Rental scam targets potential tenants

(WASHINGTON) Michelle Jonasson-Jones, a Silver Spring, Maryland-based property agent, cautions potential tenants about a rental scheme making the rounds online that has caught the attention of the FBI.

Ms Jonasson-Jones said that she has had her listings for rental properties ‘stolen’ and relisted under a different name and a lower price, usually on Craigslist. The impostors send prospective tenants an ‘application’ and ask for their personal and financial information.

They tell prospective renters that the owner is working overseas and is unavailable to show the house.

‘It used to be they were scamming the owner; now they’re scamming the tenants,’ she said.

Wendy Dufford, an intelligence analyst for the FBI in Columbia, South Carolina, wrote an article for the bureau’s website after the South Carolina Association of Realtors called to report such a scam.
Tenants who had been scammed were showing up at people’s houses, she said, believing they had rented from a missionary overseas.

A formal investigation won’t be launched until a minimum threshold of losses is reported online, Ms Dufford said, but so far the FBI has discerned that the scam originated in Nigeria and is affecting cities nationwide.

‘They’re choosing victims because of the economy,’ Ms Dufford said.

Many of the scam victims have been forced to rent, because they’ve lost their homes and are searching on Craigslist, she said.

‘They try to rent these homes, and then they get their money stolen.’ – WP

Source: Business Times, 18 Aug 2009

Europe’s commercial property transactions value fall

THE average value of European commercial property transactions fell 35 per cent in the first half as banks granted fewer loans, according to CB Richard Ellis Group Inc.

The average price was 18.4 million euros (S$37.9 million), down from 28.3 million euros a year earlier and 44.4 million euros at the peak of the market in 2007, said CBRE, the world’s largest property broker. The biggest deal was the sale of properties owned by failed company Dawnay Day Group in the UK for more than £600 million (S$1.43 billion), CBRE said.

Commercial property investors are struggling to finance large purchases in Europe after banks curbed lending in the credit crunch and stopped securing bonds against buildings. There were nine transactions valued at more than 200 million euros in the first half, compared with 40 a year earlier, according to the broker.

‘Appetite for lending on large transactions has been very limited since the second half of 2007,’ said Jonathan Hull, CBRE’s executive director of European capital markets. ‘In recent months, we have seen greater willingness to lend.’

Source: Business Times, 15 Aug 2009

Good bet on student housing

Student accommodation promises good investment returns even as UK property market remains dull

London – Property investors are turning to the student accommodation sector as a would-be phoenix rising from the ashes of the UK real estate market, promising growth in returns and size for at least the next few years.

Student housing is viewed as a rarity in the UK property market that still makes for an attractive investment, as more traditional commercial assets suffer falling capital values and rents, and rising tenant defaults.

‘Ten per cent increase (in student housing rents) per year is not sustainable in the long term when you have new supply coming on,’ said Mr Philip Hillman of property agency King Sturge.

‘But with the chronic shortage of student housing, rents will still rise for some time.’

Property broker Savills said it now gets about two enquiries a week from pension funds new to student housing, as rents for other assets like offices, malls and factories are forecast to fall up to 15 per cent this year amid the recession.

‘Pension funds had their fingers burnt in commercial assets where, if a big tenant drops out, the entire building is vacant; but if a student drops out, you still have a hundred more ready to take the room,’ Savills associate director Natasha Ham said.

The student housing sector, valued at 26.5 billion euros (S$54 billion), two-thirds of which is owned by universities and the rest by private operators, is about 10 per cent the size of the total commercial property market. Risk-averse banks are still willing to lend to build new student flats, thanks to an expected double-digit growth in Britain’s student numbers, student homes operators said.

University Partnerships Programme (UPP), the UK’s second-biggest student homes operator and part of Barclays Private Equity, last year raised £300 million (S$711 million) from banks, and plans to further invest £1 billion and double its portfolio of 18,000 student beds by 2015.

New entrants to the student housing market have been attracted by the prospects of steady returns, where property yields have held steady at about 6 per cent over the past three years.

Sydney’s Campus Living Villages, backed by four Australian pension funds, made its first UK deal last December, buying 755 student flats from the University of Salford in Manchester, and is in talks over deals with other British universities, its UK chief executive, Mr Gary Clarke, said.

