WPC News Center

California Housing Market Enjoys Impressive Price Gains in April, Median Now Above $300,000

2012-05-16T19:10:18Z

]]> According to the California Association of Realtors (CAR), California home sales and median price both jumped in April, with sales shooting up to their highest level in more than two years, while the median price rising above $300,000 for the first time in 16 months.

"A brighter economic picture, coupled with record-high housing affordability, pushed the spring home buying season off to a strong start," said C.A.R. President LeFrancis Arnold. "With a continuing improving economy and interest rates declining to new record lows in recent weeks, we should see a steady improvement in the housing market throughout the end of the year."

Closed escrow sales of existing, single-family detached homes in California rose to a seasonally adjusted annualized rate of 555,300 units in April, according to information collected by C.A.R. from more than 90 local Realtors associations and MLSs statewide. Sales in April were 10 percent higher than March's pace and 11 percent higher than in April 2011. The statewide sales figure represents what would be the total number of homes sold during 2012 if sales maintained the April pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The statewide median price of an existing, single-family detached home climbed 5.7 percent in April to $308,050, up from March's revised $291,330 median price and 4.7 percent from a revised $294,140 recorded in April 2011. The median price rose above the $300,000 mark for the first time since December 2010.

"The median home price climbed for the second straight month with solid gains from both the previous month and year," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "A sales improvement in the higher price segments of the housing market was a contributing factor to the price increase, as non-seasonally adjusted sales of homes priced higher than $500,000 increased nearly 11 percent, while sales of homes below $500,000 edged up a modest 2.1 percent."

"Additionally, the strong sales increase of higher-priced homes resulted in a considerable decline of inventory of homes in the higher price ranges when compared with last year. This signifies the tight supply conditions we've been experiencing in the lower price ranges over the past several months are now extending into the upper price ranges."

Other key points of C.A.R.'s April 2012 resale housing report include:

California's housing inventory remains low, with the Unsold Inventory Index for existing, single-family detached homes remaining at 4.2 months in April, unchanged from a revised 4.2 months in March. April's housing inventory was down from a revised 5.6 months in April 2011. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A 7-month supply is considered normal.

Interest rates remained extremely low in April, with 30-year fixed-mortgage interest rates averaging 3.91 percent, down from 4.84 percent in April 2011, according to Freddie Mac. Adjustable-mortgage interest rates averaged 2.78 percent in April 2012, compared with 3.20 percent in April 2011.

The median number of days it took to sell a single-family home fell to 49.3 days in April 2012, down from a revised 53.2 days for the same period a year ago.

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Building Permits in U.S. Jump 23% in April Over Last Year

2012-05-16T12:45:52Z

]]> According to the U.S. Census Bureau and the Department of Housing and Urban Development's (HUD) new residential construction statistics for April 2012, building permits in U.S. spiked 23.7% in April over last year's numbers.

Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 715,000. This is 7.0 percent (±1.0%) below the revised March rate of 769,000, but is 23.7 percent (±1.9%) above the revised April 2011 estimate of 578,000.

Single-family authorizations in April were at a rate of 475,000; this is 1.9 percent (±1.1%) above the revised March figure of 466,000. Authorizations of units in buildings with five units or more were at a rate of 217,000 in April.

Housing Starts

Privately-owned housing starts in April were at a seasonally adjusted annual rate of 717,000. This is 2.6 percent (±14.8%) above the revised March estimate of 699,000 and is 29.9 percent (±15.2%) above the revised April 2011 rate of 552,000.

Single-family housing starts in April were at a rate of 492,000; this is 2.3 percent (±11.9%) above the revised March figure of 481,000. The April rate for units in buildings with five units or more was 217,000.

Housing Completions

Privately-owned housing completions in April were at a seasonally adjusted annual rate of 651,000. This is 10.0 percent (±16.7%) above the revised March estimate of 592,000 and is 20.1 percent (±18.0%) above the revised April 2011 rate of 542,000.

Single-family housing completions in April were at a rate of 489,000; this is 11.4 percent (±13.6%) above the revised March figure of 439,000. The April rate for units in buildings with five units or more was 158,000.

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Starwood Hotels Expands Footprint in Middle East and Africa

2012-05-16T12:30:33Z

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LeMeridien Oran, Algeria

Starwood Hotels & Resorts Worldwide, Inc. is strengthening its position as the leading hotel operator in the Middle East and North Africa (MENA) region with an existing portfolio of nearly 70 hotels and a pipeline of 40 new hotels. This growth, primarily in the luxury and upper-upscale segments, represents an increase of nearly 60 percent over the next five years.

In the past 18 months, Starwood has debuted six new hotels throughout MENA and momentum continues in the region where the company has recently inked deals for 10 additional hotels.

"Despite economic and political uncertainty in parts of the region, Starwood continues to see demand for growth of all of our brands across the Middle East and North Africa," said Starwood Hotels & Resorts' president/CEO Frits van Paasschen. "MENA is key to Starwood's global expansion strategy, representing our second largest growth market after China. When you consider that the region has 35 metropolitan areas with a population of over one million, and many with a wealthy middle class, there's huge long-term potential for internationally-branded luxury and upper-upscale hotels."

One of the newer projects in Africa is the debut of Le Meridien in Algeria with the new Le Meridien Oran, designed by Rockwell Group Europe.

With the openings of six new hotels under five of the company's varying lifestyle brands, Starwood has marked a number of key milestones in MENA over the past 18 months. Among the highlights is the launch of Starwood's ultra-luxury St. Regis brand in the region with the opening of The St. Regis Saadiyat Island Resort in Abu Dhabi. This was followed by the recent opening of The St. Regis Doha, marking the brand's debut in Qatar.

Later this year, Starwood will open yet another luxurious St. Regis hotel on Abu Dhabi's vibrant Corniche, making it the only city in the world to boast two St. Regis hotels. Meanwhile, the first Westin hotel in Abu Dhabi opened as the Westin Abu Dhabi Golf Resort & Spa.

Starwood continues its rapid growth in 2012 with further expansion in key markets, including Saudi Arabia where the company will debut two hotels later this year: the Sheraton Medina and Four Points by Sheraton Medina. Both hotels combined will add nearly 500 rooms to the Holy City and increase Starwood's portfolio to 12 hotels in the country.

