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US funds; liquidating...

Secondary real estate market quietly ramps up

Thu Sep 20, 2007 9:15am EDT

NEW YORK (Reuters) - The dizzying pace of commercial property acquisitions over the past year has down-shifted into a new phase as real estate investors shuffle their portfolios and try to resell holdings.

The normally illiquid secondary real estate market should see significant new interest as antsy limited partners consider selling to more enthused institutional investors or new funds dedicated to the secondary market.

"For the first time in several years institutional limited partners are taking a hard look at their real estate portfolios and deciding what they want to keep," said Scott Landress of Liquid Realty Partners, a San Francisco-based firm that has acquired more than $1 billion in secondary property interests.

A wobbly economy has spooked commercial property investors as some rental rates hit all-time highs and wary lenders pulled back after years of issuing cheap debt that pushed up prices paid per square foot.

Institutional investors are also reckoning with a drop in the stock market that disrupted the balance of investment portfolios, leaving some funds over-exposed to real estate relative to their targeted allocation.

Buyers in the secondary real estate market continue to be burdened by relatively small investments that must be pieced together to build a portfolio of meaningful size. But they are likely to see more liquidity as sellers come to market not only for profit-taking, but also to diversify their holdings or reposition their investments in order to extend a fund's life.

LOOKING TO SELL

An eruption in real estate investing that trailed the property boom now has managers revisiting their portfolios for style, sector and overlaps with other funds.

"We are in dialogue with a number of large institutions looking to sell real estate portfolios," said Michael Hoffmann of San Francisco-based adviser and placement agent Probitas Partners. "Some positions will be sold off for administrative efficiency, as institutions haven't grown their staffs to match the growth in real estate fund manager relationships."

The California Public Employees' Retirement System (Calpers), the largest U.S. pension fund, has considered steps to increase efficiency by reducing managers, according to information officer Clark McKinley.

"We have the same problem in real estate that we have with private equity: it grows like top seed," McKinley said. "You keep getting partners and new partners and pretty soon you've got scores of them and limited staff."

Fund managers are also looking to expand real estate portfolios overseas to tap relatively attractive markets.

"Increasingly investors are seeking international exposure, so it's likely there will be more secondary trades of domestic funds and reallocation of capital internationally," said Edward Casal of real estate investment firm Madison Harbor Capital.

Indeed Calpers, with 8 percent of its portfolio, or $20 billion, allocated to real estate, recently recommended over time making half of all its property investments abroad.

CAPITALIZING ON INCREASED FLOW

Liquidity in the secondary market may give both general and limited partners room to maneuver through tough times.

"This would be a bad market to sell into," said Bill Atwood, executive director of the Illinois State Board of Investment. "It's got to be difficult if you're a general partner coming to the end of a fund. It wouldn't surprise me to get a call from a general partner asking for a one- or two-year extension."

With motivated sellers often unloading at a discount, secondary transactions are often kept quiet -- making them tough to track.

To indicate the potential size of the market, Landress points to Liquid Realty's acquisition last year of a portfolio of interests in 10 UK property funds valued at $775 million at the time of closing.

This year the company bought real estate fund interests valued at $60 million from a European corporation that decided to liquidate its portfolio, Landress added.

With real estate positions often substantially smaller than those examples, historically it's been difficult to combine enough investments to make secondary real estate acquisitions an attractive business.

But with more interest, the secondary real estate market could eventually resemble the one for private equity positions -- which set an annual fund-raising record of $13 billion in the first six months of this year, topping last year's total of $6.1 billion, according to Probitas.

"Many secondary funds oriented toward private equity will look to bring on real estate talent to capitalize on this increased flow of fund positions," said Hoffmann of Probitas.

 

India; US rate cuts hint at India rise..

Business
Realty stocks take Sensex to new peak

Mumbai, Sept. 20 (PTI): Realty index today gained 579.86 points on the BSE on expectations that RBI would cut home loan rates following the US Federal Reserve's decision to reduce the benchmark interest rates by 50 basis points.

The steep rise in realty and heavy machinery stocks supported the Sensex rise by 25.20 points or 0.15 per cent to 16,347.95.
The realty segment index rose 1,120 points in the last four trading sessions to touch 9,044.40 points at the end of trade today.
The realty stocks maintained their upward march, on expectations that interest rates may go down in line with the reduction in the key rate announced by the US Federal Reserve on Tuesday night, marketmen said.
The maximum gainers on the realty stocks included DLF, Unitech and Indiabull Real. DLF moved up by Rs 36.60 to Rs 749.85, Unitech by Rs 36.40 to Rs.329.15 and IndiaBull Real by Rs 49.40 to Rs 573.90 on heavy purchases by foreign and domestic funds.
Shares of Soba developers also shot up by Rs 30.25 to Rs 826.25.
Other prominent gainers were Akruti Nirman by Rs.10.85 to Rs 728.55, Ansal Infra by Rs 8.70 to Rs.299.55, Omaxe Ltd by Rs 3.85 to Rs 360.80, Penland Ltd by Rs 15.15 at Rs 602.00, Puravankara by Rs 9.05 at Rs.424.05 and Housing development by Rs 2.05 to Rs 647.45.

 

malaysia

Mapletree eyes more industrial real estates in Malaysia

 

September 12 2007

 

PRIVATE real estate fund Mapletree Investments Pvt Ltd (MILF) is eyeing more industrial real estates in Malaysia for acquisition, its executive vice president for capital management Phua Kok Kim said today.