Elsewhere in Europe, agents say Germany and France also offer investment opportunities because of their attraction to overseas students, and relatively undeveloped student housing where average rents are a third cheaper than in the UK.

Savills is working with a Germany-based institutional investor to set up a 210-million-euro fund later this year, with plans to build student homes offering 6,000 beds across 15 German cities, including Frankfurt and Munich, Ms Ham said.

‘The fund manager has identified a UK-listed developer to provide sector expertise, to create the branded student accommodation model in Germany,’ she said, declining to name the parties as an agreement has not yet been finalised.

Branded student housing can be pricey, with high-end versions offering en suites, flatscreen TVs and laundry services costing up to £300 a week in London.

Despite the recession, King Sturge’s Mr Hillman said there are few signs that the target market – mainly affluent first-year and post-graduate international students – is trading down.

‘First-year students usually can’t find housemates to rent with, and there is no guarantee the flat will be near to school,’ said UPP finance director Gabriel Behr.

Reuters

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Promising market
Elsewhere in Europe, agents say Germany and France also offer investment opportunities because of their attraction to overseas students, and relatively undeveloped student housing where average rents are a third cheaper than in the UK.

Source: Sunday Times, 12 July 2009

Singapore real estate ‘not hot’ for investors

Institutions and fund managers prefer China, Japan, Australia: Survey

SINGAPORE no longer appears on the radar screen of most non-listed institutional investors and fund managers, according to the latest survey by Asian Real Estate Association (Area).

This year’s hottest picks are China, Australia and Japan, said its Investment Intentions Asia Survey 2009.

The online survey of 73 organisations active in the Asian non-listed real estate funds market found that less than 20 per cent of fund managers and just 10 per cent of investors chose Singapore as their preferred investment location.

China is the most appealing location in terms of Asian performance prospects – it is the choice of 90 per cent of investors and 81 per cent of fund managers.

Japan was the top fund choice for fund of funds managers, firms that hold a portfolio of various investment funds, with 88 per cent of them opting for the country.

Australia, a new entrant, was also a firm favourite.

‘With the exception of China, investors generally appear to have a lower regard than fund of funds managers or fund managers on the prospect of other Asian markets delivering target
performances,’ said the survey.

This year, Singapore did not figure at all in respondents’ preferred locations and sectors in Asia.
In last year’s survey, the Singapore office market was ranked seventh on the list of respondents’ preferred locations and sectors in Asia – though fund of funds managers were already not keen.
The number of institutions interested in Singapore has certainly diminished due to the downturn, said Mr Craig Ward, director of regional capital markets at Savills Singapore.

‘There are still some institutions keen on the Singapore office market, but pricing has not reached an equilibrium.’

According to the survey, investors this year are most keen on the residential sector in China, followed by its retail market.

Fund of funds managers, however, prefer the Australian and the Japanese office sectors.
About 60 per cent of the respondents believe Singapore to be most hit by the global downturn, while just 20 per cent of them thought Hong Kong and Australia to be worst hit by the slump.

‘Singapore is one of the most open economies in the world, so it is more than averagely affected by the downturn,’ said Mr Robert Lie, co-director of Area’s executive committee.

But it is an attractive mature market over the medium term, he added.

‘A lot of investors are cautious. Basically, indicated prices have to correct,’ said Mr Lie, who is also managing director of Redevco Asia.

Asia is the second home market of Redevco, which owns one of the largest retail real estate portfolios in Europe.

Source: Straits Times, 24 June 2009

Singapore real estate ‘not hot’ for investors

Institutions and fund managers prefer China, Japan, Australia: Survey

SINGAPORE no longer appears on the radar screen of most non-listed institutional investors and fund managers, according to the latest survey by Asian Real Estate Association (Area).

This year’s hottest picks are China, Australia and Japan, said its Investment Intentions Asia Survey 2009.

The online survey of 73 organisations active in the Asian non-listed real estate funds market found that less than 20 per cent of fund managers and just 10 per cent of investors chose Singapore as their preferred investment location.

