control of their investments – and there’s really no better way to reassure clients that their money is in safe hands.
What is an Alternative Investment Fund? An alternative investment is an investment in asset classes other than stocks, bonds and cash. The term is a relatively loose one and includes tangible assets such as precious metals, art, wine, antiques, coins, or stamps and some financial assets such as commodities, private equity, distressed securities, hedge funds, carbon credits, venture capital, film production, financial derivatives and the like. Importantly for our industry, the definition also includes investments in real estate and forestry. By the The Alternative Investment Fund Managers Regulations 2013, an AIF is “a collective investment undertaking ..., which (a) raises capital from a number of investors, with a view to investing it in accordance with a defined investment policy for the benefit of these investors; and (b) does not require authorisation pursuant to Article 5 of the UCITS directive.”
at the last minute to exclude them. From its conception, the AIFMD has been controversial and divided opinion. For example, in a study of asset managers by Deloitte in 2012, 72% said that they viewed the directive as a ‘business threat’. But there is another side to this particular story. The new European passport will allow AIFMs to market to professional investors in EU member states without the need to adhere to the complex rules of each different nation. Despite the negative reaction of respondents to the Deloitte study, it is noticeable that 41% still said that they intended to use the passport to extend fund distribution. One of the main benefits of the passport for EU AIFMs is that it will protect them from non-EU competition for a short time. It’s possible that US companies and
others from outside the region may be able to apply for authorisation under the passport system after 2015, although it has not yet been decided whether to extend availability to non-EU AIFMs at all. Consequently, EU AIFMs have a window of opportunity to gain competitive advantage. But AIFMD demands for more than just registering and compliance is not an easy task. There are four key business areas in particular that need scrutiny: risk management practices; transparency; capital requirements and ratio calculations and investment strategies. AIFMs will have to reshape the way they manage risk. Instead of basing investment on past performance they must now be able to anticipate the consequences of risk in their portfolios, forecast future trends and move from descriptive tools towards more predictive analytical tools. The directive demands more frequent, deeper and more responsive reporting, reflecting investors’ needs for more complete, accurate and appropriate information. Fund managers will need systems capable of handling more information faster and ones that can present it in an easy-tounderstand format. AIFMs are also required to maintain certain capital levels depending on the value of Assets Under Management (AUM). They will need to run calculations of several ratios (leverage, solvency, liquidity, for example) to attract major investors. These must reflect degrees of volatility in order to assure solvency and liquidity in case of future downturns. AIFMs also need to consider the different investment vehicles introduced to the European market over the past years. All of these vehicles vary in asset composition, capital requirements, liquidity levels, valuation requirements and so on. For this reason, assessing current investment strategies and selecting the right investment vehicles will be a key element of the compliance process. All these demands put pressure
Mortgages in Ireland Can a foreigner obtain a mortgage in Ireland? What types of mortgage are available? Type of mortgage
Interest rates from
Maximum Term (Years)
Max Age at Repayment
Hybrid (part fixed, part variable)
Buy to let (assessed on rental income)
What is the lending criteria? This depends on the individual mortgage provider, however typical lender requirements for Irish mortgages can be found below: Affordabilty requirements: This is assessed on a case by case basis and differs by lender. Employment history: Minimum 12 months required. Self employed history: Mortgages are not currently available to self employed applicants. Regions accepted: All regions are considered in mainland Ireland. Property types accepted: Existing properties and new builds. Applicants accepted: Individuals only. All nationalities considered except those affected by international sanctions.
Further information Currency options for mortgage paymernts: euros only. Some lenders will require you to open up a bank account. Securing a mortgage offer can typically take between four to six weeks.
The OPP monthly mortgage report is brought to you by Connect Overseas, international mortgage advisers. They are based in the UK but deal with mortgages in over 50 different countries around the world. See www.connectoverseas.co.uk. They can be contacted by email at firstname.lastname@example.org or by telephone on +44 (0)1708 676134.
This guide was accurate at the time of production.The mortgage market changes all the time. For more industry reports see:
FEATURE A new exhibition Words | Nigel Ayres
A new world for expatriates
Nigel started World of Expats in September 2013. His first event is this autumn in the UK. Here he talks about launching a new expo
he expat market is huge. The UN estimates that 215 million people lived and/or worked outside their home country in 2011. Around 400,000 people leave the UK each year (and, averaged out, a similar number return each year). What is more, there is no such thing as a ‘typical expat’. A wider range of people than ever are looking to live and work abroad, for any number of reasons. However these can be broken down into: International assignees, moving with their own company as part of career development or to meet speciﬁc business needs. Globally mobile jobhunters, those individuals seeking a job or contract abroad as part of desire to travel or through economic necessity. Young people, travelling before settling down to their career (84%
of students say that they would like to work abroad at some point in their career). Retirees and other mature expats looking for a higher quality of life or simply a better climate. Investors in property overseas, looking to buy a property as a second home or to live in as their primary residence as part of a decision to live or retire part or full time abroad. Emigrants, looking to permanently migrate to a new country, such as Australia, New Zealand or Canada. Having built the website (covering 176 destinations and with over 5,000 pages of content) and with traﬃc growing steadily, we began to consider how to create an event that would meet the needs of this diverse range of expats. We found that, although there is a range of
NIGEL AYRES: Founder and CEO email@example.com
I quickly saw that the industry is very closeknit. One door leads to several others
People move abroad for career, lifestyle or economic necessity events handling niche aspects of the market, none cater to the full range of expats nor the myriad issues they face. My vision was therefore to create an event that met the needs of a wide range of expats and all stages of the expat lifecycle.
Experience is not enough
‘Gamification’: engaging visitors in the event by making it feel more fun Gamification How could the event become truly interactive and what technology is available to help in achieving this? Various buzzwords are heard in the event industry today, one of these was ‘gamiﬁcation’. What on earth did this mean? Boiling a complex idea down it basically meant engaging visitors in the event by making it fun, introducing competitions and other ways of making it feel more like a game than an eﬀort. In other words, how do we ensure that people go home having a good day out rather than simply feeling they obtained good advice and made some useful contacts. We came up with some ideas:
Spreading the word Getting the word out is key and traditional online marketing as well as social media are an important part of this. Finding the right partners is another key element and something I’m putting a lot of time and thought into – it’s not an area to “hope for the best” in! With the ﬁrst event in September there is still an enormous amount of work still to do and an experienced event management team has been brought together to ensure that it is eﬃciently delivered. We are looking forward to oﬀering visitors the expat show they have been waiting for and are already planning further shows for London and Birmingham in the UK and in New York, Houston and Chicago in the US.
Launched in September 2013, World of Expats is the ﬁrst destination for expats. The site provides a combination of destination speciﬁc guides for expats, together with information and advice covering all of the issues faced by expats, as well as tools and access to services. www.worldofexpats.com
I have lived as an expat in Hong Kong, Malaysia, twice in California and was co-founder of The Forum for Expatriate Management; but while I recognised the needs of international assignees and those seeking to ﬁnd a job abroad, I needed to understand the international property market better. My ﬁrst instinct was to ﬁnd a partner with an existing highproﬁle property event who would let us to run an event catering to the wider needs of expats alongside their own existing event. Despite promising discussions, this proved unachievable. So we decided to create a new Property Show as an integral part of the World of Expats Show. This will look primarily at relocating expats, but also at those looking to buy property as a second home or as an investment. Building an understanding of how the international property market works has been greatly helped by discovering the resources of OPP while attending OPPLive, attending a series of industry events and using the facilities and expertise of Peter Robinson at AIPP. I also quickly observed that the industry was very close-knit and each door
that opened tended to lead to several others at the same time. The event’s design could not simply rely upon covering a wider range of issues, however, and so I began to look at various aspects. There is a range of needs for expats and there is an overlapping series of Venn diagrams representing the needs of each category of expat. The event needed to be structured to make it easy to ﬁnd what the visitor is looking for.
An event app to engage visitors with exhibitors and sponsors and with other attendees both before and during the event. Social media, to create games in the build up and during the event. Seminars and other presentations should give the advice that is needed, but should also ensure that they entertain. Celebrity expats, for example, will be entertaining and talk about the lifestyle, while other experts can provide any guidance needed. Feature areas should engage people with fun activities that are also useful. A networking area where people can meet others who have lived or also plan to live in their planned destination.