"Thanks to Starwood's long history in the region, which dates back to the opening of Sheraton Kuwait Hotel & Towers in 1966, the company is well positioned to take full advantage of growth," said Roeland Vos, President of Starwood Hotels & Resorts, Europe, Africa & Middle East. "MENA continues to evolve as an international business and leisure travel hub. With the number of tourists traveling to the region expected to double from nearly 80 million last year to 195 million by 2030, MENA is one of the most attractive growth markets in the world."

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Investments in Asia's Commercial, Industrial Real Estate Markets Tumble 42% in Q1, Hong Kong the Exception

2012-05-16T12:15:37Z

]]> Is it a blip or a bump?

Analysts aren't sure as they ponder the 42 percent drop in Asian commercial and industrial real estate in the first quarter. Hong Kong was the exception. Investments doubled in that market, according to Los Angeles-based CBRE.

The recent CBRE research covers investments closed on offices, retail complexes and industrial facilities. The total investment for the January-March period totaled $11.6 billion.

CBRE speculates the Chinese Lunar New Year holiday may have dampened activity in the January to March period. Strong sales activity in the second half of last year may have been a factor in slowing down activity so far this year, the report suggests.

Among notable trends, cross border investment flows declined during the first quarter. Domestic investors took up a bigger share of the total transactions, accounting for around 86% of total investment volume.

In another report, SouFun Holdings, Ltd. (NYSE: SFUN), a leading real estate internet portal based in Beijing, notes residential land sales in major Chinese cities plunged 92 percent in the period from April 30 to May 6 of this year from the previous week.

At the same time, however, there was also some encouraging news in the Chinese real estate market. For example, Chinese developer Evergrande Real Estate Group Ltd said contract sales in April totaled 8.19 billion yuan ($1.30 billion), up 103 percent from March. It exceeded the market expectation of up to 7.5 billion yuan.

Also encouraging was news from Henderson Land Development Co Ltd Chairman Lee Shau-kee. He bought an additional 324,000 shares of the company for a total of about HK$14.31 million ($1.84 million) on May 2, raising his stake to 62.20 percent from 62.18 percent, according to an exchange disclosure.

On the positive side also was speculation in Hong Kong and Beijing that London-based Barclays is seeking a mainland partner. The investment banking venture would focus on China's fast-growing capital market and real estate opportunities. Barclays is considering more than a dozen Chinese securities firms, including Chongqing-based Southwest Securities, according to the street talk.

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Port of Los Angeles Enjoys Record-Breaking April Container Volumes, Jump 14.5% Over Last Year

2012-05-16T12:00:30Z

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Port of Los Angeles at sunset (Photo by Port of Los Angeles)

According to the Port of Los Angeles, imports increased by 16.7 percent, from 312,359 Twenty-Foot Equivalent (TEU) containers in April 2011 to 364,555 TEUs this April. Exports increased 11.5 percent, from 167,448 TEUs in April 2011 to 186,838 TEUs in April 2012.

Combined, total loaded imports and exports for April increased 14.9 percent, from 479,808 TEUs last April to 551,393 TEUs in April 2012.

Phillip Sanfield (Port of Los Angeles)

Factoring in empties, which increased 13.3 percent year over year, overall April 2012 volumes (707,182 TEUs) increased 14.5 percent compared to April 2011 (617,272 TEUs). Those figures reflect the busiest April in Port history, surpassing April 2007 volumes of 679,575 TEUs.

For the first four months of 2012, overall container volumes have increased 6.1 percent (2,582,003 TEUs) compared to the same period in 2011 (2,433,499 TEUs).

Port of Los Angeles (Photo by Port of Los Angeles)

"April was a very, very strong month with double-digit increases on both the import and export side. It was our best month of 2012 and also the busiest April ever in terms of overall volumes. We were pleasantly surprised with the import numbers, and that could reflect increased consumer confidence," said Phillip Sanfield, Port spokesperson.

Sanfield further commented, "The increase in empty containers returning to Asia bodes well because it's an indication that shippers are repositioning containers for the return-to-school season. Those goods traditionally start coming toward the end of June and into July. After that, we're hopeful that our late summer volumes will move into a more traditional holiday peak season pattern."

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U.S. Home Builder Confidence Index Rises in May, Highest Levels Since Mid-2007

2012-05-15T17:45:20Z

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David Crowe

According to the National Association of Home Builders (NAHB), home builder confidence in the market for newly built, single-family homes gained five points in May from a downwardly revised reading in the previous month to reach a level of 29 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

This is the index's strongest reading since May of 2007.

"Builders in many markets are reporting that buyer traffic and sales have picked back up after a pause this April," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "It seems we have resumed the gradual upward trend in confidence that started at the beginning of this year, as stabilizing prices and excellent affordability encourage more people to pursue a new-home purchase."

"While home building still has quite a way to go toward a fully healthy market, the fact that the HMI has returned to trend is an excellent sign that firming home values, improving employment and low mortgage rates are drawing consumers back," said NAHB Chief Economist David Crowe. "The pace of this emerging recovery could be stronger were it not for the significant impediments that the market continues to face with regard to builder and consumer access to credit, inaccurate appraisals, and more recently, rising materials prices."

Derived from a monthly survey that NAHB has been conducting for 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Each of the index's components rebounded from declines in the previous month. The component gauging current sales conditions and the component gauging traffic of prospective buyers each rose five points in May to 30 and 23, respectively, with the traffic component hitting its highest level since April of 2007. The component gauging sales expectations in the next six months rose three points to 34.

Three out of four regions registered improving builder sentiment in May. This included a six-point gain to 32 in the Northeast, and five-point gains to 27 and 28 in the Midwest and South, respectively. The West posted a two-point decline, to 29.

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Actor Mel Gibson Puts His Uber-Luxe Cannes Film Festival Penthouse on the Market

2012-05-15T14:15:58Z

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Cannes Film Festival as seen from Mel Gibson's penthouse apartment terrace

(Cannes, France) -- With unobstructed outlook over the Cannes International Film Festival, Mel Gibson has listed his penthouse apartment on the Côte d'Azur.

It is located directly on the famous "Promenade de la Croisette" opposite the "Palais des Festivals", where the international film festival takes place every year (May 16 to 27 in 2012).