China is the most appealing location in terms of Asian performance prospects – it is the choice of 90 per cent of investors and 81 per cent of fund managers.

Japan was the top fund choice for fund of funds managers, firms that hold a portfolio of various investment funds, with 88 per cent of them opting for the country.

Australia, a new entrant, was also a firm favourite.

‘With the exception of China, investors generally appear to have a lower regard than fund of funds managers or fund managers on the prospect of other Asian markets delivering target
performances,’ said the survey.

This year, Singapore did not figure at all in respondents’ preferred locations and sectors in Asia.
In last year’s survey, the Singapore office market was ranked seventh on the list of respondents’ preferred locations and sectors in Asia – though fund of funds managers were already not keen.
The number of institutions interested in Singapore has certainly diminished due to the downturn, said Mr Craig Ward, director of regional capital markets at Savills Singapore.

‘There are still some institutions keen on the Singapore office market, but pricing has not reached an equilibrium.’

According to the survey, investors this year are most keen on the residential sector in China, followed by its retail market.

Fund of funds managers, however, prefer the Australian and the Japanese office sectors.
About 60 per cent of the respondents believe Singapore to be most hit by the global downturn, while just 20 per cent of them thought Hong Kong and Australia to be worst hit by the slump.

‘Singapore is one of the most open economies in the world, so it is more than averagely affected by the downturn,’ said Mr Robert Lie, co-director of Area’s executive committee.

But it is an attractive mature market over the medium term, he added.

‘A lot of investors are cautious. Basically, indicated prices have to correct,’ said Mr Lie, who is also managing director of Redevco Asia.

Asia is the second home market of Redevco, which owns one of the largest retail real estate portfolios in Europe.

Source: Straits Times, 24 June 2009

Global retail rents hit by economic crisis

Orchard Road still 28th costliest; most cities see double digit drop: Colliers

PRIME street-front retail rents in most cities worldwide shrank by double digits – and in some cases, as much as half – over the past 12 months as consumers cut back on spending, according to a survey released yesterday.

Published annually by Colliers International, the survey tracks annual retail rents – in terms of US dollars per square foot – along the prime retail corridors of 127 cities in North America, Europe, the Middle East and Africa, the Asia-Pacific and Latin America.

Singapore’s Orchard Road remained the 28th most expensive place in which to rent retail space. Annual retail rents there fell to US$324 psf in the latest survey, from US$367 psf a year earlier. But the worldwide slide in rents meant Orchard Road retained its ranking.

Fifth Avenue in New York topped the global chart again this year with annual retail rents of US$1,400 psf, followed by the Champs Elysees in Paris at US$1,203 psf and Causeway Bay in Hong Kong at US$1,192 psf.

‘As in other cities, as the financial crisis deepened and Singapore’s economy slipped into a recession in the final quarter of 2008, domestic consumers tightened their belts on fears of rising unemployment and wage cuts,’ said Tay Huey Ying, Colliers’ director of research and advisory. ‘Declining visitor arrivals also affected retail sales.’

Amid the less favourable operating environment, tenants became more selective and rent-sensitive, Colliers said. Coupled with the supply of retail space in the pipeline, Singapore’s prime retail rents started to buckle in Q4 2008.

But although rents in Singapore are falling, they are not falling as fast as those elsewhere. Due to their relative resilience, and the relative strength of the Singapore dollar against the US currency, Singapore’s prime retail rents recorded a milder decline of 12 per cent in US dollar terms compared with rents in some other Asia-Pacific cities.

‘What this means is our retail competitiveness against our more costly neighbours has been eroded,’ Ms Tay said. ‘For example, while Singapore’s premier retail rents were 18 per cent cheaper than those in Sydney and Melbourne in 2008, the gap has now narrowed to just 3 per cent in the latest survey.’

By the same token, Singapore’s competitiveness against cheaper neighbours – such as Auckland, Bangalore, Christchurch, Delhi, Perth and Wellington – has worsened because the gap in rents has widened.

Colliers expects prime retail rents in Singapore to fall between 10 and 15 per cent in 2009, hit by weak consumer sentiment and falling visitor arrivals.