For more information, call +44 (0)208 545 4910 or e-mail firstname.lastname@example.org Official stand design and production partner for
FEATURE Russian myths
Not just oligarchs, not just Moscow
Hotter than a 3D printer or Google Glass, the must have item for 2014’s global estate agent is a Russian buyer
Myth 1: Bring me an oligarch! While Russia has indeed bred 111 billionaires (Forbes) and oligarchs such as Chelsea FC owner Roman Abramovich it is certainly not only Russia’s super rich buying homes abroad. In Russia, 84% of homes are owner-occupied; far above the UK and US and almost double the rate of Germany. This is because the state, after the breakup of the USSR, essentially gave people the homes they lived in. Therefore, very few Russians have a mortgage on their property and only 26% of the two million new homes built in Russia last year were bought with a mortgage. So Russians have been using their high disposable wealth to buy property overseas. Carlo comments, “Developers and agents often shy away from marketing to Russians because they don’t feel they are active in the mass market. However, the truth is that this top stratum only accounts
CARLO WALTHER: www.idinaidi.ru email@example.com for a small proportion of all second home sales and it’s the Russians with more sensible budgets that agents and developers from around the world should be targeting to increase sales.” The latest data from Idinaidi (Feb – March 2014) echoes Walther’s observation, with the average values of properties searched for on Idinaidi’s international
illing the quiet times after the global crisis, Russian overseas property buyers have increased signiﬁcantly in recent years with some 400,000 owning property in Bulgaria alone. Indeed, with 144 million people enjoying a booming economy and a local property market with high rates of home ownership, selling overseas property to the Russians should be easy. However, ﬁnding and servicing clients in the largest country on the planet has many challenges, including the language barrier and a market of primarily ﬁrst time buyers. But as Carlo Walther, a Muscovite and COO of Russia’s fastest growing property portal Idinaidi.ru explains, there are many misconceptions about Russian overseas property buyers – and in order to succeed it’s important to understand the market.
FEATURE Russian myths section in emerging markets such as Turkey and Thailand costing less than €150,000. The increasing search volume at this price point reﬂects the more modest budgets of everyday Russians, whose investment in overseas property has increased consistently since 2009, with Central Bank of Russia ﬁgures showing that Russian took out twice as much money to spend on overseas property last year than they did four years ago.
Myth 2: They only want prime central London While London remains a favourite for high net worth Russian buyers – Knight Frank identiﬁed them as the biggest foreign buyers of homes valued at over £1m in the capital during 2013 – it is not their only second home choice. Russians are the biggest foreign buyers in Bulgaria, Turkey, Montenegro, Cyprus, Greece, parts of Spain, and are increasingly in Thailand and the Caribbean. What’s remarkable is how quickly Russians who, 20 years ago, had not even bought property in their own country are becoming important to agents and developers worldwide. Carlo comments: “Bulgaria has been attracting Russian interest in its property market for some time, to the point that Russians are now the main source of overseas buyers in Bulgaria. Real estate there is still fantastic value, making it a popular choice with mid-range buyers.”
TOP 10 MOST SEARCHED FOR OVERSEAS
Destinations on Idinaidi.ru: 1. Spain 2. France 3. USA 4. Bulgaria 5. Turkey 6. Italy 7. Thailand 8. Montenegro 9. Greece 10. UK
I D I N A I D I - P R O P E R T Y R E N TA L A N D S A L E S P O R TA L , R U S S I A Idinaidi is Russia’s national real estate website and the fastest growing property portal in Russia. It lists over 650,000 properties across Russia and 30,000 overseas, partnering with 8,000 of the most active real estate agents in over 120 cities. Launched on 1 February 2013 by Carlo Walther, who spent ﬁve years with Rightmove, and Stephen Inscoe who has lived and worked in Russia for over 10 years, the site has been used by over 9 million property hunters and currently receives over 1.4 million visits each month. Idinaidi lists over 30,000 overseas properties and also boasts the most read real estate blog in Russia, as well as being the most followed real estate site on the country´s social networks. For more information about listing your international properties on Idinaidi visit www.idinaidi.ru or contact Carlo.Walther@idinaidi.ru.
A short hop across the Black Sea, Turkey attracted 2.8 million Russians in the ﬁrst three quarters of 2013 alone. Property in Turkey is cheaper than in many parts of Russia and the cost of living is low. While the super-rich may be enjoying their view of the Thames or Central Park, many Russians with more modest expenditure limits are looking to take advantage of the bargains to be found around the world. There is also the prestige of owning a second home abroad. Spain is also popular because of its golden visa, says Carlo: “allowing non-EU citizens to obtain residency for themselves and their immediate family in return for investing a signiﬁcant amount of capital.”
Myth 3: Second properties are just for investment While many Russians may be diversifying their investment portfolios via property in ‘safe haven’ destinations such as the UK, by far the majority are simply looking for a holiday home. Russians have a long tradition of second home ownership with over 50% of families living in large cities owning dachas. Designed as recreational getaways for city dwellers, dachas have remained popular as Russia continues to develop economically an increasing number are in eﬀect upgrading their dacha experience and buying
a property overseas. For many, purchasing a home in say Bulgaria or Spain will be the ﬁrst time they have bought a property so ensuring a simple buying process and good customer service is essential. Equally, the good reputation of a developer or agent is important as is the correct pricing of a property .
Myth 4: Russia = Moscow Russia being so big, it’s hard to know where to begin targeting buyers and partners. Too many overseas agents and developers limit themselves to the capital which, although the largest city in Europe, with 77 resident billionaires, is not the only city. St Petersburg is the 4th largest city in Europe, and Russia has another dozen cities with populations over 1 million. Moscow only accounts for 15% of the four million real estate transactions within Russia each year. Carlo says: “Moscow is indeed a logical place for overseas property developers and agents to start their marketing, but they should not be restricted by the city limits. Russia’s wealth is rapidly spreading across the nation so cities such as Kazan, Novosibirsk and Yekateringburg should also be strategically targeted in any promotional campaign. Idinaidi’s reach extends over 120 Russian cities from west to east for this very reason.”
“ Asia is the growth engine and source of investment overseas ” ADAM
WU CHIEF OPERATING OFFICER, CHINA BUSINESS NETWORK (CBN)
“ Investors in real estate are still around. OPPLive Asia 2014 is a good opportunity to find them! ” THIJS
STOFFER CHIEF EXECUTIVE OFFICER INTERNATIONAL CONSORTIUM OF REAL ESTATE AGENTS (ICREA)
“ I am privileged to be speaking on a topic of great relevance ” JEFF
FOO PRESIDENT, THE INSTITUTE OF ESTATE AGENTS, SINGAPORE (IEA)
“ I’d encourage real estate professionals to attend OPPLive Asia ” THOMAS
DIRECTOR, RE/MAX SINGAPORE
REGISTER NOW AT WWW.OPP-LIVEASIA.COM PLEASE CONTACT US FOR MORE INFORMATION ON ATTENDING OR EXHIBITING AT OPPLIVE ASIA 2014: UK: +44(0) 203 540 2224 SINGAPORE: +65 6679 7733 CHINA: +86 (0)10 6581 6820
COUNTRY REPORT Greece
Greece: back in the game? G
reece is a country steeped in rich culture and history. Classical Greece (1200800bc) was the home of the most incredible scientiﬁc, philosophical, economic and literary minds of its era – a fact which still colours the country today in its many museums and ancient architectural examples. The Greek language has remained almost unchanged for nearly 4,000
At its peak, Greece saw 17m visitors; an achievement for a country with a population of 11m years, an achievement which only China can challenge. Nowadays, Greece draws in millions of visitors per year. At its peak in 2007, it saw 17million international arrivals; quite an achievement for a country with a population of under 11million. It’s easy to see why: much of the country is almost idyllic, with sweeping white beaches, vast olive
orchards, instantly-recognisable architecture and an eﬀusive, friendly population. Economically, though, Greece was perhaps the worst casualty of the Eurozone crisis. The country went suddenly from a growing economy (albeit under scrutiny after a fudged EU entry and 2005 austerity measures) to a cash-strapped, protest-plagued disaster. In the Autumn and winter of 2009, the extent of the financial crisis was revealed and
Greeks took to the streets as dramatic cuts took effect. Since then the country has stayed in the news with two bail-out packages, debt defaults, further protests and riots, numerous strikes, rising unemployment and alarming reports of fascist parties gaining a foothold. In March, the possibility of a third bailout was floated, though it is expected to have a less dramatic effect on market confidence than the previous loans.
Area: 131,940km² Similar to: Nicaragua, North Korea Coastline: 13,676km, with 221 inhabited islands Capital: Athens (pop: 3.2 million) Highest point: Mount Olympus 2,917 m Climate: Hot, dry summers. The east coast sometimes gets dangerously strong winds called Meltemi during the summer, which can disrupt travel plans. Cool, wet winters. Looks like: Greece is varied in terrain. The north of the country features swathes of forest, while the south has the beaches, mountain ranges, wine valleys and olive orchards.