The penthouse has been rented out several times during the film festival by Mel Gibson. It has even been rumored that Mel Gibson is also the owner of the property ("Mel Gibson apartment").

It affords unobstructed views over the red carpet and the azure blue sea. For this reason, the penthouse has also been hired on numerous occasions by the BBC, amongst other broadcasters, to film coverage of the festival. Many other famous film stars have also resided here whilst visiting for the annual event.

Mel Gibson's Cannes Penthouse apartment terrace view

The exclusive duplex apartment is situated on the fifth floor and comprises an interior of approx. 250 sqm with a large living and dining area, and four bedrooms each with en suite bathrooms. The appointment includes a security alarm, an open fireplace, a Jacuzzi and a top-class fitted kitchen. In addition, the penthouse has a roof terrace spanning some 250 sqm, planted with palm and olive trees and featuring an outdoor kitchen and bar.

Interested buyers submitting a bid shall be privy to the asking price for this exceptional property upon request. Engel & Völkers in Cannes expects the exclusive penthouse to by far exceed the price bracket usually commanded in this location of up to 50,000 euros per square meter. Its prime location means that the apartment also offers high potential returns generated from lease of the property.

The Côte d'Azur is one of the most stable second home markets in Europe. The upper market segment in particular is characterized by a sustained level of demand. Buyers come above all from Western Europe, as well as Russia and the Middle East. Many clients have a growing interest in buying real estate purely for investment purposes. The most sought-after locations on the French Riviera include Saint-Jean-Cap-Ferrat, Cap Antibes and Cannes.

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U.S. Housing Affordability Index Reaches Record Highs in Q1

2012-05-15T14:00:56Z

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Moe Veissi

According to the National Association of Realtors (NAR), housing affordability conditions for all home buyers reached a milestone in the first quarter of 2012.

NAR's composite quarterly Housing Affordability Index rose to a record high of 205.9 in first quarter, based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power. This is the first time the quarterly index broke the 200 mark; recordkeeping began in 1970.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said market conditions are optimal for home buyers. "For those with good credit, we've never seen better housing affordability conditions or market opportunities than we see at present," he said. "Although home prices are stabilizing and sales are rising, some buyers still have to jump through a lot of hoops to convince a lender that they are creditworthy, even for a mortgage that would be well within their means. This is especially true for self-employed buyers."

Veissi noted home sales would be much higher if lending standards would return to normal.

The index shows the median income family, earning just under $61,000, could afford a home costing $325,500 in the first quarter, which is more than double the national median existing single-family home price of $158,100. The median monthly mortgage principal and interest payment for a median-priced home would take only 13.5 percent of gross income.

A companion index measuring the ability of first-time buyers to purchase a home also set a record, with the first-time buyer index reaching 135.8 in the first quarter.

Assumptions for the first-time buyer index include a lower income, at 65 percent of median family income, a starter home costing 85 percent of the median price, and a downpayment of 10 percent. This index means the typical entry-level buyer could afford a home costing $182,500, which is well above the overall median price.

"It's never been easy to buy a first home because of the cash required for downpayment and closing costs, but conditions for first-time buyers who are able to get a mortgage have never been better," Veissi explained.

Most first-time buyers choose a loan with a lower downpayment, often an FHA-insured loan with 3.5 percent down, and some use the VA program with no downpayment.

Both home prices and mortgage interest rates are expected to edge up modestly as the year progresses, but housing affordability will remain very favorable with the median-income household well positioned to afford a median-priced home. For all of 2012 the index is projected to set an annual record, averaging 191 for the year.

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Cheaper Money Boosting Investment in Ecuador's Growing Property Market

2012-05-15T12:30:35Z

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Quito, Ecuador

Ecuador, a comparatively small, 110,000-square-mile western South America republic with miles and miles of glittering empty sandy beaches, is enjoying an economic boom that is triggering new real estate development throughout the nation.

But don't expect to fly there and try to get a piece of the action right now.

Bordering the Pacific Ocean at the Equator, between Colombia and Peru, Ecuador is no Asian tiger. The political landscape is turbulent.

The Doing Business Report 2012 (World Bank) ranks Ecuador 130 out of 183. In another indicator called Starting a Business, Ecuador ranks 164.

Alejandro Espinosa-Wang of the World Bank cautions an entrepreneur in Ecuador's capital, Quito, for example, he would need to complete 12 procedures, wait 56 days and pay the equivalent of 28.8% of the gross national income (GNI) per capita to start a business."

In contrast, "the average number of procedures needed in the Latin American and the Caribbean region is nine. And in the Organization for Economic Co-operation and Development (OECD) high-income economies, only five. The average time to start a business in Ecuador is 54 days, and 12 days, respectively.

Still, Ecuador has some impressive numbers to entice investors, according to observations from the London-based Global Property Guide, the International Monetary Fund, Ecuador's National Bureau of Statistics, the Central Bank of Ecuador, the World Bank and author David Morrill,

Among those pluses are:

Cheaper money is boosting investment.
Natives are moving towards big urban centers like Quito and Guayaquil.
Since 1990, the urban population has increased at an average annual rate of 2.7%. By 2010, 67% of the population lived in towns.
There is a rush to the Pacific coast and the eco-tourism boom in the Andean and Amazonian regions.
A clear political will to provide better housing conditions for Ecuadorian households.
American expatriates are choosing to settle in places like Quito and Cuenca where investment interest rates are relatively low.
The U.S. dollar is legal tender in Ecuador.
The annual appreciation of property, nation-wide, has been running between 8% and 12% since 2007.
Growth was 5.78% in 2011 (provisional), after 3.58% in 2010. The economy is predicted to grow by 5.4% in 2012.
Public debt is expected to increase moderately from 20.7% of gross domestic product (GDP) in 2010, to 25% of GDP in 2015.
The current account deficit is forecast to stay stable at around 3.5% until 2015.
Unemployment is expected to stay stable at around 7.5% from 2012 to 2015.
The general index of building permits rose from a value of 166.6 in 2000 to 350.6 in 2006, the last year Ecuador's Bureau of Indexes collected the data.