MILF is scouting for viable acquisitions in Johor, Kuala Lumpur, Penang and Malacca, he said.

Phua said MILF is focused mainly in manufacturing facilities, business parks, industrial parks, research and development facilities, information technology and software parks, and industrial offices in various Asian countries.

Besides Malaysia, it is in the China and Singapore markets, he told reporters after a sales and purchase agreement signing ceremony to buy a parcel of land together with six blocks of factories and one office block, including mechanical equipment, in Johor Baru from LCTH Corporation Bhd’s subsidiary, Classic Advantage Sdn Bhd, for RM80 million.

The purchase was undertaken via its nominee Mapletree MIF 2 Sdn Bhd.

Phua said MILF has a RM200 million allocation to purchase various industrial real estates in Malaysia.

“We are in talks with some (but nothing substantial as yet),” he said.

He also said that MILF might subsequently list the properties in real estate investment trusts (REITs) in Singapore. — Bernama

 

REITS..time to buy?

September 16, 2007
Square Feet | Ventures
REITs, Down Sharply, May Be a Good Buy
By VIVIAN MARINO
SOME investors might pronounce the heady days for real estate
investment trusts to be over, judging by their market performance this
year.

After seven consecutive years of extraordinary gains, REITs are
posting negative returns. Equity REITs, which own commercial property
and constitute the bulk of the market, had slid 7.73 percent, on
average, from the start of the year through Thursday (though they have
been improving of late), according to the National Association of Real
Estate Investment Trusts. Losses for mortgage REITs, which originate
loans and invest in mortgage-backed securities, were a staggering
43.62 percent on average in that period, the association said.

This year's slump has been attributed in part to profit taking (in
2006 alone, REITs returned 34.4 percent, on average, versus 15.8
percent for the Standard & Poor's 500 stock index), as well as the
frenzy over subprime mortgage defaults.

But some analysts think that the decline has been too severe and that
many REITs are poised for a comeback. Even as the market was swooning,
Standard & Poor's issued a report this summer offering a positive
outlook for many property groups, including the industrial, office,
retail and specialized REITs like lodging, self-storage and timber.

Keven Lindemann, the director of the real estate group at the research
company SNL Financial, said he agreed that "the fundamentals appear to
be fairly strong on most of the property sectors." And, depending on
an investor's time horizon, he added, "maybe that means it's a buying
opportunity."

So how do investors decide which REITs are worth acquiring now? Here
are six crucial areas to consider.

MANAGEMENT Ralph L. Block, the author of "Investing in REITs"
(Bloomberg Press, 2006) and publisher of The Essential REIT
newsletter, thinks strong management is paramount.

"With most REITs you're not simply buying commercial real estate — you
have no ability to decide which assets to buy or sell; you can't
control the development activity or the balance sheets — what you're
really doing is relying on a management team to make good, sound
long-term decisions with regard to a real estate company," Mr. Block
said.

To help evaluate a team, he said, compare the company's performance
with its peer group over the last five years. Profitability and asset
appreciation are closely associated with managers' ability to choose
the right investments and best strategies.

Leadership is important, too. "Are these the go-to people in their
sector, and are they the most likely to get the first call and the
only call in various transactions?" said John J. Kriz, the managing
director of real estate finance for Moody's Investors Service.

ASSET QUALITY Because real estate markets fluctuate by location and
property type, diversification can be a crucial ingredient to a REIT's
overall success.

"What you like is a company with leadership in multiple areas," Mr.
Kriz said. "Having all your eggs in one basket can be risky. If the
Florida economy starts coming undone, that may weaken the value of
those assets there, but if you have assets elsewhere, you can
compensate for that."

(Brad Case, the vice president for research and industry information
at the National Association of Real Estate Investment Trusts, calls
that "granularity — it means that if one of my investments blows up,
my others won't have the same problem.")

Mr. Block recommends owning REITs with higher-quality assets in
healthy urban areas right now, rather than in suburban markets,
"because those assets are going to be more in demand by a more stable
renter group. People are always going to want to be in Manhattan."

Mr. Lindemann agreed that sticking with the tried-and-true was helpful
in uncertain times. "You probably don't go wrong," he said, "by
looking at some of the largest companies that have dominant positions
within their sectors and have experienced management teams that have
been through the up cycle and down cycle and they don't get overly
exuberant when things go great or overconcerned when going down."

GROWTH PROSPECTS The best-run REITs are continually expanding —
acquiring new properties as they shed some of their existing ones, or
planning future developments. "You'll want to know about their
development pipeline," Mr. Block said.

Some companies will also branch out into other areas, like, say,
providing financing or management services for property outside the
REIT; a balanced mix is best. Additional income can be derived as well
by raising rents and fees, along with reducing debt.

Mr. Kriz, though, asserted that it is important for REIT companies to
have ample access to the capital markets to expand. "Because REITs
need to 'dividend' essentially all taxable earnings every year,
they're fundamentally incapable of retaining much of any cash," he
said, "and so a REIT cannot generate liquidity on its own by retaining
income."

BALANCE SHEET The funds from operations, or F.F.O., is a good way to
measure cash flow and profitability.

Unlike the figures used by most corporations, F.F.O., sometimes quoted
on a per-share basis, is calculated by adding in depreciation and
amortization expenses to earnings. The price-to-F.F.O. ratio, a common
valuation tool to determine whether a REIT is cheap or expensive, is
derived by dividing the price of a REIT's stock by the sum of its
funds from operations for the previous four quarters.