Population: 10,773,000 Average age: 43.2 years Ages: 0-14 = 14%; 65+ = 20% Life expectancy: 80 years Ethnicity: Greek 93%, Foreign citizens 7% (2001) Religion: Greek Orthodox (oﬃcial) 98%, Muslim 1.3% Politics: Greece is a parliamentary republic. Between 1974 and the Greek debt crisis, it was dominated by the centre-right New Democracy, which is now in coalition with the Panhellic Socialist Movement, though that may not survive until the next election in 2016. There has been international concern over the rise of the ultranationalist Golden Dawn party, but they’ve never gained more than 7% of the vote and are now in legal trouble. New party The River has been gaining centrist support.
THE ECONOMY GDP: $266 billion – down from $341.6 billion in 2009 Inﬂation: -0.8% Based on: Service sector, tourism, food and beverage exports Public debt: 175% of GDP – the third highest in the world Tax: 43.7% of GDP
Corruptions Perceptions Index: 80 out of 177 countries
Human Development Index:
29 out of 165 countries
Ease of Doing Business Index:
72 out of 189 countries
COUNTRY REPORT Greece
TOURISM Tourism is a vital part of the Greek economy, accounting for 16.4% of the country’s GDP as of 2012. Some ministers predict an eventual contribution of 20%. With its Mediterranean climate, ancient ruins, museums and galleries, Greece has long been a hit destination, but following the crisis there were worries that
tourists would be unable to get cash from ATMs. Not-for-proﬁt organisation Marketing Greece (www.marketinggreece.com) has been recording positive signs for Greek tourism. Though visitor numbers took a signiﬁcant hit in the wake of the ﬁnancial crisis, tourism is deﬁnitely on the up again – and even breaking new records. The
organisation has recently launched www.discovergreece.com in hopes of further bolstering tourism. International arrivals to airports went up 21.5% year-on-year to October 2013, totalling 847,000; the most Autumn tourists Greece has seen. Foreign visitors in Jan/Feb of this year saw an increase of 28.8% year-on-year.
Number of international arrivals 17400000 17200000 17000000 16800000 16600000 16400000 16200000 16000000 15800000 15600000 15400000 15200000 15000000 14800000 14600000 14400000 14200000 14000000 2005
APPROXIMATE FLIGHT TIMES TO ATHENS
Rio de Janeiro
Residential real estate
Figures keep falling T
he Greek economy collapsed four years ago and since then residential property prices have plummeted by 32%, according to oﬃcial ﬁgures (some estate agents say that the actual ﬁgure could be closer to 50%). Another startling decline came in the number of transactions: Athens saw over 250,000 sales in 2005 (though this was bolstered by the 2004 Athens Olympics). In 2013, there were only 3,600 transactions. Despite the government’s soothing noises, it would seem that the Greek market hasn’t ﬁnished its decline yet. While some predict the bottoming out to come later this year, and some say it will be far later, it’s pretty certain that the market will continue to struggle in the short term. Fitch has predicted a total decline of 42%. Foreign buyers are naturally showing interest in Greece, eyeing luxurious properties going for a fraction of their original prices and taking advantage of low interest rates. While this could provide short-term relief for some agents, an over-reliance of foreign investment in the country could prove damaging in the long term.
RESIDENTIAL PROPERTY FACTS Price (sq.m): €3,536
Rental Yield: 2.87%
Income Tax: 2.75%
Roundtrip Cost: 11.73%
Cap Gains Tax: 10.00%
Landlord and Tenant Law: Neutral Source: Global Property Guide
Property tax free amount which is €300,000, whereas the higher rate applies for values exceeding €1million. The ENFIA has been subject to strong criticism as being unfair and in violation with the Greek Constitution. It remains to be seen whether it will be implemented in its current form or will be subject to further amendments in the near future. www.zeya.com
Tax changes can be tricky
Property tax in Greece has been the subject of much controversy in recent months. Konstantina Kalakou and Myrto Stavrinou from Zepos & Yannopoulos, one of the most prominent law ﬁrms in Greece, explained the new rules on residential taxation. The Uniﬁed Real Estate Tax (hereinafter ENFIA) is the new annual property tax that applies as of 1 January 2014. ENFIA was introduced to substitute previous property taxes as well as to raise government revenues on property from €2.486billion in 2013 to about €2.65billion in 2014 as per the Explanatory Report of the new property tax law. It burdens both individuals and legal entities holding Greek real estate properties on 1 January of each year. It was supposed to be a uniﬁed tax, yet it comprises two taxes; the main and the supplementary tax. The main tax applies on each property separately and is computed based on a formula which varies depending on the type of the real estate asset, on its location and on various other parameters set in the law. The supplementary tax applies on the total value of the real estate held by the taxpayer. It is calculated on the basis of diﬀerent tax rates for individuals and legal entities, whilst there are various exemptions from the supplementary tax that do not apply similarly to individuals and legal entities. For individuals, the supplementary tax rates vary from 0.1% to 1% and apply based on taxable brackets. There is also a tax
EVENTS OPPLive Asia
The global property industry gets together in Singapore to learn, network and do business
eminars are only one of the reasons to visit OPPLive Asia, but whether you are an industry expert wanting to ﬁne-tune your knowledge, somebody absolutely new to the world of international real estate or you fall somewhere in between, the seminar programme at OPPLive Asia has a lot to oﬀer. With sessions such as a general review of the world real estate markets in 2014 through to very tightlyfocused topics such as an analysis of the world’s hotspots for student accommodation, there will be plenty of opportunities for everybody to improve their knowledge of our industry.
Destinations 23 APRIL
11.00-11.30: Destination USA What is selling? Who is buying? What next for prices and yields? What are the risks? How to protect your clients. Speakers: Garrett Kenny, CEO of Feltrim; Robert Gavin, CEO of North Dakota Developments
12.20-12.50: Destination Bali What is selling? How much can you earn? What do the experts predict? Where is best? What are the risks? Speakers: Dan Miller, head of Jones Lang LaSalle Bali oﬃce; Tom Hauesler, CEO/Pres of Latitude 1.1 Group.
Top speakers from all over the world will be sharing their knowledge and experience with you. Spread over the two days of the show and three separate seminar theatres, the seminars are well spaced out to allow participants to network, both generally and with the other people attending that particular seminar. The programme follows ﬁve themes: Destinations, Sales, Marketing & Technology, OPPortunities and Developer. It doesn’t just cover selling real estate, but will also give you solid, in-depth knowledge on immigration, investment, ‘alternatives’ and some of the cultural issues that can get in the way of business.
13.00-13.30: UK - Market Report What is selling? Who is buying? Will non-residents be able to circumvent CGT? What will prices and yields do next? What are the big selling product niches? Just how strong is the student accommodation proposition? Speaker: Ben Elder, Global Director of Valuation at Royal Institution of Chartered Surveyors (RICS)
16.20-16.50: Thai Property Update What is selling? How much can you earn? What do the experts predict? Where is best? What are the risks? Speaker: Simon Derville, Deputy Vice President – Business Development, Raimon Land
Destinations 24 April 12.20-12.50: What Next for Prime London? How will CGT impact on prime London sales? Who is buying now and where? What will the Government do next? How much can you earn? Do you need partners? How do you get them? What is the impact of Crossrail and HS1? Will immigration restrictions happen and have an impact? Speaker: Ben Elder, Global Director of Valuation at the Royal Institution of Chartered Surveyors (RICS)
15.00-15.30: Malaysian Property Market Outlook 2014 What is selling? How much can you earn? What do the experts predict? Where is best? What are the risks? Speaker: Siva Shanker, President of the Malaysian Institute of Estate Agents
Sales 23 April 11.00-11.30: Investing in the Philippines Property Market With Philippines property investment on the increase Johnny Chng will be discussing which projects are selling and are there any risks investing in the Philippines? How much can agents and investors earn and his predictions for the future of this market. Speaker: Johnny Chng, Head of International Projects Department at OrangeTee
14.20-14.50: The Singaporean Market for International Real Estate The Government of Singapore has been introducing cooling measures to calm down its overheating property market. In the meantime there are up to 20 international property exhibitions every weekend in Singapore as Singaporeans begin to invest heavily outside of the country. This session will look at the state of the Singaporean domestic property market and considers what might happen over the next few months and years. In particular, we analyse how this might impact on the international property buying market. Speakers: Singapore expert Denka Wee; John Howell, Editorial Director of OPP
16.20-16.50: The World of International Real Estate 2014/2015 Globally, real estate sales in 2013 were over US$20 trillion. International transactions were worth about US$1.5trillion. Who was buying? What were they buying? Where were they buying? Why were they buying? What will the market look like in 2015 and beyond? How can you get involved? Speaker: John Howell, Editorial Director of OPP
Sales 24 April 13.00-13.30: Selling International Real Estate to Local Clients Selling international real estate to local clients presents unique challenges and often requires a totally diﬀerent skill set. This session looks at those diﬀerences and how to maximise revenues from this extremely lucrative market. Speaker: David Cheong, Principal Trainer and Director of Real Centre Academy (RCA)
14.20-14.50: Investor Spotlight Meet BIG investors and hear what they have to say about risk, lessons they have learned, their successes and their preferences. Hear how their behaviour has changed and where they are now putting their money.