Ecuador's general construction price index fell from 229.54 in August 2008 to 210.79 in May 2009, in the aftermath of the international financial crisis. But since then, construction prices have reached a historical peak of 234.569 in January 2012. Construction prices rose by 6.88% in 2011 (+2.18% in real terms), after 1.95% rise in 2010 (-0.53% in real terms)

Ecuador's severe financial crisis in the late 1990s led to economic hardship, and social and political tensions. Banks defaulted. Emigration rates skyrocketed. After losing 67% of its foreign exchange value during 1999, the Sucre was replaced by the U.S. dollar in March 2000.

Despite jitters in the wider global economy, Ecuador shows no sign of slowing, according to the International Monetary Fund.

The combination of lower interest rates, a stable exchange rate and a growing banking system have been crucial in boosting investment in real estate projects. The Ministry of Finance says inflation is expected to reach 5.1% this year

"Besides construction in Quito and Guayaquil, Cuenca and Manta are also experiencing building booms," according to author David Morrill. "In the residential market, Ecuadorians returning from overseas, to live or invest, mostly from the U.S. and Spain, are a major factor."

Adds Ecuadorian architect Dayuma Roman Jauch: "In the last 10 years, households have had easier access to mortgages to buy flats in urban centers. Also, big firms help to their workers to buy homes close the place of work."

On the political side, President Rafael Correa, an economist educated in the US, has been quoted as saying he likes to define Ecuador as an anti-Imperialist country and to define its politics as "revolutionary".

Yet despite Correa's personal friendship with Venezuela President Hugo Chavez, and some tensions with the US over economic policy, Correa's foreign policy is less confrontational than Venezuela´s, according to some analysts.

At home, Correa's political strategy appears to be a mixture of Latin social democratic tradition and an autocratic left-wing political attitude. He is taking steps to protect the environment and promote social housing, as well as shaking hands with Iran´s diplomats.

The government also is tackling poverty and inequality by increasing the share of oil revenues used for pro-poor spending programs.

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Residential Development Land Prices in UK Remain Flat in Q1

2012-05-15T12:00:58Z

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Grainne Gilmore (Knight Frank)

According to London-based Knight Frank, UK land prices remained stable in the first three months of the year, reflecting the wider movement in house prices, which have also remained broadly static. This comes after a 1.3% rise in development land values in 2011.

Land prices fell in the North West between January and March, while prices in the West Midlands and Greater London picked up. Prices in all other regions remained unchanged.

Results for Q1 2012 include:

The average value of residential land remained unchanged in UK in Q1, after a 1.3% rise in Q4 2011

Prime central London development land prices also remained static in the first quarter

Demand for residential land in the UK still outstrips limited supply.

As home builders reported in their trading updates over the past month, viewings and sales have been positive across the board during the start of the year, suggesting a market which continues to recover from the trough seen in 2009 in the aftermath of the financial crisis.

"House builders are still absorbing the potential impact of the Community Infrastructure Levy", said Gráinne Gilmore, Head of UK Residential Research of Knight Frank.

But supply remains very limited - a reflection of the slowdown in the number of landowners applying for planning in 2009 and 2010. As a result, there are fewer sites with planning consent available. In addition, given the introduction of new planning rules, it is now taking longer to achieve planning in many areas, further exacerbating the lack of supply.

House builders are still absorbing the potential impact of the Community Infrastructure Levy (CIL), which could weigh on land prices outside London. Furthermore it may deter land owners from putting their land up for sale at this stage in the market.

Prime Central London:

The first quarter saw a relatively flat market from a pricing perspective. This contrasted with demand as buyers continued to demonstrate a good appetite for sensibly priced opportunities.

Developers and investors alike remain keen to secure schemes. However their approach is one of realism as they are aware that unsupportable assumptions will not find favor with their funding sources.

Average property prices in prime central London rose by 2.7% in the first three months of the year.

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U.S. Government's New Tourism Goal: Annually Attract 100 Million International Visitors by 2021

2012-05-14T16:31:12Z

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Roger Dow

Roger Dow, president and CEO of the U.S. Travel Association is a happy man this week.

That is because the White House recently announced their new National Travel and Tourism Strategy, which includes the lofty goal of having over 100 million annual international visitors coming into the U.S. within the next decade.

Dow's office made the following comments this past Friday on the new National Travel and Tourism Strategy, which included:

"Today, the Obama Administration announced its National Travel and Tourism Strategy. This important step officially elevates the travel industry to what it should be: a national priority. It also recognizes the industry for its fundamental contribution to our economy, national security and public diplomacy.

"The National Strategy sets a goal of increasing U.S. jobs by attracting and welcoming 100 million international visitors annually by the end of 2021. This is no small effort, but the opportunity for economic growth and new jobs is too great. The travel industry stands ready to work with the Administration in achieving this goal.

"I commend Secretaries Bryson and Salazar for their leadership in preparing the National Strategy. This effort required extensive government-wide coordination and broad outreach to the private sector in a short amount of time.

"America has always been a nation of travelers, and there's nothing we love more than showing off our beautiful country to people from around the globe. As we move out of the recession, the wheels of the travel industry have not stopped turning. Since the job recovery began, our industry has created more than 250,000 new jobs - nearly 50,000 this year alone - which far outpaces gains in the rest of the economy or by other industries. In total, travel supports more than 14.4 million American jobs and contributes $1.9 trillion to our economy. As our nation works to close our trade deficit, travel exports have been booming. Travel exports totaled a record $152 billion in 2011, and the travel industry is now the number one contributor to our balance of trade.

"Today's announcement couldn't come at a better time. This week marks the 29th annual National Travel and Tourism Week - a week when local communities across the country are coming together in support of the travel industry and the millions of hardworking men and women it employs. As the National Strategy is implemented and the U.S. sees an increase in the amount of international visitors, those local communities will experience more jobs, economic growth and additional revenue."

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Nikki Beach Resort Brand Entering Asia-Pacific Market

2012-05-14T16:10:48Z

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Nikki Beach Hotel & Spa, Phuket

Castlewood Group Singapore continues its expansion of high-end resort properties in Asia-Pacific. The company is expanding its established lifestyle brand, Nikki Beach, with a hotel, spa and beach Club in Phuket in 2013. Phuket is an island off the southwest coast of Thailand.

Nikki Beach, already a successful brand through its Koh Samui Beach club which opened 2009, plans to operate and expand the brand with Castlewood Group in Singapore, Koh Samui (hotel property), Bali, Langkawi and Hai Nan, according to the company's news release.