"Look carefully at the volatility of the returns — stable earnings
means earnings that I can count on to pay my dividends and to service
debt," Mr. Kriz said. Also, he said, "the more leveraged the company
is, the smaller its margin of safety to address reverses in operating
performance."

What's reasonable? "Between 45 and 55 percent total leverage," Mr.
Block said, "though there are some property sectors like malls where
leverage can get up to 62 percent."

VALUE As with any investment, the idea, of course, is to buy low and
sell high, though knowing when to jump in can be difficult for average
REIT investors. Looking at the net asset value, or N.A.V. — the value
of a REIT's properties minus its debt, or the equity it owns in its
properties — can help.

"The value of the REIT should be equal to the value of the underlying
assets with some discount or premium given to the quality of the
management," said Mr. Case of the REIT association. Right now, he
said, citing industrywide data, REITs are trading at a significant
discount to asset value. But "the bigger the discount to N.A.V.," he
said, "the better you can expect the returns to be."

YIELD Dividends are the reason most people buy REITs in the first
place. The companies, after all, are required to disburse most of
their profits as dividends to shareholders in exchange for
preferential tax treatment. Last year, REITs paid out about $15.5
billion in dividends, according to the REIT association.

But simply chasing dividend yields is not advisable. Make sure the
dividend yield is in line with its peer group, experts say. The
average dividend yield — the share price divided by the annual
dividends — now is 4.28 percent, though REITs in out-of-favor sectors
typically have higher dividends, like home financing and commercial
financing, which are 11.95 percent and 14.83 percent, according to the
association.

WHERE TO FIND INFORMATION... The best place to go is online. Most of
the 190 or so publicly traded REITs maintain Web sites. But the most
detailed information can be found at the sites of the National
Association of Real Estate Investment Trusts (nareit.com or
investinreits.com), which offer material like regular price quotes,
historical performances by sector and links to individual company
sites.

Other REIT sites include reitcafe.com, which provides access to
interviews with REIT executives, analysts and institutional investors,
along with podcast programs and links for blogs, and
reituniversity.com.

Financial and brokerage firms, meanwhile, will have analysts who
follow the real estate industry and can provide data. Also, many
public libraries carry Value Line Investment Survey, which publishes
weekly reports on publicly traded companies. In addition, Standard &
Poor's sells research reports.

e europe

Fund managers to target East Europe property
WILLIAM LYONS

TWO Scottish fund managers have returned home to set up a property
investment vehicle aimed at the burgeoning Eastern Europe market.

Castle European Estates, founded by David Stewart Howitt and Robbie
Morrison, will focus on investment opportunities in the real estate
sector in emerging Europe and Transcaucasia.

The firm, which will open in Edinburgh's Rutland Square tomorrow, is
understood to be in the process of raising more than £100m worth of
funds from institutional investors in the UK, Europe and the Middle
East.

Stewart Howitt, a former economic adviser to the Foreign and
Commonwealth Office who has spent the last 12 years in the region,
said the company was ideally positioned to help investors access the
opportunities within the rapid economic growth of these countries.

He said: "We will be looking at transition economies in emerging
Europe, principally non-EU and non-Russia. The economies in those
regions are not benefiting from either Russian growth, Russian near
abroad investment dynamics or Europeanisation.

"On the real estate side we would be looking at returns from 20% plus.
We aim to achieve this through the nature of change where regional
economies, national economies and sub-regional economies move from one
status to another. As a result you get an uplift because of increased
domestic demand.

"Thus far these economies have held up quite well. Emerging markets
have historically always taken a very early and substantial hit in
circumstances not dissimilar to what we are seeing in the global
market economies now. But the principle factor driving change is the
domestic growth issue and the key driver is the tipping point in the
transition to a full market economy."

Castle European is a 50-50 joint venture between EMAC Capital, an
alternative asset manger focused on private equity and real estate
investments in Eastern Europe, and Osprey Asset Strategies, a
specialist international real estate sector asset manager. Its core
business will be in the transition markets of Eastern Europe and
Transcaucasia such as Serbia, Croatia, Bulgaria, Romania, Ukraine and
Georgia. Secondary markets are Bosnia Herzegovina, Macedonia,
Montenegro and Moldova.

Asked why he was setting up the business in Edinburgh Stewart Howitt
said: "Edinburgh is a major financial centre with an appetite for
superior returns and a long tradition of successful foreign
investments."

The company also has a number of strategic development partnerships in
place including with the Edinburgh headquartered RMJM, an
international firm of architects with offices throughout the UK,
Europe, US, Asia and the Middle East.

Castle European chief executive Robbie Morrison said: "Our investment
model is designed to maximise the opportunities, while de-risking
investment into these markets. Our approach is based on an extensive
experience of real estate investing and development, combined with an
in-depth knowledge of our target markets.

"This approach, supported by our strong local network of offices,
ensures we have a unique understanding of the investment landscape in
the region as well as the cultural, political and economic
environment."

woes?

ETF INVESTING
New ETFs capture foreign real estate stocks
As U.S. market sputters, trio of funds invest in overseas land developers
By John Spence, MarketWatch
Last Update: 3:27 PM ET Aug 19, 2007
BOSTON (MarketWatch) -- Now that U.S. commercial real estate stocks
have followed the residential housing market into the gutter as
mortgage woes spread, more investors are looking to put overseas
properties in their portfolios.
Investors are getting help in pursuing international realty stocks
from a trio of low-cost, diversified exchange-traded funds. The
increasing number of options comes as institutional investors such as
pension funds have been ratcheting up exposure to commercial real
estate and are increasingly searching overseas to further diversify
their stock and bond portfolios.