15.00-15.30: Where Risk Meets Reward – Understanding International Property There are some great opportunities around the world and a lot of overpriced and dangerous rubbish. How do you decide what to sell? How should your clients decide what to buy? How do you ﬁnd the “sweet spot” – the best balance between risk and reward? 30 years’ experience crammed into 30 minutes! Speaker: John Howell, Editorial Director of OPP
15.00-15.30: Selling Local Property to International Clients With local prices rising fast in many markets, the pressure is increasing to ﬁnd new revenue sources from the international buying community. In this seminar you can learn the skills to attract foreign buyers to your local business and then to sell to them successfully. Speaker: Thomas Tan, ReMax SG
15.40-16.10: Selling International Property in Singapore – Must Do’s, Can’t Do’s and Best Practice Selling international property in Singapore is more complicated than in many other markets. This is understandable. The government and the CEA have seen too many Singaporeans putting money into what look like high risk investments. The CEA’s March 2014 Practice Guidelines set out rules that you MUST follow – whether you are a local KEO or agent or an overseas developer or master agent wanting to sell in Singapore. How can you make it as easy as possible to comply with the rules? Are the CEA rules a model for the rest of the world to follow or a step too far? Speakers: Denka Wee, Head of Business Services at Dennis Wee Realty; John Howell, Editorial Director of OPP
EVENTS OPPLive Asia
15.40-16.10: The Singaporean Property Market And How It Impacts on Outward Investment With as many as 20 international property exhibitions every weekend in Singapore and with Singaporeans investing heavily outside of the country, this session will look at the state of the Singaporean domestic market, what might happen over the next months and years and, in particular, how this might impact on international property buying. Speaker: Christine Li, Head of Research and Consultancy at OrangeTee
Marketing & Technology 23 April 11.40-12.10: How Futuristic-Looking Technology Can Help You Sell More Houses… Today The use of Augmented Reality, Virtual Reality and 3D Printing is exciting property developers on a worldwide basis and globalising their marketing eﬀorts. James will talk about technologies such as Virtual Reality, Google Glass, Helicopter Drone Flying, 3D Printing and Augmented Reality. Speaker: James Dearsley, founder of the Digital Marketing Bureau
13.40-14.10: Building Credibility For Your International Property Company How to build credibility for your international business. Looking at association memberships – what are the beneﬁts? What makes an award-winning property and how to make your award entry stand out from the crowd. Plus the use of tone and language in your marketing materials – what works and doesn’t work in diﬀerent countries and cultures? Speaker: Ensign Media
15.00-15.30: Crisis Planning for Property Investment – Communicating Through a Crisis Speaker: John Morgan, President and CEO, Asia, of Hill+Knowlton Strategies
Marketing & Technology 24 April
11.40-12.10: Social Media and the Modern Real Estate Professional Does social media really help you ﬁnd buyers? If it does, is it worth all of the time it takes to do it properly? Should you manage your own social media or outsource? Answers to these questions and more along with a guide to the very latest social media strategies for real estate professionals. Speaker: James Dearsley, founder of the Digital Marketing Bureau
12.20-12.50: The power of digital Why is digital important to agents and developers? How to make it work for your business. Speaker: Jamie Morse, MD of Hill+Knowlton
OPPortunities 23 April 16.20-16.50: The Global Student Accommodation Sector Where are the global hotspots? What do the experts predict for the sector? How can agents make money from marketing student accommodation? Speaker: Julie Harvey, International Sales and Marketing Director for Pinnacle MC Global Network
OPPortunities 24 April 11.00-11.30: What’s New with Global Visa Programmes and How Can They Make you Money? What programmes are there? What are their key characteristics? What are the risks? What is in it for the client? What is in it for the agent? How do you get started? Product provider presentations. Speakers: Garrett Kenny, CEO of Feltrim; Thijs Stoﬀer, CEO of ICREA and MD of OPP Group
What makes an award winning property and how to make your entry stand out from the crowd Developer 23 April 13.40-14.10: The Power of Global Connections Insight into how to build your global connections through diﬀerent media. Exploring and giving examples of how connections have grown companies from national to international, how to ﬁnd business changing connections and the challenges you may face and how to overcome them. Speaker: Jeﬀ Foo, President of The Institute of Estate Agents, Singapore (IEA)
Developer 24 April 13.40-14.10: Marketing to the Chinese Learn about the key characteristics of Chinese buyers. Why are they buying? What are they buying? How are they buying? Where are they buying? How do you reach them? How are sellers regulated? Speaker: Adam Wu, CEO of China Business Network
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Wish you were there? The exhibitions and events of February to March Leisure Real Estate Summit OPP Editor Chris Nye with John Mather, Gil Summers
Where: The Montcalm Hotel, London When: 27 February 2014 Attendees: 100+
OPP attended the Leisure Real Estate Summit and chaired a panel on retirement overseas. The LRES is held in a smart hotel in central London, convenient for Selfridges if the content starts to drag. On the whole though, it doesn’t. It isn’t an exhibition – there were no stands – but throughout the day from 8.45am to 6pm there are debates and presentations on all aspects of how to plan, develop, sell and manage a successful hotel and resort development. It kicked oﬀ with James Wallman, author of Stuﬀocation, explaining why people increasingly want to buy good times – leisure – rather than mere ‘stuﬀ’. There were plenty of pit stops, with good food, and excellent opportunities for networking. Our reviewer: John Mather, CEO Thor Estates Was it your ﬁrst time at this event? No, the second time . It was more relevant this year and the speakers were of a higher quality. What did you think of the venue? Good, it works. Was the show big enough? If anything they packed too much in! You can get a bit overwhelmed. Was the quality of attendees good? Yes. What was the most interesting presentation? There was a very good one on the impact of ﬂight traﬃc. [Competitive airlift and its strategic eﬀect on property markets: Luis Carmo Costa, Neoturis] What could the organisers have done better? They need to keep to the time, some people overran and others had to rush. The Rightmove survey [What’s happened? Where? The psychology of the market] was great but the information could be more international. Was attending good value for money? Yes. There were lots of good networking opportunities. If I’d known a few of them were attending beforehand there would have been even more!
ITB, Berlin, Where: Messe Conference Centre near Charlottenberg, Berlin When: 5-10 March 2014 Our reviewer: John Howell, Editorial Director, OPP Internationale Tourismus Borse (ITB) is the world’s largest tourism event. This year’s was as good as ever, with glowing reports from both the main event and the ITB Conference, and plenty to teach our industry. ITB Berlin followed on from the International Hotel Investment Forum, using all 190,000m2 of the conference centre, with 10,000 exhibitors from 200 countries. The ﬁrst three days are industry only and the last two open to the general public, with a total of 200,000 visitors expected. You can explore everything from cruises through medical care to emerging destinations – and be prepared to party. For the international property industry, the most interesting part is the ITB Conference, where over 20,000 senior visitors from the travel and tourism industry will have heard 400 speakers in 200 presentations. Not only is the conference huge, it is growing: 20% in the last two years. A large part of the international property industry is an extension of the travel industry. Where it leads, we follow, facing many of the same management, marketing
If you’ve been to an exhibition and would like to write a review, please email email@example.com and technological challenges and opportunities. Few of our industry colleagues have the time or budget to attend such conventions, but selected presentations are now available to view or download from www.itbcongress.de. If they’re not up yet, the 2013 material is still relevant, such as the streamed “Conference TV” version of Doug Lansky’s session “The REAL Travel Trends” and Dr Antonella Mei-Pochtier’s presentation “Travel and Tourism in a Hyperconnected World : Trends, Scenarios and Solutions”. Altogether 47 of the sessions are available for download. At least a dozen should be of direct interest to our industry. The sessions are well worth watching, generally aimed at a senior audience and full of great content and insight. Next stop: ITB Asia – 29-31 October 2014.