Source: Business Times, 3 June 2009

Global retail rents hit by economic crisis

Orchard Road still 28th costliest; most cities see double digit drop: Colliers

PRIME street-front retail rents in most cities worldwide shrank by double digits – and in some cases, as much as half – over the past 12 months as consumers cut back on spending, according to a survey released yesterday.

Published annually by Colliers International, the survey tracks annual retail rents – in terms of US dollars per square foot – along the prime retail corridors of 127 cities in North America, Europe, the Middle East and Africa, the Asia-Pacific and Latin America.

Singapore’s Orchard Road remained the 28th most expensive place in which to rent retail space. Annual retail rents there fell to US$324 psf in the latest survey, from US$367 psf a year earlier. But the worldwide slide in rents meant Orchard Road retained its ranking.

Fifth Avenue in New York topped the global chart again this year with annual retail rents of US$1,400 psf, followed by the Champs Elysees in Paris at US$1,203 psf and Causeway Bay in Hong Kong at US$1,192 psf.

‘As in other cities, as the financial crisis deepened and Singapore’s economy slipped into a recession in the final quarter of 2008, domestic consumers tightened their belts on fears of rising unemployment and wage cuts,’ said Tay Huey Ying, Colliers’ director of research and advisory. ‘Declining visitor arrivals also affected retail sales.’

Amid the less favourable operating environment, tenants became more selective and rent-sensitive, Colliers said. Coupled with the supply of retail space in the pipeline, Singapore’s prime retail rents started to buckle in Q4 2008.

But although rents in Singapore are falling, they are not falling as fast as those elsewhere. Due to their relative resilience, and the relative strength of the Singapore dollar against the US currency, Singapore’s prime retail rents recorded a milder decline of 12 per cent in US dollar terms compared with rents in some other Asia-Pacific cities.

‘What this means is our retail competitiveness against our more costly neighbours has been eroded,’ Ms Tay said. ‘For example, while Singapore’s premier retail rents were 18 per cent cheaper than those in Sydney and Melbourne in 2008, the gap has now narrowed to just 3 per cent in the latest survey.’

By the same token, Singapore’s competitiveness against cheaper neighbours – such as Auckland, Bangalore, Christchurch, Delhi, Perth and Wellington – has worsened because the gap in rents has widened.

Colliers expects prime retail rents in Singapore to fall between 10 and 15 per cent in 2009, hit by weak consumer sentiment and falling visitor arrivals.

Source: Business Times, 3 June 2009

Property sector outlook ‘uncertain’

DESPITE the recent uptick in property interest in some countries, the outlook for the sector remains uncertain, an Asian real estate conference heard yesterday.

Speaking at Cityscape Asia 2009, Mr Stuart Labrooy, chief executive of Malaysia-based Axis Reit Management, said the full effects of the credit crisis ‘have not yet reached Asia’.

Property valuations in Asia, he said, will probably bottom out in the second half of the year, but there was no telling when the recovery will come.

Also speaking during a panel discussion on the impact of the downturn on Asian real estate, Mr Blake Olafson, Arcapita’s head of Asia real estate group, said the industry was now focusing on the basics.

He added: ‘If you’re a pension fund manager, that’s what you’ll do – not suddenly try to become a real estate developer in some Tier 3 city in China. There’s a greater sense of realism in the market, and a return to looking at fundamental cash flows, not just internal rate of return deals.’

Invista Real Estate chief executive Duncan Owen said Singapore, Hong Kong and Tokyo are attractive over the medium to long term as they have ‘quite large commercial markets’, sustainable economies and increasing market transparency.

The fact that the Singapore market is now badly affected like other markets is an opportunity for them, he added.

Invista, Britain’s largest-listed property fund manager, recently bought the Asian real estate business of Babcock & Brown, which gave it offices in Singapore and Hong Kong.

In his keynote address, Singapore’s Urban Redevelopment Authority group director (strategic planning) Richard Hoo acknowledged that the economic climate was now more challenging than during last year’s Cityscape Asia.

Today’s focus, he said, was on ‘enhancing our readiness’ when the economy improves.

Yesterday’s Cityscape Asia exhibition was quieter than previous events. Just 40 exhibitors have set up booths this year, and the organiser is expecting more than 3,000 people to visit over its three-day period ending tomorrow.

