Until a few years ago, summers were boring. Everybody left town and little happened in the world. That all ended in the summer of 2007 when we learned what toxic assets and sub-prime mortgages were. This year, the weather’s been awful, but the news has been worse. Not only has Greece continued to make the headlines, making room now and again for Italy, but then there’s the debt ceiling nonsense going on in Washington. We’ll find out over the weekend if the US is merely ungovernable, or if it can’t even pretend it’s governable. Because even if they do manage to patch together some kind of agreement, it’s unlikely to be anything but a cynical, short-term measure that fools no one.
A perfect time, then, for Moody’s to put Spain on review for a downgrade. Time to look for some good news now. Suggestions welcome.
Posted in USA
Tagged Moody's, USA
Europa Fund II and Warimpex Finanz have sold the Jan III Sobieski Hotel in Warsaw, along with a 6,000 sqm sqm office building to the Norwegian-based investment company Wenaasgruppen. The sale price is being reported “in excess of €50m.” The transaction is Wenaasgruppen’s first hotel purchase in Poland.
“This sale takes place after the successful fulfilment of a five-year business plan. We have accomplished a substantial renovation of the hotel and, together with Warimpex and Vienna International Hotelmanagement AG, significantly improved the hotel performance during those five years,” commented Simon Hooper, Partner at Europa Capital.
Telefonica’s headquarters at Kralovo Pole in Brno is on sale through Knight Frank. The 9 buildings offering 34,000 sqm of class B commercial space were built in 1974. The transaction is a sale and lease back, as Telefonica plans to occupy part of the area.
Immofinanz Group has spent €50m on its 20,000 sqm extension to Silesia City Center. Over 90% of the newly developed units are now waiting for new brands to move in. H&M, Van Graaf and SMYK Megastore has already started work on their new stores. Other newcomers to the mall include Calvin Klein Jeans, Tommy Hilfiger, La Mania, Massimo Dutti, Stradivarius, Harpers Shoes and Lacoste. The project is expected to be completed in autumn 2011.
Czech industrial take-up was 136,000 in QII 2011, a fall of 3,000 sqm from Q1. More significantly, however, the level of supply rose from 14,000 to 47,800 sqm, confidence that’s resulting from a vacancy rate of just 8.1%, the lowest figure since 2007.
“The vacancy rate is closely connected with rents. If the vacancy rate drops below 10 percent, the limited supply may result in pressure for price increases. And this started to happen in selected locations in the first quarter of this year. Over the recent months, though, rents have started going up across the board and in almost all of the Czech Republic,” says Jaroslav Kaizr, head of the industrial letting team at C&W’s Prague office.
VGP, HB Reavis and Portland Trust were the main contributors to the new supply. C&W points out that take-up was actually much higher in 2010 over the first two quarters, hinting that the easy availability of empty space was behind the result. “In terms of demand, 2011 will be lower than the previous year, and this is also because of the shortage of available space that is starting to appear in certain locations,” says Kaizr.
The moral of the story would appear to be that healthy take-up is fine, but only low vacancy rates can push supply.
Investment was up in QII 2011 compared to the same period a year ago, but JLL notes it was a climb-down from the giddy heights of Q1. “Direct real estate investment volumes in Europe during the second quarter of 2011 (Q2 2011) reached €24.8bn, reflecting 4% growth compared with the equivalent period last year.” Robert Stassen, Head of EMEA Capital Markets Research at JLL, suggest Q1 might have been a slight aberration.
“The first quarter of this year saw some exceptionally large deals completing, including the sale of the UK’s Trafford Centre (€1.9 billion) and the Centro Shopping Centre in Germany (€650 million), but this momentum did not continue during the second quarter. Although this would explain much of the quarterly volatility, tight supply of product, particularly in the popular Central London market may also have held back investment volume growth.”
Inpro focusing on luxury investments
The developer Inpro closed the second quarter of 2011 with a loss of PLN 322m, however it intends to deliver additional office space and a luxury hotel. It’s increasing its exposure to commercial property with projects planned in Poland’s regional cities. It’s received a construction permit for two new office projects in Gdansk that are located near Park City, one of Inpro’s housing investments. The company is looking to add to its land bank and will be concentrating on Bydgoszcz, Warsaw, Toruń and Poznań to do so.
PLN 40m amusement park planned for Warsaw
The investor La Palm is planning to develop an amusement park called Adventure World Warsaw. Claiming inspiration from Disneyland parks, this new scheme in Grodzisk Mazowiecki is believed to be an investment of €400m, with 800 rooms provided by two hotels and a retail component. Construction is expected to start in spring 2012 with completion set for 2014.