Where will you be? Real estate events of April and May 2014 The Property Investor & Homebuyer Show
EXCEL LONDON 11-12 Over two days at ExCeL London, a large visitor audience – comprising buyers of UK and APRIL international property, landlords and property industry professionals – will attend the Property Investor and Homebuyer show, a well-established event that is sure to take advantage of the improving UK property market this year, though around 40% of the exhibition will be dedicated to overseas property. The show is expecting over 100 exhibitors. The conference programme has over 70 seminars scheduled. www.propertyinvestor.co.uk
JEDDAH CENTRE FOR FORUMS AND EVENTS 03-05 Cityscape Jeddah aims to be the premier platform for Saudi Arabian investment MAY opportunities – and is, indeed, the largest real estate event in the Kingdom. The 2013 event was a success with thousands of participants, including a decent number of key decision makers. This year’s event promises 70 exhibitors and over 8,000 visitors. The exhibition will include organised networking events, round tables and business matching services. The Jeddah Real Estate Summit will feature seminars and debates on the challenges facing the industry. www.cityscapejeddah.com
OPPLive Asia 2014 23-24 APRIL
Deutsche GRI THE WESTIN GRAND FRANKFURT 07-08 The Global Real Estate Institute’s German event will, like all GRI events, have no MAY speakers or panellists, just informal discussions in small groups. The programme includes discussions on the sustainability of the German boom and opportunities in redevelopment. “The combination of ‘safe’ and ‘attractive’ is pretty unique; investors along the risk/return curve are homing in on the opportunities this creates,” the site says. www.globalrealestate.org/Deutsche2014
Thailand Hotel Investment Conference
OPPLive Asia 2014, taking place in Singapore’s astonishing Marina Bay Sands (above), will attract agents, developers, IFAs and other industry professionals from across the Asia Paciﬁc region: from Singapore itself to Malaysia, Hong Kong, China, Indonesia and beyond. OPPLive has been bringing together the top names in the international property industry since 2005, leading to countless business partnerships and opportunities.
SIMA Madrid FERIA DE MADRID, PAVILION 6 29-01 The 16th edition of SIMA will be held in front of a more optimistic market than last year, the MAY JUNE organisers feel, mentioning improving economic forecasts and sentiment that the market is ﬁnally bottoming out. Visitors will be a mix of buyers and property professionals looking to keep up with current trends and make potentially lucrative contacts. SIMA 2013 saw 150 exhibitors and over 2,500 visitors. www.simaexpo.com
OPPLive Asia is a unique event focused solely on bringing together top names in the international property industry. On top of the invaluable networking and business opportunities, OPPLive Asia will include a large scale exhibition and conference dedicated to help international companies increase or begin their Asia operations. The conference will feature key subject seminars, round tables, networking events, and “speed dating” sessions. www.opp-liveasia.com
DUSIT THANI BANGKOK Thailand Hotel Investment Conference, 20-21 The an IHIF Summit, will focus largely on the MAY opportunities arising from tourism investment, which is expected to get a boost following the Ministry of Tourism and Sport’s master plan – including 28 projects. The conference will cover topics such as debt ﬁnance, demand and supply, branding, market forecasts and risk management. The organisers stress that they are monitoring the political situation in Bangkok and will not jeopardise the safety of attendees. ihif.questexevents.net
THE OPP PROFILE John Taylor
Plus ça change, plus c’est la même chose
John Taylor, the man and the company, showed that the skills needed to create an international estate agent haven’t changed
hilst MIPIM was noisily celebrating its 25th anniversary, just down La Croisette John Taylor’s agency was quietly marking their 150th birthday. It could be the ﬁrst agency in the world speciﬁcally to deal with international property sales. John Taylor was, sadly, unavailable for interview, having died in 1922. But his successor Sylvain Boichut – the head of sales for France – and some of the staﬀ at John Taylor’s Cannes oﬃce eagerly took up the story. Before that, a little trip back in time. The English aristocracy discovered the joys of Nice in the 1730s and soon hundreds of them were wintering there. Cannes was ignored, mainly because the English
were so often at war with France, whereas Nice, across the River Var, was Italian. Then in 1834 the Lord Chancellor of England, Lord Brougham, was forced to stop at
The gardener, John Taylor, saw the opportunity for profit in Cannes in 1854 and took it Cannes because of an outbreak of Cholera in Nice. He loved this small village, bought some land and started to build a house. Two years
later, London’s high society came to Cannes for the opening of the new Brougham Mansion. Tourism, property sales and prosperity had arrived in Cannes. New residents included Sir Thomas Woolﬁeld, who made a lot of money developing new, extravagant property for the new tourists. And in 1854 he brought his gardener along, one John Taylor. At this time there were no estate agents on the French Riviera, but it was an era when a bright young man on the up could do well in life, and John Taylor had the ﬁrst characteristic required of a successful international real estate man: he was an entrepreneur. He saw the opportunity for proﬁt and took it. He built up a formidable
Age: 150 From: Cannes Employees: 100 Properties: 3,000
Key openings: 1864 Cannes, 1927 Monaco, 1983 St Paul de Vence, 1999 Aix en Provence, Barcelona, Valbonne, 2010 Paris, 2011, abu Dhabi, London, Geneva, Megeve, Gstaad, 2012 Moscow, 2013 Doha.
www.john-taylor.fr tel: +33 4 97 06 65 65
Sponsorship: Guards Polo, BMW Megeve Winter Golf, Ski World Cup in Courchevel, Edmond de Rothschild Megeve International Show Jumping. Future Plans: Europe: Consolidating our presence in Spain, Germany, Netherlands, Belgium and Scandinavia. Penetrating mature markets: USA, Japan and Singapore. Accelerating groeth in emerging markets: China, India and Brazil good business head, knowing when to hand over the reigns of power and the ability to delegate. In the 1990s the business was sold to another family dynasty: Michel Pastor, who adopted the Taylor vision with a passion and moved it on at a faster pace, with new oﬃces outside France. Over 150 years, the ﬁrm has demonstrated the key skills required by a modern overseas property professional. First, he
Their client list was the Who’s Who of European and American society: royals and aristocrats knew – both instinctively and by reason of analysis and hard work – how to take advantage of emerging destinations and new categories of buyer. This market was booming in front of his eyes, much like Spain in the 1980s, Dubai in the 2000s and China & South East Asia today. Their choices of destination and buyer have had very long legs. The South of France is more popular with the wealthy today than ever
in its history. And the company understand rich people – what they like to do, where they like to do it. They like skiing; they like Paris. Why not use their (massive) database and skill set to service all of these places? In future, an outbreak of cholera in Cannes need not kill the business. John Taylor was also quick to grasp the impact of new technology: in Victorian times, the train and the telegraph. The train allowed his buyers to reach him with what, then, seemed miraculous speed and in great comfort. The telegraph allowed him to do business with distant clients far more eﬀectively than by post. And he knew how to leverage those personal contacts and market his new agency across borders. Finally, of course, alongside all these skills, a successful estate agent needs an element of luck: being in the right place at the right time, the big deal that funds the expansion plan, the political development that makes a beautiful but scary place just beautiful or, as in the case of John Taylor, getting the right job in the right place at the right time. OPP salutes John Taylor - the great pioneer of the overseas property industry - and wishes his ﬁrm a happy 150th birthday.
knowledge of the area and used it to advise friends and visitors about where and what to buy. Bearing in mind the extreme social divides at this time, a gardener – albeit the ex-gardener of an aristocrat – selling expensive property to the highest levels in European society, including King Edward VII of England must have required some special skill. By 1884 he was honorary British consul in Cannes and was knighted by Queen Victoria. His properties were as upmarket as his clients, and they still are. Today, his oﬃces on the Croisette, nestled between Valentino and Armani, have a window display other agents would die for: the Chateau Soligny (oﬀers over €10 million please) is between two at €3 million to €6 million. No €80,000 studios here! In 1864, John Taylor’s buyers were almost exclusively British. Slowly, more and more nationalities were attracted to the pleasures on Cannes and today the buyers come from many countries – predominantly Russia, Eastern Europe, the Middle East, Scandinavia and Britain. John Taylor came a long way. His son, grandson and greatgrandson clearly shared a good set of business genes. Showing their business mindset, ﬁrst, they expanded the range of their services. They not only sold property but managed it – harking back to the original role of “estate agents”, who ran the huge estates of the landed European gentry. Their client list was the Who’s Who of European and American society: kings, queens, the aristocracy, the rich and the powerful. Over the years – using these names and connections – John Taylor and his descendants established, consolidated and then expanded their market. Perhaps of more immediate value, his ﬁrm took on more staﬀ and opened a series of new oﬃces in the region – all based on the same premise of servicing the needs of very wealthy buyers wanting a professional, reliable and discreet service. Here, then, we see three other key skills still required by any aspiring property agency: a
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BUSINESS Next month
Coming next month in EXPERTS ADVISE
AROUND THE WORLD
1. Bespoke villas
The USA: still the place where most customers want to buy, whether for lifestyle, investment and education
It’s one of those phrases you hear all the time, but what exactly is a “mobile marketing strategy” and how do you get one?
In the first part of a major news series on post-crisis architecture, we look at some outrageous grand designs for new homes
With businesses taking on new staff, to sell in new markets, with new rules, we look at your options for getting them trained
Africa arise! Time for a fresh look at Africa? A round-up of the exciting opportunities in Sub-Saharan Africa
The world’s shows With spring shows in full swing, May’s OPP will have reviews and previews of the world’s best exhibitions
THE BIG ISSUE
PLUS ALL YOUR USUAL…
Making a comeback?
“And please do notice the glass ceiling...” A woman’s place used to be “in the home”, but when it comes to selling homes, are women reaching their full potential in our industry?