"We are delighted to contribute to the expansion of this hugely exciting and successful brand in Asia and offer our investors the chance to become part of the Nikki Beach lifestyle," said Castlewood Group CEO Chris Comer.

"The Nikki Beach Club plus The Nikki Beach Hotel and Spa in Bang Tao, Phuket will be our first offering to the market and will comprise a five-star hotel with 151 luxurious suites and a mix of 23 sky villas and exclusive villas, all with private pools and gardens."

Nikki Beach Hotel & Spa, Phuket (poolside cabanas)

Nikki Beach launched the beach club concept in 1998, bringing together dining, fashion, art, music and entertainment and was quoted by the London Observer as the 'Sexiest Place on Earth'.

Over a decade later, the Nikki Beach concept has transcended its international venues and grown into a global luxury lifestyle brand. Nikki Beach Lifestyle comprises a clothing line, global events such as the famed Cannes and Toronto Film Festivals and the upcoming London Olympic Games, plus a Nikki Beach music label, VIP membership and concierge program as well as a hotel and resort division.

The Nikki Beach brand is present in 12 cities, in nine different countries: Miami Beach, FL; St. Tropez, France; St. Barth, French West Indies; Marbella, Spain; Cabo San Lucas, Mexico; Marrakech, Morocco; Koh Samui, Thailand; Mallorca, Spain and at the Cannes Film Festival, France; the Toronto International Film Festival, Canada; and this year at the 2012 Olympics in London.

Nikki Beach founder Jack Penrod has been credited by numerous civic organizations with transforming once-seedy Miami Beach into an international celebrity destination.

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Private Equity Likes Real Estate Investing in Pune, India's Other Growth City

2012-05-14T15:32:09Z

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Sameer Gholve

According to Sameer Gholve, Manager of Capital Markets at Jones Lang LaSalle India, Pune has been favored destination amongst Real Estate PE funds since 2005 - the year FDI opened for real estate.

Most of the funds are based out of Mumbai, which gives Pune obvious preference, as the city's proximity allows these funds to track and monitor the market - and their investments - easily. Also, Pune is among the most rapidly growing cities in India after Mumbai, NCR and Bangalore.

Pune Construction

The total flow of PE funds into Pune until December 2011 was approximately US$800 million. This consisted of both foreign and domestic monies through around 32 major transactions over the last five years. 2009 saw the lowest flow of private equity funds into the city, though Investors regained confidence in 2010 arrived. The renewed investor confidence resulted in a massive recovery of private equity deal closures in Pune

Woodsville Pune

As expected, most of these funds have been invested in the residential property asset class. In fact, residential real estate has proved to be the most consistent and enduring magnet for private equity funds into Pune's real estate sector. In comparison, investments into SEZs, industrial parks (STPIT) and mixed-use townships have primarily been seen only before mid-2008. From 2010 onwards, the interest in these formats as asset classes has been quite meager.

Significantly, 61% of the total private equity investments that have been seen in Pune were done in projects located in East Pune. East Pune has the majority of the city's IT industry developments such as Magarpatta Cyber City in Hadapsar, EON IT Park in Kharadi, CommerZone in Yerawada, Weikefield IT Park on Nagar Road, etc. These IT developments have had a major spin-off effect on the profile of these areas. The higher spending power and commensurate aspirations of the people working in these establishments has caused the arrival of massive malls and also generated a huge demand for quality residential projects. These projects are proving to be the major magnets for private equity investments into Pune's real estate sector.

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Over 95% of U.S. Refinancing Borrowers Choose Fixed-Rate Mortgages, 31% Shorten Loan Term

2012-05-14T15:01:03Z

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Frank Nothaft

According to Freddie Mac's Quarterly Product Transition Report released this week, in the first quarter of 2012, fixed-rate loans accounted for more than 95 percent of refinance loans. Refinancing borrowers clearly preferred fixed-rate loans, regardless of whether their original loan was an adjustable-rate mortgage (ARM) or a fixed-rate.

Freddie Mac's chief economist Frank Nothaft tells World Property Channel, "Fixed mortgage rates averaged 3.92 percent for 30-year loans and 3.19 percent for 15-year product during the first quarter in Freddie Mac's Primary Mortgage Market Survey, well below long-term averages. The Bureau of Economic Analysis has estimated the average coupon on single-family loans was about 5.1 percent during the first quarter of 2012. It's no wonder we continue to see strong refinance activity into fixed-rate loans."

Key Trends:

Of borrowers who refinanced during the first quarter of 2012, 31 percent reduced their loan term by paying off a 30-year loan and replacing it with a 20-year, 15-year, or other shorter-term loan. In addition, 66 percent of borrowers kept the same term as the loan that they had paid off.

Sixty-eight percent of borrowers who had a hybrid ARM chose a fixed-rate loan during the first quarter, the highest share since the first quarter of last year, while the remaining 32 percent chose to refinance into the same type of product.

Nothaft further comments, "Compared to a 30-year fixed-rate mortgage, the interest rate on a 15-year fixed was about three-quarters of a percentage point lower during the first quarter. For borrowers motivated to refinance by low fixed-rates, they could obtain even lower rates by shortening their term. Further, under the enhanced Home Affordable Refinance Program--HARP--announced by FHFA on October 24, 2011, certain risk-based fees are waived for HARP borrowers who refinance into shorter-term loans."

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Greater Ft. Lauderdale Area Home Prices Rise 7% in Q1

2012-05-14T13:46:26Z

]]> According to the Broward Council of the Miami Association of Realtors, Broward County sales of homes - including existing single-family homes and condominiums - increased seven percent, from 7,403 to 6,886, in the first quarter of 2012 compared to a year earlier.

Broward sales of existing single-family homes increased 4.4 percent in the first quarter compared to a year earlier. The sales of existing condominiums dropped a 14 percent compared to the first quarter of 2011.

"Broward County continues to see strong sales activity, which has resulted in consistent price appreciation over the last few months, including the first quarter of this year," said Rick Burch, 2012 president of the Broward County Board of Governors of the Miami Association of Realtors. "Broward County continues to attract both domestic and international buyers and investors, which will yield market strengthening long into the future."