Focus on funds, ETFs

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exchange-traded funds. Highlights:

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Get our free Mutual Funds weekly

But the ETFs are not without risk, as the credit crunch is making its
presence felt around the globe. Real estate stocks worldwide may
endure heightened volatility as investors struggle to grasp the extent
of the damage in the mortgage market.
One of the easiest ways to participate in the market is through real
estate investment trusts, or REITs. These publicly traded companies,
which were established by the U.S. government in the 1960s, own and
operate commercial real estate properties such as apartments, offices
and warehouses. They are required to pay out 90% of their taxable net
income to shareholders in the form of dividends.
So-called equity REITs manage income-producing real estate, while
mortgage REITs, which have come under fire recently due to problems
rippling out from the subprime sector, lend money and collect the
interest payments.
Heading into 2007, U.S.-based REITs had outperformed the stock market
for seven years running. But the sector has suffered a sharp pullback
so far this year and the feverish pace of merger-and-acquisition
activity has slowed. Through Aug. 17, the Dow Jones Wilshire REIT ETF
(RWRDJ Wilshire REIT ETF
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Sponsored by:
RWR) was down 13.3% and was lagging the S&P 500 Index (SPXS&P 500 Index
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Sponsored by:
SPX) by 14 percentage points, according to investment researcher
Morningstar Inc.
The SPDR Dow Jones Wilshire International Real Estate ETF (RWXSPDR DJ
Wilshire International Real Estate ETF
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Sponsored by:
RWX) had been holding up relatively well until liquidity fears really
started to shake markets last week. It was off 9.9% year to date
through Aug. 17. State Street Global Advisors launched this first ETF
tracking foreign real-estate stocks in December 2006, and it has
gotten a warm reception, recently breaking through $1 billion in
assets.
The ETF, which has an expense ratio of 0.6%, recently got some competition.
On June 5, WisdomTree Investments Inc. (WSDTwisdomtree invts inc com
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WSDT) listed WisdomTree International Real Estate Fund (DRWwisdomtree
trust intl real est
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Sponsored by:
DRW) on the American Stock Exchange, with fees of 0.58%. And earlier
this month, Barclays Global Investors got into the game with iShares
S&P World ex-U.S. Property Index Fund (WPSishares trust s&p wld ex-us
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WPS) , which levies 0.48% and trades on the New York Stock Exchange.
The ETFs run by Barclays and State Street weight companies by market
capitalization, while the WisdomTree offering takes a different tack
by weighting stocks by their dividend yields.
Australia, Hong Kong, Japan and the U.K. tend to be among the largest
country allocations for all three ETFs. Top holdings include companies
such as Westfield Group (AU:WDC: news, chart, profile) ,
Unibail-Rodamco (FR:012471: news, chart, profile) and Land Securities
(UK:LAND: news, chart, profile) .
The case for international real estate
Institutional investors like investing in commercial real estate for
the income and noncorrelation benefits, since the asset class tends to
behave differently than stocks and fixed-income investments. To
diversify even further, they're looking to foreign shores.
"U.S. investors have started to appreciate the size of the
international real estate market," said Amos Rogers, managing director
of Boston-based Tuckerman Group, which is a real estate investment
advisory firm and member of State Street Global Alliance LLC.
"The primary driver is investors seeing the low correlations and
diversification benefits," he said. A cornerstone of portfolio
management is that investments that zig when others tend to zag can
reduce overall risk.
Additionally, investors are concerned about valuations in U.S.
real-estate stocks after years of outperformance, Rogers said. "Some
international markets are just starting to grow, and there are better
values perceived to be had overseas," he added.
The size of the international REIT market has grown in recent years as
more countries have adopted the U.S. structure, which provides better
transparency and reporting standards. "I believe REITs will become the
predominant vehicle for publicly traded real estate in the future,"
Rogers said.
However, the ETFs invest in publicly traded real estate management and
development companies that don't have the REIT structure.
May be bumps
"We like international real estate stocks because the valuations are
better," said Marc Rappaport, senior managing director at Alpine Woods
Capital Investors LLC.
Still, he said the current credit shake-up could lead to bumps for
real estate stocks around the globe. "Companies can be very strong,
but you're thrown into market psychology, which is driven by fear and
greed," Rappaport said.
Fears in the mortgage markets have spilled over to affect financials
and real estate companies. "It's something to keep an eye on, and we
take it seriously," he said.
Bruce Lavine, chief operating officer at WisdomTree, said the New
York-based firm heard strong demand for international real estate
ETFs.
"There are not a lot of options or alternatives for international real
estate for the investor on the street," he said. "Investors have had a
good run with domestic real estate, but now the international market
is looking cheap relative to the U.S."
These days, about half of the companies that are classified as REITs
reside outside the U.S., according to Jane Leung, a portfolio manager
at Barclays Global Investors.
"As we continue to see increased interest in international investing,
there will be more products like this," she said. The new ETF "can be
an excellent investment for those who want to broaden exposure to
international real estate markets and REITs," Leung said, adding that
it can also provide another source of yield as well as capital
appreciation.

las vegas

September 10, 2007

Kind Of A Downward Spiral In Las Vegas

The Chicago Tribune reports on Nevada. "The upscale San Niccolo
neighborhood to the south of this city's bustling Strip once offered
the real estate equivalent of the town's loosest slots. The guy who
sold Karen Lewis her house for $435,000 in June 2006 raked in a
$200,000 profit after holding it less than two years, she figures.
'Houses were really cheap. Loans were really easy,' said Lewis, who
moved from California. 'These were investors who didn't ever live
here. Now, they're totally walking away.'"