The market may be returning for overseas property, but many potential buyers still need that extra nudge. OPP went undercover to find out what agents are offering at the shows of spring 2014
• News & comment • Branding ideas • Mortgage report • Currency report • Business and training • Correspondent’s reports • The OPP Interview • Statistics and data • Show previews, reviews • Legal round-up
Advertise your job for free on OPP Connect www.opp-connect.com
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If you would like a recruitment package tailored to your company’s needs contact: firstname.lastname@example.org | +44 (0)203 540 2224
ALTERNATIVE INVESTMENT REPORTS “FEIFA recognise the need for balanced, informative and regularly updated research on different asset classes. The AiR reports are an extremely valuable resource for any adviser researching the alternative investment sector and the various products and strategies in the market; we are pleased to be able to make their reports available to our international membership base of financial advisers and wealth managers.” Paul Stanfield, Chief Executive, FEIFA “Intelligent Partnership are undoubtedly the leading provider of research, reports and education on Alternative Investments; as a professional investor or intermediary we would urge you to read their regular editorial in Investment Life and to access their reports on the various alternative investment sectors they cover – there really is no better place to get this quality of research.”
The alternative investment sector is extremely wide ranging and the AiR reports aim to educate the reader and aid their understanding of the sector. “Alternative” is a very broad term which is often used in the investment world to categorise any asset class that isn’t part of the mainstream public markets such as equities, funds or bonds. Assets covered include property, land, forestry, energy, farmland, precious metals and collectibles. Our analysis is based upon in-depth market research; giving readers an up to date snapshot of the types of alternative investment products available in the market. Comprising a market update, demand and supply factors, investment considerations as well as activity and potential in the sector. Our reports are primarily aimed at advisers, intermediaries and professional investors that want to carry out research on the sector and investment opportunities available.
ALTERNATIVE INVESTMENT REPORT
AiR AiR AiR
ALTERNATIVE INVESTMENT REPORT
PURPOSE BUILT STUDENT PROPERTY – 2013
ALTERNATIVE INVESTMENT REPORT
ENERGY AND RENEWABLES – 2013
ALTERNATIVE INVESTMENT REPORT
HOTEL AND RESORT PROPERTY – 2013
INDUSTRY REPORT 2013 PURPOSE BUILT STUDENT PROPERTY
COMPLIMENTARY COPIES www.AiReport.co.uk/a/ILIFE
FORESTRY (COMING SOON)
INDUSTRY REPORT - FEBRUARY 2013
ENERGY & RENEWABLES
FOR OPP READERS
Steven Mallach, Editor, Investment Life
HOTEL & RESORT PROPERTY
Intelligent Partnership Ltd 0044 203 375 1700 AiR@intelligent-partnership.com www.intelligent-partnership.com
LETTER FROM Dubai
Letter from Dubai Select Property has been working in Dubai for more than a decade since the area ﬁrst emerged as a destination for real estate investment. In that time we have gained a comprehensive understanding of the region and culture and have sold more than 5,500 properties across the UAE. During this 10-year period the market has experienced some serious changes, most notably caused by the economic recession of 2008. At this time many property developments came to a halt, which meant that the Dubai property sector had to change its focus. Rather than concentrating on new builds, the Adam Price, Property Middle East region looked at delivering the supporting Managing Director of Select infrastructure for the many residential and email@example.com commercial buildings already constructed. Alongside this, several new building and buying regulations were implemented that provided greater protection for purchasers, landlords and tenants. These are all indicators of a maturing market and a combination of these factors, together with the ever-increasing population, means that Dubai has gradually re-established itself as a major player on the global property scene. It is regularly included on lists of the best places to invest worldwide and has become known as the epicentre and commercial hub of the Middle East, as well as the main bridge between East and West. Select Property has witnessed this sea-change ﬁrst-hand, with the proﬁle of its clients changing dramatically. Pre-2008 the vast majority of properties were purchased on the strength of the Dubai brand, with buyers hoping to take advantage of rapid capital appreciation, whereas today it’s a different story and there is a stable 50/50 split between end-users and investors. Our clients come from all over the world, but with a greater weighting towards the Middle East, GCC and CIS regions. The properties that we offer cater for a whole array of budgets, with prices ranging from £122,500 for one-bedroom apartments up to £1.5 million for penthouses. Historically our business has specialised in property in Dubai Marina but having secured what we feel are the prime sites, we are diversifying into the highly sought-after Business Bay and Downtown areas where we are seeing demand growing daily. With 25 million visitors expected to travel to Dubai during the sixmonth Expo 2020 period, the exhibition is also proving to be a huge motivation for new property projects. It has been reported that the government intends to signiﬁcantly invest in new infrastructure projects and master-planned residential communities to support the inevitable growth. While Dubai is still recovering from 2008 the region seems stronger than ever with a burgeoning community, strengthening foundation and maturing ia Colomb sustainable market – not a bad position for a place written off by many just a few years ago.
ROYAL LONDON HOUSE Experienced developers with strong track record Hotels, Care homes and Serviced Offices Established and Growing Asset Class Major Management Partner (CRM Students) Returns of up to 9% per year All returns paid quarterly ‘Exit Strategy’ Bonus of 20% Protected Client Accounts
Here are some key reasons for investing in purpose built student accommodation:
Purpose built student property is a relatively new and expanding asset class, with a wide range of retail investment opportunities available. Total annual returns were 7.8% (as of September 2013), outperforming both residential buy-to-let and commercial property.
Buyers include pension funds and private investors, who have been attracted by positive rental growth every year throughout the economic downturn. Investment from institutions, funds and private investors increased by over 200% during 2012 to £2.7b.
The sector is driven by an ever growing demand for high quality, purpose built accommodation, designed and managed with students needs in mind. Student management companies regularly report 99% occupancy.
A POPULAR CHOICE
Despite the recent rise in tuition fees, demand for university places continues to outstrip supply. Applications could drop by over 20% before it would have a significant impact on student numbers.
The UK is the second most popular choice for international students and has five of the world’s top 20 universities. International student numbers are predicted to reach 8million by the year 2025.
International students expect a high standard of accommodation, want to feel safe and secure and be close to good transport links. They are often willing to pay a premium for high quality accommodation.
TO FIND OUT MORE PLEASE CONTACT US: David@intelligentpartnership.com 0845 463 5191
CONTACT US: +44 (0) 203 375 1700
Intelligent Partnership Limited Halford Chambers 1-3 Halford Road Richmond TW10 6AW Company Registration No. 06442114 Company Registered in England & Wales
ASIAN BUYERS’ MARKET
ASIAN BUYERS’ MARKET China
China MEDIA CHANNELS PRINTED MEDIA:
hina is the market to crack, as a ‘million millionaires’ are reputedly looking to invest abroad, get a western education for their kids and have a solid ‘plan B’ through securing a visa. Those governments jumping on the golden visa trend have almost all tried to snag Chinese buyers. So why do so many international
agents and developers come a cropper in China, spending vast sums of money and getting little in return? Because doing business in China can be difficult for a newcomer and foreigners may be distrusted. You will need local partners, office premises in China promotional material printed in Chinese, and a translator!
Where do buyers from this country choose: For lifestyle purchase: UK, Canada, Australia, Singapore For investment: UK, US, Canada, Australia, Greece, Cyprus
DEMOGRAPHICS: Population: 1,347 million
China Daily Circulation: 500,000+ Published: Daily Includes a business section. Also publishes China Business Weekly The Global Times Circulation: 1,500,000 Published: Daily Published in Chinese and English. Extensive business section. Yangste Evening Post Published: Daily Circulation: 1.8million Targeted at highly-educated readers and professionals
GDP per head: US$5,450 TELEVISION: Economic freedom: 51.9
Exhibitions Main property exhibition: International Property Expo Beijing (beijingexhibition.com) Shanghai Overseas Property Investment show (www.chinarealestateexpo.com)
Currency: yuan Mobile subscribers %: 73.2
CCTV2 (for business, economy and similar) CCTV4 (for international programmes including ex-patfocused documentaries)
Urban population %: 50 PROPERTY PORTALS: Tax % of GDP: 23.1
Other notable events: Dalian Real Estate Investment Fair (www.chinaexhibition.com)
Human development: 69.9 Ease of doing business: 96
NEED TO KNOW
Legal Expect big, meaty contracts. Although the Chinese doing business domestically will make a deal on a handshake, they recognise the risk of international business. Cultural When dealing with Chinese clients or potential partners, send someone of importance in the company – sending a junior member of staff could be seen as an insult.