Median and Average Sales Prices

The median sales price for single-family homes in Broward in the first quarter of 2012 was $180,000, a 16 percent increase compared to the first quarter of 2011. The median sales price for condominiums was $75,000, a nine percent increase compared to a year earlier.

The average sales price of single-family homes was $253,620, a two percent increase compared to the first quarter of 2011. The average sales price of condominiums in the first quarter was $121,435, a 13 percent increase compared to a year earlier.

Inventory Levels

Total housing inventory in Broward County decreased 29 percent year-over-year and 13 percent compared to the previous quarter.

"The performance of the Broward real estate market is very encouraging and unlike what we're seeing in most markets throughout the U.S.," said Ernesto Vega, president-elect of the Broward County Board of Governors of the Miami Association of Realtors. "Still, unnecessarily tight credit conditions are preventing some qualified buyers from purchasing homes in the area, a reality that is impeding even greater growth."

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JW Marriott to Make Caribbean Debut

2012-05-14T12:00:52Z

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JW Santo Domingo , Dominican Republic

(Santo Domingo, Dominican Republic) -- Marriott International's world-class luxury hotel brand, JW Marriott Hotels & Resorts recently announced plans to open a new 131-room JW Marriott Hotel in Santo Domingo, the capital of the Dominican Republic, in 2014. The mixed-used residential and commercial property will be operated by Marriott under an agreement with Grupo Velutini, a Panamanian subsidiary of Fondo de Valores Inmobiliarios (FVI).

The official announcement event took place at the hotel site inside of the Blue Mall with participants including President Leonel Fernandez, Marriott International chairman J.W. Marriott, Jr., Grupo Velutini owner/president Luis Emilio Velutini, and Rob Steigerwald, chief operating officer, Americas, Marriott International.

"The Dominican Republic is a highly desirable destination for today's luxury traveler and a growing business hub in the Caribbean," said J.W. Marriott, Jr., chairman of the board, Marriott International.

"This makes it ideally suited for our JW Marriott brand, which is now in 22 countries around the world."

Located in the Piantini area, Santo Domingo's primary business, commercial and residential district, the JW Marriott Santo Domingo will be located in the first seven floors of a 15-story mixed-use tower being built above the existing Blue Mall Santo Domingo, which opened in 2010 and features 20,000 square meters of commercial space over six floors, including high-end retail such as Louis Vuitton, Cartier, Salvatore Ferragamo and Carolina Herrera.

"We are thrilled to be bringing the JW Marriott brand of luxury to Santo Domingo," said Luis Emilio Velutini, owner and president of Grupo Velutini. "And with its prime location above the Blue Mall and in close proximity to major businesses, we know that it will be successful."

In addition to 131 guest rooms and suites, the hotel will feature a three-meal-a-day restaurant, a lobby bar and lounge and a pool snack bar. It will have 589 square meters of meeting space, including a ballroom and two smaller rooms; as well as a fitness center and swimming pool.

The primary architect for the project is Gomez Vasques Aldana Asociados, a well-known Mexican firm with extensive experience in the hospitality industry throughout Latin America and in Santo Domingo.

"We are fortunate to begin this partnership with Mr. Velutini and FVI, which has one of the largest real estate portfolios in Latin America," says Laurent de Kousemaeker, chief development officer for Marriott International, Inc. in the Caribbean & Latin America "We currently have two other hotels in Santo Domingo and believe that the JW Marriott luxury brand will be very well received in the city."

Currently, there are 53 JW Marriott hotels in 22 countries. By 2015 the portfolio will encompass 80 properties in 29 countries.

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Miami, London, Nairobi and Jakarta Buck Global Price Trend as Value of Prime Residential Property in World's Key Cities Dip in Q1

2012-05-11T17:55:40Z

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South Beach, Miami

According to London-based real estate consulting firm Knight Frank, the value of prime property in the world's key cities fell by 0.4% in the first quarter of 2012. This represents the index's first quarterly fall since the depths of the global recession.

Global Markets Residential Price Index Results for Q1 2012:

The index recorded its first quarterly fall since 2009 with prices falling on average by 0.4% in Q1 2012.

Overall, the index rose 1.4% in the 12 months to March 2012.

Prime markets in North America performed strongly, prices increased by 7.7% on average in the last 12 months.

Nairobi (up 24%) was the strongest performer in the last 12 months.

Prices in Dubai (up 4%) rose the most in the last 3 months.

Although a milestone, the index's negative quarterly growth is not surprising. Quarterly price growth has been below 2% since Q1 2010 and it averaged only 0.6% in 2011.

The first three months of 2012 brought with it little new momentum. The Eurozone debt crisis remained at the forefront of the global economic agenda, several critical elections were on the horizon (Russia, France, Greece) and Asia's highly-effective cooling measures showed no sign of being relaxed. Against this backdrop some luxury buyers took to the side-lines to observe their market's trajectory.

Despite the overall index's sluggish performance four prime markets achieved double-digit growth over a 12-month period; Nairobi, Jakarta, Miami and London. Perhaps most surprisingly is the fact that the top five performing cities were spread across four continents - North America to be the only continent to appear twice.

London and Singapore are proof that there is still a level of resilience in the prime markets with both cities shrugging off the introduction of new stamp duties in the first quarter of 2012. In London both prices and applicant numbers increased despite the stamp duty rise to 7% for individuals buying homes over £2m.

In Singapore the new 10% stamp duty for foreign buyers, which was introduced in December 2011, dented demand but not prices according to Nicholas Holt, Knight Frank's Asia-Pacific Research Director. Nicholas comments, "Prices not only held up but actually increased slightly at the very top end of the Singapore market in Q1 2012. This was not only due to fairly resilient domestic demand, but also due to wealthy Chinese, Indonesian and Indian buyers who continued to buy in this segment of the market undeterred by the surtax."

Knight Frank's view is that the overall index will remain subdued in 2012 fluctuating between marginal price falls and rises (with London, Moscow, Jakarta, Nairobi and Singapore expected to be the strongest performers) but it seems unlikely we are on the cusp of a new deflationary cycle in luxury global house prices.

Kate Everett-Allen

The safe-haven argument still resonates. Capital flight will continue to focus on cities with low political risk, transparent legal systems, good security and ideally those with an HNWI-friendly tax regime.