"Those who failed to cash out ahead of the bust have left
owner-occupants such as Lewis stranded in a lonely landscape. Almost
half of the 30,000 homes listed for sale in the Las Vegas metropolitan
area stand vacant, making it that much tougher to sell the rest, said
Frank Nason, president of Las Vegas real estate firm Residential
Resources."

"'It's kind of a downward spiral,' he said. 'In the next year or two,
it could get a heckuva lot worse.'"

"From her front door, Lewis stares across Arcata Point Avenue at the
for-sale signs on two abandoned houses in foreclosure. The house next
door stood empty for months as well."

"Lewis said she intends to stick it out. Anyway, she added, 'I'm sort
of stuck. If I were to move, I would take a bit of a loss.'"

In Business Las Vegas. "Las Vegas Realtor Eric Young prides himself on
being a numbers guy, and when it when comes to the local housing
market, the numbers paint an awful picture."

"In the last six weeks, the average home prices are down 2.6 to 3.5
percent, Young said. The price per square foot that many homes are
selling for today is the same as it was in early 2004 when the market
was still appreciating, he said."

"'It is far worse than the numbers are showing,' said Young, echoing
what a few others have been saying about statistics on the housing
market. 'If you start to dig into the numbers, the research shows the
prices for the same home are declining greater than the averages are
showing.'"

"A North Las Vegas house a client bought a year ago for $399,000
couldn't sell for $350,000 Young said. Comparable homes sold for
$310,000 to $320,000, prompting the owner to take it off the market,
he said."

"A home the same person sold a year ago in North Las Vegas for
$320,000 is on the market today for $247,000, Young said."

"'We continue to see an increase in listings every single day,' Young
said. 'The supply is growing and the number of closings are declining
every month. We now have a situation where you have a breakdown in the
mortgage market. It is difficult to see when that will turn around.
Clearly the market is not going to turn around until the mortgage
situation is straightened out. And the easy credit is never coming
back.'"

"The high rise and mid-rise condo markets continue to weaken as demand
has softened and supply continues to increase - a problem that will
worsen as more and more projects come on line in the next year,
analysts said."

"Las Vegas is facing problems that are emerging in other markets and
are a byproduct of the speculative boom of 2004 and 2005. Buyers who
signed contracts two to three years ago may not be able to close when
those projects are completed. In some cases, they may not be able to
get financing from lenders and in other cases buyers may walk away."

"'We are hearing the potential that some of the units aren't going to
close,' said John Restrepo, principal of Restrepo Consulting Group
that tracks the condominium market. 'Some people are walking away
because of the credit markets or because what they agreed to pay is
not what they thought it would be worth today.'"

"There are 5,849 luxury condominium units in Las Vegas and another
14,149 units under construction, according to Applied Analysis. By the
end of the second quarter, 718 resale luxury units were on the market,
Applied Analysis reported."

"'I hear from condo owners every single day. They bought it to flip it
and they can't sell it,' added Eric Smith, owner of Colorado-based
Corporate Housing By Owner."

"Bruce Hiatt, co-owner/broker of Luxury Realty Group, said he expected
a window of about 12 months in which there would be an oversupply of
condos, calling it the 'perfect storm.'"

The Las Vegas Business Press. "The Falconi Group recently named its
third general contractor for the planned $740 million, 1,100-unit
condominium-hotel development at Tropicana and Cameron avenues, across
from The Orleans."

"Dick Pacific Construction's involvement has since lowered the project
price by 13 percent. Pinnacle Las Vegas was cited as an $850 million
development in July. Yet the basic makeup of Pinnacle Las Vegas hasn't
changed."

"Pinnacle Las Vegas comes during a market adjustment with a glut of
available inventory and several project cancellations. 'Buyers want a
prime location for the cost they are paying and they can get real good
deals,' said Bruce Hiatt, owner of a Las Vegas high-rise residential
specialist. 'If it's not well-located and branded, projects are going
to face challenges. There is about two years of resale market
inventory.'"

"'Only 12.9 percent of the market's planned 27,268 luxury
high/mid-rise condo units had been completed in the second quarter,
whereas 49.5 percent had been canceled or suspended,' says John
Restrepo, principal of Restrepo Consulting Group."

The Review Journal. "The drumbeat of bad news on residential mortgages
continued, as the Mortgage Bankers Association reported that new
foreclosures and past-due loan numbers increased in Nevada during the
quarter ending June 30."

"Bill Ochs Jr., owner of Nevada Mortgage, blames a large portion of
the problem loans on investors. 'Speculators and investors came from
anywhere and everywhere just to see if they could make a fast buck (in
Nevada),' Ochs said."

"Now, speculators are defaulting on mortgage loans, he said,
mentioning one investor who allowed 40 single-family homes to go into
foreclosure."

"Southern Nevada's economy, dragged down by the slumping housing
industry, posted another month of modest performance. New and existing
home sales dropped 40 percent and new home permits are off by 45
percent, contributing to a 0.11 percent decline in the Southern Nevada
Index of Leading Economic Indicators."