Juwai.com SouFun.com Luckywu: claims to be the first website dedicated to bringing Chinese buyers togeher with oveseas properties for sale. (agent-en.luckywu.com) BEST FOR OVERSEAS: Juwai.com OTHER WEBSITES: Hexun www.hexun.com (Mandarin-language, business website with international property section) People & Properties Magazine www.hkpnp.com
ASIAN BUYERSâ€™ MARKET Hong Kong
MEDIA CHANNELS NEWSPAPERS:
ong Kong is well known as a leading economic hub, one of the freest markets in the world, with a government who pride themselves on their lack of interference, and an excellent place to do business (it currently sits in 2nd place on the Ease of Doing Business Index). It is also geographically convenient for most
Where do buyers from this country choose: For lifestyle purchase: Thailand, Bali, Japan, Australia, China For investment: London, Australia, US
other major markets in Asia. The astronomical residential prices in Hong Kong mean that many investors look to buy abroad.
compiled with the help of www.infonation-asia.com
DEMOGRAPHICS: Population: 7 million
South China Morning Post Circulation: 104,000 + online readers Published: Daily Includes international property and investment sections The Standard Circulation: 222,413 + online readers Published: Daily Includes overseas-orientated property section MAGAZINES: Luxury Properties (www.lp-luxuryproperties.com) LOFT (www.loft-asia.com)
GDP per head: US$35,160 TELEVISION: Economic freedom: 89.3
Exhibitions Main property exhibitions: SMART Expo (www.smartexpos.com) MIPIM Asia (www.mipim-asia.com) Other notable events: Property Investment Exhibition (www.pies-asia.com) Asia GRI (globalrealestate.org/asia2014)
Currency: Hong Kong Dollar Mobile subscribers %: 214.7 Urban population %: 100
Television Broadcasts Limited (TVB) Asia Television Limited (ATV) LiTV (Especially Li SPACE, their home channel) ITV-Asia.com (online channel focused on business)
Tax % of GDP: 21.2 PROPERTY PORTALS Human development: 90.6 Ease of doing business: 2
NEED TO KNOW
Cultural Make appointments well in advance and bring as many details as possible â€“ expect them to be scrutinised!
BEST FOR OVERSEAS: i-Property.com.hk OTHER WEBSITES Hong Kong Investor Blog (www.hkinvestorblog.com) Association of Hong Kong Realtors (www.hkrealtors.com) Hong Kong Real Estate Agencies General Association (www.hkreaga.org)
Legal Though you can set up a business or a branch of your business without government permission, you must register with the Companies Registry within a month of beginning trading.
www.gohome.com.hk www.squarefoot.com.hk www.i-property.com.hk
ASIAN BUYERS’ MARKET Indonesia
Indonesia MEDIA CHANNELS PRINTED MEDIA:
he lack of transparency in the Indonesian market presents challenges to businesspeople and opens it wide up for corruption. Red tape also abounds in the country – where most places would use one procedure, Indonesia will probably use five. However, the Indonesians are known for their loyalty and
Where do buyers from this country choose: For lifestyle purchase: Bali (domestic), Australia, Singapore For investment: Lombok, Bali, Australia, Singapore, US, UK Exhibitions RICS ASEAN Real Estate and Construction Summit (www.ricsasia.org) Jakarta International Expo (www.jiexpo.com)
eagerness to please, even in business situations. While this can sometimes lead to less-thanaccurate statements as they try to avoid upsetting anyone, if you make a good partnership it could be long-lasting and lucrative. Indonesia’s middle class is growing quickly, expanding the potential buyer base.
Economic freedom: 56.9 Currency: Rupiah
MetroTV (often features property advertorials) liTVchannel.com (plenty of property-focused programs)
Mobile subscribers %: 103.1 PROPERTY PORTALS: Urban population %: 57
Human development: 62.9
NEED TO KNOW www.opp-connect.com
Warta Ekonomi Circulation: 35,000 Published: Monthly Dedicated property section
GDP per head: US$3,500
Ease of doing business: 120
The Jakarta Post Circulation: 40,000 Published: Daily English language. Targeted at well-educated businesspeople and foreigners.
Population: 243 million
Tax % of GDP: 15.8 Other notable events REI Expo (www.debindo.com)
Kompas Circulation: 500,000 Published: Daily Includes property section
Legal Doing business in Indonesia can be tricky. There are 51 tax payments to be made each year and it takes 498 days to enforce a contract. Cultural Despite their addiction to home-grown social media Kaskus, Indonesians generally prefer to conduct business in person, rather than over the phone or via email.
Rumah123.com (owned by IProperty) Rumah.com (owned by PropertyGuru) RumahDijual.com Propertykita.com
BEST FOR OVERSEAS: www.Rumah.com OTHER WEBSITES: Real Estate Indonesia (www.rei.or.id) www.kaskus.co.id – A forum which claims to be the largest online community of Indonesians www.expat.or.id - Advice on doing business in Indonesia
ASIAN BUYERS’ MARKET Japan
MEDIA CHANNELS NEWSPAPERS:
apan was in recession during the boom years for the rest of the world, and domestic house prices are still 71% down on the 1991 peak. With the economy and prices improving, will Japanese start buying? Doing business in Japan means navigating an etiquette minefield and Lost in Translationstyle culture shock. However
Where do buyers from this country choose: For lifestyle purchase: Hawaii, US West coast For investment: Malaysia, Thailand, Philippines Exhibitions Int. Outdoor Living & Building Products Expo (www.reedexpo.com) Japan Home & Building Show (www.jma.or.jp) Japan Int. Luxury Travel Market (www.iltm.com)
most people you deal with will be understanding (even more so as the 2020 Olympics draws nearer) and the Japanese have great manners. Unlike some business cultures in Asia, meetings and conferences in Japan run to an exact schedule. Don’t expect additional time if you haven’t got your message across by the end of the meeting.
Asahi Shimbun Circulation: 10.97m Published: Twice-daily Nikkei Business Published: Weekly Online version available in English and Japanese MAGAZINES:
Population: 126 million GDP per head: US$45,900 Economic freedom: 71.8 Currency: Yen Mobile subscribers %: 105 Urban population %: 91 Tax % of GDP: 34.7
Other notable events MIPIM Japan (May 2015), www.mipimjapan.jp
Yomiuru Shimnin Circulation: 14.32m (the largest in the world) Published: Twice-daily Includes extensive business and financial sections
Human development: 91.2
Come Home! magazine Casa Brutus TELEVISION: NHK, Japan’s main TV station features property, money and investment shows, but does not carry advertising. (hhk.or.jp) Tokyo Broadcasting System has news and investment channels, (www.news.tbs.co.jp) TV Asahi: carries lifestyle shows. TV Japan: online station with lifestyle/property. (www.tvjapan.net/en)
Ease of doing business: 27 PROPERTY PORTALS: Homes.co.jp Realestate.co.jp.
NEED TO KNOW
Cultural Bowing is an important part of Japanese greetings. The deeper the bow, the more respect shown. If combined with a handshake, turn slightly to the left to avoid collision.
OTHER PROPERTY SITES: Japan Real Estate Institute (www.reinet.or.jp) Japanese property news: (www.japanpropertycentral.com)
Legal Japan’s legal system is notable for the strong role of mediation rather than litigation, pro-tenant bias re rentals and power of eminent domain (compulsory purchase).
BEST FOR OVERSEAS: international.realestate.co.jp, includes an overseas section, plus lots of tips on doing business in Japan.
ASIAN BUYERS’ MARKET Malaysia
MEDIA CHANNELS PRINTED MEDIA:
ike in Singapore, just a short hop away, cooling measures in Malaysia are making it more attractive for buyers to look internationally. Singapore is still a top choice for investment, with the ‘safe havens’ of London and Sydney property also topping Malaysians’ shopping lists both for both lifestyle and
Where do buyers from this country choose: For lifestyle purchase: Singapore, Australia
investment (including, for example, in London’s Battersea Power Station development, being paid for by Malaysians). Many will be looking for both in a purchase. Malaysia has been highlighted by the World Bank as a country showing “strong improvement” in the ease of doing business, having broken into the index’s top ten.
DEMOGRAPHICS: Population: 29 million
For investment: London, Australia, Singapore, North America
GDP per head: US$9,980
Exhibitions International Property & Investment Showcase International Luxury Property & Investment Expo, expo.iproperty.com Malaysia Property Expo (MAPEX) mapex.com.my SMART Expo (Kuala Lumpur) smartexpos.com
Economic freedom: 66.1
Urban population %: 73 Tax % of GDP: 21 Human development: 76.9
NEED TO KNOW www.opp-connect.com
The Star Circulation: 290,000 Published: Daily English language. Includes StarBiz (business) and a lifestyle section. iProperty.com Magazine Smart Investor, (www.inovatifmedia.asia) TELEVISION: Channel TV3 is the best for advertising – the channel has twice reached 51% of viewship and often airs travel and lifestyle programmes. Astro TV: satellite TV with lifestyle programming.