"Despite the overall index's sluggish performance four prime markets achieved double digit growth over a 12-month period", said Kate Everett-Allen, head of international residential research of Knight Frank.

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Miami Enjoys Tourism Boost From Global Volvo Ocean Race, Only North American Stop

2012-05-11T16:10:20Z

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VOLVO OCEAN RACE, Team CAMPER entering Port Miami (Photo by Marco Oquendo)

(Miami, FL) - This week Miami welcomed the Volvo Ocean Race fleet, a global sailing event, with much fanfare. And as it turns out, Miami has a lot to be thankful for being the only North America stop-over on their global trek. Money.

Considered one of the most prestigious sail events in the world with a global following, the 14-day Volvo Ocean Race festival scheduled in downtown Miami's Bicentennial Park will be taking place from May 6th-20th, and will attract more than 200,000 visitors worldwide including tourists, locals and sailing enthusiasts alike.

Don Poole

Volvo Ocean Race Miami's board member and President Don Poole previously told World Property Channel, "Several months ago in our application to the Florida Sports Commission we indicated that we believed that our event would generate around 7,000 room nights locally. We now know that Volvo North America has booked 900 people for 4 nights, 3,600 rooms. The six Volvo Race teams have booked on average 40 rooms for 14 days and the Volvo Race Corporate organization has booked 35 rooms for at least 14 days. When you do the math you can see that we will easily reach the 7,000 room night target and that's just the booked rooms we know about now."

William D. Talbert III, GMCVB President

"Miami is well-known as a big event town, and we are honored to be one of only 10 cities in the world, and the only North American city, selected as a stop on the Volvo Ocean Race," says William D. Talbert, III, CDME, president and CEO of the Greater Miami Convention & Visitors Bureau. "The worldwide media exposure for Miami during the eight months of the race is priceless," states Talbert. "Our Miami brand and particularly Downtown Miami has been front and center since last October. We can't begin to put a figure on the value of that kind of positive media and consumer exposure."

"The Miami stop is a great opportunity for the crews and the sailing aficionados of the world who will join them to relax and enjoy the many attractions that make Miami a world-class destination," adds Talbert. "The Volvo Ocean Race Village will be a hub of excitement and activities for our visitors and residents alike for 14 days and that's fantastic business for our community."

Miami Commissioner Marc D. Sarnoff

City of Miami Commissioner Marc D. Sarnoff tells World Property Channel, "The Volvo Ocean Race is yet another indicator of the City of Miami's continued emergence not just as a gateway to the Americas but now as a gateway to the world. The sheer magnitude of this global event -- with millions of people watching worldwide -- will have a direct positive impact on Miami's image as will the tens of thousands of people who are expected to visit the city. I'm very proud that the VOR (Volvo Ocean Race) chose Miami as its only North American stopover and we hope to welcome them back in the future."

As for the race itself, American skipper Ken Read led his PUMA team to a second consecutive leg win on Wednesday, arriving on home soil in Miami triumphant following an epic 17-day match race with closest rivals CAMPER to confirm they are back in contention for overall victory.

Since the heartbreak of the first leg, in which their yacht Mar Mostro dismasted, PUMA have been on the up - and after scoring their first offshore success in Leg 5 from Auckland to Itajaí, Brazil, they made it two in two with glory in Leg 6.

After coming off best in an intense battle for first place with CAMPER with Emirates Team New Zealand, who at one point closed the gap to less than a mile, Read said his team were back in the fight for the Volvo Ocean Race 2011-12 trophy.

"That was about as stressful as it can get, believe me," Read said. "It was touch and go, and the guys on CAMPER sailed very well, but I couldn't be more proud of our team -- they did an unbelievably great job."

PUMA Ocean Racing powered by BERG crossed the finish line at 18:14:00 UTC, 17 days after leaving from Itajaí, Brazil, with CAMPER with Emirates Team New Zealand around an hour behind PUMA and on course to take second.

PUMA dominated the 4,800 nautical mile leg from the start, only surrendering the lead on two occasion to CAMPER and for no more than 48 hours.

A fast start to the leg in fresh conditions saw PUMA lead out of Itajaí and into several days of fast sailing up the Brazilian coast.

VOLVO OCEAN RACE Team PUMA entering downtown Miami (Photo by Marco Oquendo)

As winds eased the fleet split into three groups, with CAMPER and Abu Dhabi Ocean Racing closest to the shore enjoying two days at the head of the pack, while Team Telefónica and Groupama sailing team opted to head east in search of better breeze. PUMA split the difference and it paid as they got a jump on their rivals that would lay the foundations for their eventual win.

With the south-east trade winds providing near-perfect conditions for the Volvo Open 70s, a drag race began up to the Equator and through the Doldrums, which presented little problem for the fleet. But 10 days into racing, PUMA were nearly undone by storm clouds which stalled the leaders, allowing CAMPER and Telefónica to reel them in to just six miles.

Into the Caribbean Sea they enjoyed fast sailing once more until they hit tricky weather systems that once again saw the leading boats compress. Despite coming under fire from CAMPER right up until the very last minute, faultless sailing saw PUMA defend their lead to claim the win.

It's the fourth time in six legs that PUMA have finished on the podium, and they pick up an invaluable 30 points for the leg win to take their overall tally to 147.

CAMPER will be awarded 25 points for second place, their best result in the offshore series since Leg 2 from Cape Town to Abu Dhabi when they finished second behind Team Telefónica.

"It's been a long leg and PUMA have sailed very nicely, they have defended very well, but I think we have attacked well too," CAMPER skipper Chris Nicholson said as his team closed in on the finish line. "I'm pretty happy with how it's gone. We're in better shape now for the next leg."

Both teams will close the gap on overall leaders Telefónica, who were still scrapping it out for the final podium position with Groupama sailing team.

The globally recognized Volvo Ocean Race is an extreme sailing event around the world and is widely known as the 'Everest of Sailing.' The worldwide sporting event kicked off from Alicante, Spain on November 5th, and will conclude in Galway, Ireland, in July 2012. The teams are competing across 39,270 nautical miles through some of the world's most treacherous seas.