"The number of new residents moving to Las Vegas dropped by
double-digit figures for the third consecutive month, to 6,168 in
July. Seeing all the vacant homes, Andrew Pugh of SellFastLV.com
wonders how many people are leaving Las Vegas, though he's certain
more people are coming than going."

"'It's just unfortunate we can't nail down the historical numbers and
really figure out if the current numbers are changing significantly,'
he said. 'My contention is that the lack of white-collar jobs and
relatively high housing costs would eventually slow down the
migration, but without good data, it's hard to know for sure.
Affordable housing was one of the big draws and now that's pretty much
gone, for now.'"

The Las Vegas Sun. "People lose homes in Las Vegas every day because
they can't pay the mortgage. But when real estate agents and brokers
start hitting the wall financially, it perhaps is a sign of even more
troubling trends in the home sales market."

"Jimmy Dague, who has sold real estate in Las Vegas since 1978 and
whose business was the No. 1 worldwide in sales for Century 21 from
2002 to 2006, filed last week for Chapter 11 bankruptcy protection
from creditors while he reorganizes to pay off his debts."

"'This is the result of an exuberant market and us growing and,
honestly, I had signed leases for nine offices. Now I have five,' he
said. 'As you can imagine, the four landlords are not happy.'"

"A year ago, he said, 700 real estate agents worked in his nine
offices. Today, he has five offices and about 500 agents. He also has
cut 50 percent of his hourly staff."

"'Wow,' said Jeremy Aguerro, principal of Applied Analysis. 'Is it a
harbinger, a sign that our economy is shifting?'"

"The causes? Home prices inflated beyond the means of those who would
normally buy them, rising interest rates and a halt in buying by
investors."

"And in Dague's words, 'perception.' 'If someone thinks if they only
wait a few months, they'll be able to get that $400,000 house for
$350,000, they're going to wait it out,' he said."

"Are they right to do that? 'Right now, they probably are,' he said."

thailand, residential

Saturday, September 15, 2007
Million-dollar homes for Koh Samui
Koh Samui, once a popular island getaway for backpackers, is turning
into Thailand's latest market for million-dollar villas, international
real-estate firm CB Richard Ellis (CBRE) said Tuesday. "Although 50
per cent of the villa developments in Samui are in the $1 million and
below price range, we are spotting an emerging market for top-end
villas which achieve prices in excess of $2 million," said Prakaipeth
Meechoosarn, manager of CBRE's newly opened Samui office.

some US funds focused on non US....

Killam Properties (Canada)??

The betting money is CAP Real Estate Investment Trust (CARu/TSX) is enamoured with Halifax-based Killam Properties Inc. The speculation is based on CAP REIT’s disclosure that it had made a $26-million investment in a public company.

CAP REIT has not identified where the money has been invested in. That means the REIT’s stake is below 10%, the threshold for reporting holdings of a public company under securities rules.

“While it is just speculation, it is clearly possible that CAP REIT’s investment is in Killam, said Mark Rothschild, an analyst with Genuity Capital Markets, in a note to investors.

Killam stock has returned almost 15% since CAP REIT made its disclosure in conjunction with its second quarter results, the analyst notes.

Mr. Rothschild says at a price of $10.50 per Killam share the acquisition could add 3¢ per share to adjusted funds from operations for CAP REIT in 2008. That estimate is based on CAP REIT issuing new equity for the purchase and some administrative savings being found from combining the two entities.

better version

Sept 7 update

Top end of Irish market

from IHT

Sept 6 2008

Sent from Snipping Tool

http://finance.google.com/finance?q=awp&hl=en

India...housing...

Indian developers eye mass market as prices fall

September 4th, 2007 · No Comments

Property stocks depressed on worries about housing market

(MUMBAI/HONG KONG) After a two-year surge, home prices in India have dropped as much as 20 per cent because even the most upwardly mobile tech graduates can no longer afford to buy, forcing developers to consider building for the poorer masses.

‘We’re at a point where growth in salaries has not kept pace with property price increases,’ said Hari Krishna, of Kotak Realty Funds, a unit of Kotak Mahindra Bank that has been raising US$350 million for property joint ventures in India.

‘Many developers are rationalising prices across the country, and certain sets of people are saying there’s a need to focus more on either the luxury or the mass market.’

Since India eased rules on inward property investment in early 2005, the country has swept into a dusty frenzy of construction, causing land prices to double in major cities.

Drawn by a thriving, 1.1 billion-person economy, where a new batch of graduates swarm out of technology parks eager to shop and go home to modern apartments, global property investors such as Citigroup and Morgan Stanley have rushed in.

A raft of developers such as DLF Ltd and Parsvnath Developers Ltd have listed on the Mumbai stock market to raise funds for expansion drives.

Annual property investment is projected to double to US$90 billion by 2010.

But a drop of around 20 per cent in residential transactions since January - as rising interest rates and soaring prices put India’s new rich off buying - has persuaded many developers to take a second look at their business models.

Prices have fallen 15-20 per cent in the New Delhi area and Punjab state, and have paused in Mumbai after sharp rises.

Most developers have been targeting the roughly one million families bringing in US$25,000-50,000 a year - for example, middle level accountants or software programmers.

Another million families are expected to join their ranks over the next three years, according to an economic thinktank, while the number of ’super-rich’ families with an annual income of more than US$250,000 is set to nearly triple to 141,000.