Mobile subscribers %: 127
Ease of doing business: 6
The New Straits Times Circulation: 200,000 Published: Daily English language. Includes business and travel sections.
Legal The Malaysian legal system is based closely on that of Britain’s – but offences against Islamic law are tried by Syariah courts. Cultural In recent years there has been demand for overseas properties, especially London and Melbourne, due to a strong educational and cultural connection.
Li (Life Inspired) is a lifestyle channel. LiSpace features homes programming, for example Buy Herself for women real estate investors and A Bryk At a Time. (www.litvchannel.com) PROPERTY PORTALS: Iproperty.com.my PropertyGuru.com.my www.hbinternational.com.my BEST FOR OVERSEAS: PropertyGuru.com.my OTHER WEBSITES: Malaysia Institute of Estate Agents (miea.com.my) The Real Estate and Housing Developers’ Association (www.rehda.com) Malaysian Investor (www.min.com.my)
ASIAN BUYERS’ MARKET Map
Asia where to find it...
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ASIAN BUYERSâ€™ MARKET Singapore
ingapore is in an unusual position. Its Government having imposed cooling measures on a domestic property market it felt was overheating, Singaporeâ€™s 31,000 estate agents are casting further afield for property that represents a better investment. Buyers are certainly there, with both large and small
Where do buyers from this country choose: For lifestyle purchase: Australia, UK, Malaysia, HK For investment: UK, US, Hong Kong Exhibitions Among the many property exhibitions in Singapore: OPPLive Asia, April. What to sell around the world. PropertyGuru also hold many events in Singapore selling overseas property, both in the region (Philippines, Thailand...) and beyond. Property Funding & Crowdfunding Expo, (www.CoAssets.com/EPIC)
investors putting their dollars into property and with a strong preference for UK, Australian and US property, particularly products such as student accommodation. With local property so expensive, regular property elsewhere can feel very inexpensive, turning even small scale investors on to property and protected by strong CEA control.
Lianhe Zaobao (Chinese) Circulation: 161,000 Published: A Chinese language daily quality broadsheet that is sold beyond Singapore to neighbouring countries. (zaobao.com.sg)
GDP per head: US$46,240
Shin Min Daily News (Chinese) Circulation: 130,000 Published: A mid-market tabloid sold in the evenings.
Economic freedom: 88
Today, published by MediaCorp
Currency: Singapore $
MAGAZINES: Property Guru Home Concepts Property Life
Population: 5.2 million
Mobile subscribers %: 150.2 Urban population %: 100 Tax % of GDP: 15.5 Human development: 89.5 Ease of doing business: 1
NEED TO KNOW
NEWSPAPERS: Straits Times (English) Circulation: 337,000 daily Published daily and as The Sunday Times, it has good lifestyle, business and property coverage, property/investment supplements at weekends. (straitstimes.com)
Legal Where do you start? Singapore is tightly regulated and many business practices seen as normal elsewhere will get you banned and fined. See the Council for Estate Agents website for guidance, and be careful: www.cea.gov.sg Cultural Sensitivity is required, as Singapore recovers from rioting by overseas workers and a highly publicised anti-locals rant by a British expat banker.
TELEVISION: MediaCorp, owns several channels with lifestyle/property Li (Life Inspired) is a lifestyle channel. LiSpace features homes programming. (www.litvchannel.com) PROPERTY PORTALS PropertyGuru.com.sg (includes overseas) iProperty.com.sg, (includes overseas) BEST FOR OVERSEAS: PropertyGuru.com.sg OTHER WEBSITES www.propertysoul.com (English language) blog.iproperty.com.sg (English language)
ASIAN BUYERS’ MARKET Thailand
eset by political strife n Bangkok, Thailand should be low-hanging fruit for international property sellers. But the riots have put many developers off marketing in Bangkok. Moreover, many local lifestyle buyers opt for tourist regions within Thailand, such as Pattaya. With buyers from outside Thailand limited to owning 49% of
Where do buyers from this country choose: For lifestyle/education: Philippines, UK, US, Australia For investment: UK, Myanmar, HK, Japan Exhibitions Most take place in shopping malls for domestic property and 5-star hotels for global. Asia Pacific Hotel Investment Conference, Bangkok, (ihif.questexevents.net) Pattaya Property Show, (pattayapropertyshow.com) Thailand Exclusive Property Show (TEPS) (www.teps.in.th) Thailand Property Show (exactthailand.com)
a development, they are heavily marketed domestically. Wealthy Thais speak and read English and are used to dealing with foreigners.
compiled with the help of www.exactthailand.com
DEMOGRAPHICS: Population: 70 million GDP per head: US$4,970 Economic freedom: 64.1 Currency: Baht
PRINTED MEDIA: Bangkok Post, an Englishlanguage daily newspaper, includes business, plus MyLife supplement on Thursday: bangkokpost.com The Nation, good coverage of property and a new portal with property from the ASEAN region. nationmultimedia.com Daily News, upmarket Thai daily with business and property. www.dailynews.co.th Also Watajak and Borikartong, with classifieds including homes. Pattaya Mail produces a monthly property supplement which includes international. TELEVISION: Much of Thailand’s TV is owned by the government and army, with lots of news, drama and sport, some lifestyle/investment property programming.
Mobile subscribers %: 111 Urban population %: 31
Thai TV3 - One of Thailands top TV stations with Thai and English language stations, lots of ads.
Tax % of GDP: 20.2 Human development: 69 Ease of doing business: 18
NEED TO KNOW
Cultural Although the political mess has been getting the headlines, the reality on the ground is that multinational companies are still moving to and investing in Thailand, property buyers are still moving in Thais are still keen to buy overseas.
PROPERTY PORTALS www.ddproperty.com: English and Thai, includes overseas property. www.thailand-property.com: English and Thai. www.rethai.com: English OTHER USEFUL WEBSITES thairealestate.org: Thai Real Estate
Legal Purchase of immovable properties abroad is allowed up to US$10 million per person per year
Satellite TV include True Vision, with 50 channels inc lifestyle and a business channel that features ‘hot properties’ (truevisions.truecorp.co.th) and Star TV Asia, with Iifestyle and homes programmes from the Murdoch stable.starworldasia.tv
ASIAN BUYERS’ MARKET Vietnam
MEDIA CHANNELS NEWSPAPERS:
he arrival of high-end magazines like GQ and Forbes in the past year is indicative of the great leap forward in Vietnamese business and society in recent times. The middle class now exceeds 12 million (out of a sizeable population) and that will double by 2020, according to the Boston Consulting Group.
Where do buyers from this country choose: For lifestyle purchase: USA, Hong Kong, Singapore For investment: UK, USA, Australia, Singapore
Vietnam is still ruled as a socialist one-party state, which controls property ownership strictly. Given a political situation similar to China, the Vietnamese have likewise been keen to buy abroad. Also helpful has been an increase in direct flights to and from Vietnam – Chinese and South Korean tourism has increased by 50% since 2011.
DEMOGRAPHICS: Population: 88.8m
Vietnam News Daily, by the Government’s Vietnam News Agency, with versions in English, Chinese, French and Spanish. (en. vietnamplus.vn) includes the excellent bizhub, with good property features. (bizhub.vn) Thanh Nien Circulation: 2million weekly Published daily in Vietnamese and English. Includes good business coverage. (thanhniennews.com)
GDP per head: US$1,407
Exhibitions Hanoi Property Fair, October. International Travel Expo, Saigon, includes resort property. Architecture & Building Expo.
Economic freedom: 51
Savills appear to have the Vietnam market almost to itself, having operated there since 1995. They have a good website in English and Vietnamese and evident expertise in the market. www.savills.com.vn
Broadband %: 4.3
Tuoie Tre A popular daily newspaper, with a good English-language news service including business and lifestyle. (tuoitrenews.vn)
Mobile subscribers %: 143.4
Tax % of GDP: 25.2 Human development: 61.7 Ease of doing business: 99
NEED TO KNOW
The Saigon Times A business weekly and Englishlanguage website. (english.thesaigontimes.vn)
Legal Non-Vietnamese nationals are not permitted to buy land in Vietnam. Cultural Vietnam has a famously conservative investment culture and will be unlikely to take to risky opportunities.
MAGAZINES: Vietnam Briefing: legal, tax and investment advice. Forbes Vietnam. TV State broadcaster VTV has six main channels including lifestyle/ property programmes. So does HTV and owns cable channel HTCV. PROPERTY PORTALS Batdongsan.com.vn (English, Vietnamese, includes articles. Part of Property Guru) Muabanndat.com.vn Real-estate-vietnam.com OTHER WEBSITES: realestateinvietnam.blogspot.ie Vietnamese Real Estate Assoc. (VNREA) (www.vnrea.vn) Vietnamwto.com is good business and lifestyle resource.
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OPP Magazine is the must-read publication for global professionals in the overseas property industry. First published in 2004, OPP Magazine...