Last year, it attracted 5,520 real estate professionals and 70 exhibitors.

The 2007 event – inaugurated by National Development Minister Mah Bow Tan – drew 4,689 participants and 125 exhibitors.

Source: Straits Times, 20 May 2009

Property investors going back to basics

There’s more stress now on asset management

THE property investment landscape has changed significantly because of the global financial crisis, speakers at a panel discussion said yesterday.

For a start, investors are going ‘back to basics’, said Blake Olafson, director and head of the Asia real estate group at international investment bank Arcapita.

For example, pension funds that used to invest in riskier asset classes are now beginning to redirect their investments into less risky assets, he said.

Agreeing that the industry is going back to basics, John Evans, managing director of Tractus Asia, said: ‘Looking at it from a global economic perspective, the Asian real estate market had become a market where everyone was trying to get in, everyone was becoming a property developer.’

Mr Olafson and Mr Evans were speaking at Cityscape Asia, an annual real estate exhibition and conference aimed at investors.

The ‘back-to-basics’ approach includes a focus on making existing assets work harder.
‘There’s a lot more emphasis around true asset management, a shift towards hiring third-party facilities managers, and much more effort is going into tenant retention strategies,’ Mr Olafson said. ‘Before the downturn the focus was on building development, now asset management has become a lot more important.’

Players in the industry are going back to their core competencies and this, combined with tighter credit conditions, is driving a ‘flight to quality’ and a focus on assets that generate cashflows from day one, he said. ‘There is liquidity, but it is being driven towards good quality projects.’
Panellists agreed that liquidity is beginning to return to the Asian market, although banks are still very selective about which projects to back.

Speakers were also quizzed about when they expect real estate markets to emerge from the current slump. In response, the panellists said there was no way to put a timeline to recovery.

‘Everyone is trying to tell where the bottom is,’ said panellist Stuart Labrooy, chief executive of Malaysia’s Axis Reit Management. ‘I think the full effects of the recession have not reached Asia yet.’

Property valuations should start to bottom out in Asia in the second half of 2009, he said.

More than 3,000 real estate developers, investors and regulators are expected to attend Cityscape Asia, which focuses on all aspects of real estate development, on May 19, 20 and 21.

Source: Business Times, 20 May 2009

Asia-Pac market for factory space falls

Rents, demand for industrial property hit by financial crisis, says Colliers

(SINGAPORE) Industrial property markets in the Asia-Pacific region deteriorated from October 2008 to March 2009 as the global financial crisis rolled on, Colliers International said in a report yesterday.

And more declines are expected. ‘The economies of most cities in the Asia-Pacific region are likely to be in recession in the next 12 months notwithstanding the interest rate cuts and large stimulus budget,’ Colliers said. ‘As such, demand for industrial property is likely to stay weak.’

Except for Jakarta and Shanghai – where rents, land and capital values are expected to hold – those in other cities surveyed are forecast to decline as much as 30 per cent over the next 12 months.

In Singapore, average rents and capital values of factory space dipped 12.8 per cent and 17.6 per cent respectively between October 2008 and March 2009, compared with growth of 6.4 and 6.9 per cent in previous April-September 2008 review period.

‘The decline in exports as a result of the contraction in global demand led to excess capacity at manufacturing plants and prompted many firms to shelve expansion plans or downsize premises, leading to lower demand for industrial property,’ Colliers said.

Weakening exports also resulted in softer demand for warehousing space. Average rents and capital values of this space dropped 13 and 13.3 per cent respectively in the six months under review.

The Singapore government has cut its 2009 economic growth forecast to between minus-10 and minus-13 per cent, from between minus-6 and minus-9 per cent. And this will weigh heavily on demand for industrial property in the next 12 months, Colliers said. It reckons land prices, capital values and industrial rents here could drop as much as 15 per cent in that time.

Rents for high-spec industrial building space will also be hit, according to Colliers. ‘Moving forward, the influx of high-spec space completing in 2009, amounting to an estimated 2.5 million sq ft, coupled with sluggish demand, are likely to exert downward pressure of up to 30 per cent on rents in the next 12 months,’ it said.

Source: Business Times, 19 May 2009