VOLVO OCEAN RACE Team PUMA entering Port Miami (Photo by Marco Oquendo)

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Blackstone Picks Up London's Prime Devonshire Square for $549 Million

2012-05-11T16:03:29Z

]]> In a major international commercial real estate deal that is generally synonymous with Blackstone Group (NYSE: BXN), the New York City-based investor-developer purchased the 12-building Devonshire Square office and retail hub from Boston-based Rockpoint Group and the Abu Dhabi Investment Authority (ADIA) for about 340 million pounds ($549 million).

Neither buyer nor seller would confirm the transaction that reportedly closed in Hong Kong. Blackstone and Rockpoint are private equity companies and do not report their transactions to the U.S. Security and Exchange Commission.

According to the Financial Times, the price paid by Blackstone was about 17 percent below the 410 million pounds paid by Rockpoint and ADIA for the five-acre Devonshire Square site in 2006 when the London office market was sizzling. At that time, Rockpoint and ADIA redeveloped the Devonshire Square site.

The project is near Broadgate, the office complex in the City of London in the heart of the financial district. Blackstone reportedly owns a 50 percent interest in Broadgate. Its joint venture partner is British Land (LSE: BLND)

For Blackstone, the Devonshire acquisition gives it almost a lock on prime properties in London's famed financial district.

Internationally, Blackstone last week reportedly signed a S$215 million ($173 million) deal to make its first acquisition in Singapore, buying the StarHub Green project from Germany's SEB Asset Management.

Blackstone has raised more than $10 billion for Blackstone Real Estate Partners VII, a global property fund. The Devonshire purchase reportedly is a co-investment between that fund and the company's third European fund.

In a major international commercial real estate deal that is generally synonymous with Blackstone Group (NYSE: BXN), the New York City-based investor-developer purchased the 12-building Devonshire Square office and retail hub from Boston-based Rockpoint Group and the Abu Dhabi Investment Authority (ADIA) for about 340 million pounds ($549 million).

Neither buyer nor seller would confirm the transaction that reportedly closed in Hong Kong. Blackstone and Rockpoint are private equity companies and do not report their transactions to the U.S. Security and Exchange Commission.

According to the Financial Times, the price paid by Blackstone was about 17 percent below the 410 million pounds paid by Rockpoint and ADIA for the five-acre Devonshire Square site in 2006 when the London office market was sizzling. At that time, Rockpoint and ADIA redeveloped the Devonshire Square site.

The project is near Broadgate, the office complex in the City of London in the heart of the financial district. Blackstone reportedly owns a 50 percent interest in Broadgate. Its joint venture partner is British Land (LSE: BLND)

For Blackstone, the Devonshire acquisition gives it almost a lock on prime properties in London's famed financial district.

Internationally, Blackstone last week reportedly signed a S$215 million ($173 million) deal to make its first acquisition in Singapore, buying the StarHub Green project from Germany's SEB Asset Management.

Blackstone has raised more than $10 billion for Blackstone Real Estate Partners VII, a global property fund. The Devonshire purchase reportedly is a co-investment between that fund and the company's third European fund.

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Panama Maritime Authority Approves New $600 Million Container Shipping Terminal

2012-05-11T15:32:37Z

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New Panama Colón Container Port (Panama Canal)

This week the Panama Maritime Authority (AMP) granted permits to a private development group for the construction and operation of a new container terminal to be built at the Atlantic entrance of the Panama Canal.

With an estimated construction value exceeding $USD 600 million, the Panama Colón Container Port (PCCP) is expected to become one of the largest private maritime infrastructure projects in Panama, and the first terminal to be built on freehold land.

The Panama Canal is undergoing a $USD 5.2 billion expansion to allow greater traffic flow and to accommodate the next generation of "Super Post-Panamax" vessels, named because they exceed the size limitations of the existing canal system. However, numerous ports along the U.S. Eastern and Gulf coasts, South America and the Caribbean do not have the capacity to receive the larger ships. PCCP is designed to address this, so that Super Post-Panamax and other vessels can transit via the new locks, and transfer their cargo at the new PCCP terminal to and from smaller container ships capable of serving the existing ports of call.

John Carver

"Transshipment terminals will have a significant impact on the new Panama Canal era," said John Carver, Head of Jones Lang LaSalle's Ports Airports and Global Infrastructure (PAGI) group. "Too many seaports do not currently, and may never, have the harbor depth required to take advantage of the trend towards Post and Super-Post Panamax vessels. PCCP is the first terminal to be engineered specifically for the expanded Panama Canal and will provide a critical new link in the global supply chain, further enhancing Panama's already strategic designation as one of the world's primary global transshipment hubs."

Set to break ground in summer 2012, the 4-berth terminal will be capable of handling container vessels up to 18,000 TEUs (twenty-foot equivalent units) and is designed to handle 2 million TEUs in initial throughput with future expansion capability thereafter and offers unique complementary warehousing and logistics facilities. PCCP will complete in conjunction with the opening of the Panama Canal's "Third Set of Locks" expansion project in late 2014.

Jones Lang LaSalle's Project Development Services group will soon begin to administer the bid tender process for the initial dredging and related marine construction elements.

"We expect transshipment terminals such as PCCP to play an integral role in the long-term success of the Panama Canal," said Ricardo Quijano, Panama`s Minister of Commerce and Industry. "For such a large infrastructure project to be achievable by the private sector is a testament to Panama's concerted efforts over many years to create a stable and transparent operating environment."

"As a global maritime hub, Panama will continue to make every effort to ensure that industry participants who locate here can enhance their strategic advantages and continue to prosper despite highly competitive global markets. We applaud the efforts of Jones Lang LaSalle and the private sector in working to bring this project to fruition," he added.

As development advisor to the project consortium, Jones Lang LaSalle has gained significant interest from terminal operators and expects PCCP to announce its selected operator later this year.

Carver added, "Clearly, transshipment traffic in Panama, and particularly on the Atlantic side of the Canal, is facing long term capacity constraints. Despite global economic uncertainties, container volumes in Panama have continued to grow at impressive rates and, after 2014, we expect this growth to accelerate further."

"Our discussions with market participants clearly point to the need for a new terminal such as PCCP which is uniquely capable of providing significant blocks of new capacity to the Atlantic transshipment market, together with a variety of integrated logistics, warehousing, and value-added processing facilities," he concluded.

Jones Lang LaSalle is acting as development advisor to the project consortium.

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