But with fierce competition to build high-margin apartments for the rich, some investors are starting to target the 53 million families earning US$2,500-5,000 a year - where the much-vaunted figure of a 20 million home shortfall originates.

An estimated 22 million families should be lifted out of poverty and into this segment of society by 2010.

Gross margins for the mass market are around 20 per cent, rather than the 30 per cent for high-end housing.

But developers can forge healthy businesses by building huge townships on non-prime land that is more easily acquired.

‘Our view is that building residential units for the lower middle class in that part of the world is pretty recession proof,’ said Alastair King, chief executive of Eredene Capital, which is listed on London’s Alternative Investment Market (AIM).

‘These are people taking out mortgages for the first time,’ he said, citing bank clerks, junior civil servants and hotel chambermaids as examples.

Bank exposure to housing loans tripled in three years to around US$60 billion in 2006, but that was only about 6 per cent of gross domestic product (GDP) - so industry players are unconcerned about any US-style mortgage default crisis.

Mortgage debt in the US and Britain is equal to about 50 per cent of annual GDP.

Eredene has invested an initial £pounds;16.4 million (S$50.3 million) in a joint venture that plans to build 185,000 units in Panvel, where a planned train link aims to cut the 90-minute commute to Mumbai by half.

Mr King said that blocks could also be sold en masse to Indian developers working on slum redevelopment projects in central Mumbai who are obliged to find new homes for people they evict.

Some investors are steering clear of residential homes altogether. ‘The residential market has taken a bit of a beating, but commercial prices are super buoyant and will continue to rise,’ said Vikram Mehta, associate director at Coldwell Banker, a unit of US real estate brokerage Realogy Corp.

‘Multinationals and Indian companies - everybody wants to expand.’

Worries about the housing market and recent stock market turmoil have depressed property stocks.

Yesterday, Puravankara Projects, the latest developer to list, was trading nearly 6 per cent below its issue price by 0549 GMT after making its market debut last Thursday.

The country’s biggest listed developer, DLF, has seen its stock fall 12 per cent from a peak reached a week after its July 5 market debut.

But analysts said the firm, which raised US$2.25 billion in its initial public offering (IPO), is undervalued and a planned move by the company into mass housing should be positive.

‘DLF is going into mass housing two years down the line, and that’s a good thing,’ said JPMorgan analyst Gunjan Prithyani, which has an ‘overweight’ recommendation with a price target of 725 rupees (S$27), or a 21 per cent upside.

‘Like Chinese companies, it’s a volume game rather than a margin game, but it has huge potential.’

 

singapore rents (small office)

INCITY Lofts, an eight-storey block of small office, home office (Soho) units at Beach Road completed about three years ago, is being offered for sale at a minimum price of $70 million or $1,149 per square foot (psf) of strata area.

 

The land lease tenure of the site has been extended to a full 99-year term starting April 2004, after the building was completed.

InCity Lofts, at 700 Beach Road, is being sold by its developer, In-Space Pte Ltd, whose shareholders are said to include Wee Chwee Heng of Kumpulan Akitek.

InCity Lofts comprises a ground-floor retail unit as well as 54 Soho units - ranging from studio units to maisonette penthouses - spread across the second to eighth levels of the building, which has a roof-top pool. There are also 24 surface and covered carpark lots on the ground level of the development.

 

‘The majority of the units in the development are leased; and leases are mostly short-term, hence the new investor can reposition or re-let the building and ride on the strong office rental market,’ said Cushman & Wakefield managing director Donald Han, whose firm is marketing the InCity Lofts en bloc sale through an expression of interest exercise that closes on Sept 28.

 

Nearby commercial buildings like The Concourse are operating near full occupancy with asking rents for office units in the region of $10 psf a month, Mr Han said.

 

Assuming InCity Lofts units are rented out conservatively at $6 psf a month and based on a minimum price of $70 million, the net yield for an investor works out to over 5 per cent a year, he added.

‘This is a top-end yield play for investors looking for an aggressive rental with capital appreciation growth,’ Mr Han said.

 

InCity Lofts has a land area of 18,401 sq ft and a fully built up plot ratio (ratio of maximum potential gross floor area to land area) of 4.15.

 

LSE listed... Plaza Centers...

Monday, September 3, 2007 (Mumbai):

International retail biggies Tesco and Carrefour may be holding back their India foray for now but international real estate developers like Plaza Centers are in no mood to slow down their India plans.

Europe's largest shopping mall developer Plaza Centers knows very well that the European retailers will make their entry here sooner rather than later. And that's why it is now getting ready for the action with brand new malls.

The LSE listed Plaze Centers will pump in Rs 5,000 crore in India to set up 50 shopping malls in next 5-7 years.

"We are in talks with all the International retailers. It’s a matter of time before they come to India. We are already working with many in Europe and we will seek to extend that relationship in India," said Eli Mazor, MD, Plaza Centers.

Plaza knows if it has to succeed in a market like India, it has to rope in local partners to overcome hurdles on the ground. The Dutch mall builder has already tied up with real estate developer Panchshil and is talking to many more for partnerships.

"We understand that we need to have partners and are mainly tying up with all the top real estate players. We will also engage with retailers who may be interested in developing retail real estate," said Abraham (Rami) Goren, Executive Vice Chairman, Elbit Imaging.

International real estate developers like Plaza Centers are now betting big on the Indian retail space, preferring it even over China. However, much will depend on how well they can execute their plans given real estate is the single biggest challenge that the Indian retail faces at present.

some Fund price changes last week

• CBRE Realty Finance up 34.06%,
• Crystal River Capital  up 16.94%,
• Gramercy Capital Corp/New York  up 15.52%
• American Financial Realty Trust  up 14.75%.

