This was the year London's skyline was supposed to be transformed by the construction of yet more signature skyscrapers. But with funding increasingly hard to come by and fears that demand for office space will continue to drop, many such projects have now been delayed or shelved. Commercial property values fell by 3.5% in January, on top of a 27% decline in 2008, according to global property advisers CB Richard Ellis (CBG). "The British commercial property market has been the first and fastest to react to the financial crisis," says Peter Damesick, CB Richard Ellis' head of research in Britain.
Witness the number of high-profile projects that have fallen victim to the downturn. Plans for a tower called St. Alphage's in London's financial district—known as the City of London—were canceled after the intended tenant, JPMorgan Chase (JPM), withdrew. And Dutch bank ING (ING) pulled the plug on Frank Gehry's first British project, a $433 million waterfront development in Brighton. "There's been a sharp downturn in new development activity over the last 12 months," Damesick says. "A lot of projects that were in the pipeline are being reassessed."
Saturday, February 28, 2009
Wednesday, February 25, 2009
Foreclosures in Britain soared in 2008
LONDON, Feb. 20 (UPI) Foreclosures in Britain soared 54 percent in 2008 as lenders claimed possession of 40,000 homes, the Council of Mortgage Lenders said.
Foreclosures reached a 12-year high, while the number of homeowners in arrears jumped 70 percent, The Times of London reported Friday.
The trade association said 500,000 homeowners could fall three months behind on their mortgages in 2009. In 2008, 219,000 homeowners fell into that category.
The Council of Mortgage Lenders said "strenuous efforts" were made to keep the numbers from hitting the forecast prediction of 45,000 homes falling into foreclosure, The Times said.
Foreclosures reached a 12-year high, while the number of homeowners in arrears jumped 70 percent, The Times of London reported Friday.
The trade association said 500,000 homeowners could fall three months behind on their mortgages in 2009. In 2008, 219,000 homeowners fell into that category.
The Council of Mortgage Lenders said "strenuous efforts" were made to keep the numbers from hitting the forecast prediction of 45,000 homes falling into foreclosure, The Times said.
Friday, February 20, 2009
HIPS are a brake on the property market
Over the past few months buying agents have noticed an increase in the number of houses available privately. "People are shy to put their homes on the market but that doesn't mean to say they don't want to sell them," says Hugo Thistlethwayte of buying agents Prime Purchase. Sellers use the grey market as a means of testing the price of their house; if it hasn't sold after a handful of private viewings, they know to launch it on the open market at a lower figure.
Some might argue that these private sellers deserve to be exposed. "In boom times buyers must pay a premium to unlock the estate agent's bottom drawer," says Thistlethwayte. "But in recessions, it also contains overpriced, blighted homes that wouldn't stand a chance on the open market."
Some might argue that these private sellers deserve to be exposed. "In boom times buyers must pay a premium to unlock the estate agent's bottom drawer," says Thistlethwayte. "But in recessions, it also contains overpriced, blighted homes that wouldn't stand a chance on the open market."
Tuesday, February 17, 2009
London: Getting real on real estate
To say that the last two years have been a rollercoaster ride for property investors would be wrong. Bar a few rallies, shareholders in property companies have endured more of a helterskelter slide since the introduction of the long-anticipated real estate investment trust regime in 2007.
First hit by the start of the cyclical property slump, then by financing issues in the wake of the credit crunch, the new year began with worries over revenue in a worsening recession.
In the maelstrom created by these three factors, property companies underestimated their need for cash, despite rapidly nearing gearing covenants as asset values continued to plummet.
Now, with further value falls expected, the sector is scrambling for funds to cure straining balance sheets that are burdened by too much debt in relation to the declining value of properties.
First hit by the start of the cyclical property slump, then by financing issues in the wake of the credit crunch, the new year began with worries over revenue in a worsening recession.
In the maelstrom created by these three factors, property companies underestimated their need for cash, despite rapidly nearing gearing covenants as asset values continued to plummet.
Now, with further value falls expected, the sector is scrambling for funds to cure straining balance sheets that are burdened by too much debt in relation to the declining value of properties.
Monday, February 9, 2009
Most expensive real estate markets in 2009
London residential property prices have fallen for much of 2008, while Moscow property price declines only started in the last quarter, allowing Moscow to catch up with London. Both countries have experienced strong currency declines.
Tokyo and Hong Kong come in fourth and fifth, respectively.
New York, the only US city included in the survey, is 6th, with an average price of US$15,000 per sq. m.
Completing the top ten most expensive real estate markets are two European cities (Paris at 7th and Rome at 9th) and two other Asian cities (Singapore at 8th and Mumbai at 10th). Average prices range from US$9,000 per sq. m. to US$12,000 per sq. m.
Tokyo and Hong Kong come in fourth and fifth, respectively.
New York, the only US city included in the survey, is 6th, with an average price of US$15,000 per sq. m.
Completing the top ten most expensive real estate markets are two European cities (Paris at 7th and Rome at 9th) and two other Asian cities (Singapore at 8th and Mumbai at 10th). Average prices range from US$9,000 per sq. m. to US$12,000 per sq. m.
Tuesday, February 3, 2009
London has climbed ten places to rank fifth in a study into the European real estate market
The survey, Emerging Trends in Real Estate Europe 2009, was based on nearly 500 surveys and interviews from the industry’s leading authorities, and found investment opportunities could grow in London due to falling prices. The survey also placed Munich as the lead real estate investment market in Europe.
However, development prospects remained poor, where London ranked 23rd out of 27 markets in the study, and capital for real estate continued to be in short supply in both equity and debt markets. The majority of buy, hold and sell recommendations in London were focused on holding properties, with buyers showing more interest in office space and hotels in 2009.
However, development prospects remained poor, where London ranked 23rd out of 27 markets in the study, and capital for real estate continued to be in short supply in both equity and debt markets. The majority of buy, hold and sell recommendations in London were focused on holding properties, with buyers showing more interest in office space and hotels in 2009.
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