 

Article to go w/ the Carrefour post

http://www.bloomberg.com/apps/news?pid=20601085&sid=avKfkrv.vHok&refer=europe

 

Carrefour--their property REIT

The French supermarket owner, which reported a smaller- than-estimated increase in profit today, will sell a stake in Carrefour Property in an initial public offering next year. The unit will own 60 percent of Carrefour's 24 billion-euro real- estate holdings, the Paris-based retailer said today.

Billionaire Bernard Arnault and U.S. real-estate investment fund Colony Capital LLC jointly bought almost 10 percent of Carrefour in March and have pressed Chief Executive Officer Jose Luis Duran to sell property. Carrefour owns more than 1,000 superstores from China to Brazil.

 

Singapore; deals?

SINGAPORE: Like most other property-related counters, Singapore-listed real estate investment trusts or REITs have been sold down in recent weeks amid the market volatility.   As one analyst puts it, the last time he looked, the buildings were still standing, the offices still occupied and owners still collecting rents in a robust economic environment.

 

But it appears that investors are not seeing REITS in the same positive light.

 

According to a Goldman Sachs index, Singapore REITs have fallen by 11.8 percent over the past two months. That is a better showing than the 15.3 percent drop in its property stock index.

 

Analysts said a fearful climate has caused the market to under-appreciate the defensive qualities of REITs and overstate their risks.

 

Tony Darwell, Head of Asian Equity Research at Nomura Singapore, said: "When you look at say the Singapore office market, what we've seen is very, very strong growth in terms of capital value, but that strong growth in capital value has been driven by rents. We've not actually seen yields in the office market compressed."

 

A case in point is K-REIT. Its unit price fell by 20 percent over the last one month, while Keppel Land's share price dropped by just 6 percent.

 

Analysts said they remain positive about Singapore REITs. "There's definitely risk in terms of outlook in the US, but given the supply demand dynamic over the next 12 to 18 months, given an expectation that rental and rental growth is likely to be relatively robust, some of the REITs in the offering – Guoco Commercial REIT, Macquarie Prime REIT, Capital Commercial Trust – look quite interesting at current valuation," said Mr Darwell.

 

Analysts said REITs offer a much higher income payout than property stocks – often 100 percent, compared to 20 to 40 percent. They also believe that Singapore-listed REITs are trading significantly below their current asset valuation.

 

 

falling non US realty (publicly traded) prices

The iShares FTSE/Xinhua China 25 Index (FXI - fell $10.02, or 6.6%, to $143.05. The SPDR S&P China (GXC - was losing $5.15, or 6.4%, to $75.35. The PowerShares Golden Dragon Halter USX China (PGJ -) was lower by $1.40, or 5.1%, to $26.39. The iShares MSCI Singapore Index (EWS -) was sliding by 49 cents, or 3.7%, to $12.81.

Homebuilders and real estate ETFs were suffering after the latest data on the health of the housing sector. Shortly before the opening bell, the S&P/Case-Schiller Index of home prices showed a 3.2% drop during the second quarter, the biggest decrease since the index began 20 years ago. The release comes one day after a disappointing report on existing home sales and inventories sank homebuilder and real estate ETFs.

The iShares Dow Jones U.S. Home Construction (ITB -) was down 96 cents, or 4.1%, to $22.66. The SPDR S&P Homebuilders (XHB - -) gave back 78 cents, or 3.2%, to $23.74. The Ultra Real Estate ProShares (URE) gave back $1.33, or 3.1%, to $41.39. The iShares FTSE NAREIT Mortgage REITs (REM -) was off 66 cents, or 2.2%, to $29.59.

 

Ascendus India Trust

Singapore-based Ascendus India Trust has scored a major first by launching the first ever initial public offering (IPO) which raised funds on the Singapore Stock Exchange with the aim of owning real estate in India. The IPO size was 500 million Singapore dollars.

The investors were indicated that they could expect an yield of 4.75% in FY08 and 5.81% in FY09 on their investment in AIT shares.

. . . in a research study on real estate scenario in India, JPMorgan has said the industry is in the foothills of a sustained growth period. It expects the industry to grow from $50 billion in FY07 to $90 billion by FY11.

 

LaSalle on asia buying binge

Jack Chandler, Asia-Pacific chief executive officer of LaSalle Investment, said recent turmoil on global financial markets could slow some of the rapid price rises seen in the region by eliminating more speculative investors.

"I think Asian asset prices will be flat for a while and go down in some markets but I don't think we'll see the kind of corrections we saw in the UK or the U.S...In some ways, taking a little bit of liquidity out of the system is a very good thing for us as real estate buyers," Chandler told Reuters.

http://in.reuters.com/article/businessNews/idINIndia-28971820070814

 

vietnam and foreigners

Ok, opening up; wanna buy something in Ho Chi Minh city?  Beach property by Da Nang?  Que?

 

http://english.vietnamnet.vn/biz/2007/08/731165/

 

ok maybe a derived way to profit (vietnam)

Malaysian property firm to develop in Vietnam.  (I love the outlook for Vietnam; no clue how to profit from the RE uptick..??

 

http://vietnam-realestate.blogspot.com/

 

Trump opining

He’s not short of opinions or money…

 

http://www.trumpuniversity.com/blog/index.cfm