Real Estate is coming back!
With the staff attrition rates we have seen in real estate teams and related products in the last year you would be totally in your right to think real estate is over. However since January, we have seen there have seen ‘green shoots’ of real estate returning. They’re doing so not in the traditional format of the Big Banks and the traditional Advisory and PE businesses, but in new and exciting start-ups and other businesses.
They have looked at the market, seen the gap, and are now expanding into it. This is not only in debt restructuring but general real estate advisory. Will these start ups and new businesses really be able to take advantage of where the market goes and will it go the way they are expecting?
The debate seems to focus on when debt will come back to the market, where it will come from and who will be in a position to arrange that debt (client side). Right now, banks are unwilling to make loans and lack the associates and analysts to structure finance for their clients (I heard a rumour that one particular bulge bracket missed a deadline by two week due to lack of resources).
At the same time, the clients and PE houses do not have the resources (or the desire) to pull all the information together (the due diligence, the memos and the term sheets). Both these areas are ripe for start-ups to exploit. Equally, the source of funding has changed from the European Banks to the US Banks (admittedly only a few), the sovereign wealth funds, newly raised funds and private investors (due to the low value of sterling and subsequent decrease in the price of Central London Property for overseas investors). This is all creating demand for a new breed of real estate professional.
The new market needs people who can not only understand the financing and the numbers behind the funding, but can also operate from a cost saving perspective. In my opinion, therefore, real estate is coming back: New businesses out there that are going for it. And I suspect that established banks which have cut to the bone will be hiring like crazy into their real estate teams in Q1 2010.
Qatar set to become world’s largest Real Estate investor
QATAR will overtake sluggish European funds to become the largest real estate investor in the world this year, according to a report by property consultancy Jones Lang LaSalle out yesterday.The country has emerged as a global powerhouse in property, and will become the top source of overseas capital in 2010, says the report.“Cash-rich and with a strong appetite for splashy overseas assets, Qatari vehicles have lately outshined their counterparts from the region and are projected to carry on with their rapid expansion across the real estate world” the report said.Qatar Holding, the investment arm of the Qatari state, bought Harrods last month for £1.5bn and owns a large stake in Canary Wharf property firm Songbird. The report predicts high profile purchases across Latin America, Eastern Europe and Asia.
The International Monetary Fund expects the Qatari economy to expand by 18.5 per cent this year, on the back of increased gas and oil exports. It has enjoyed average economic growth of 17.4 per cent over the last five years.Qatar’s prominence in the property market is aided by a slowdown in real estate activity from German funds, which were among the largest global investors in 2009.“Qatar is the epitome of energy-rich Gulf nations, with a large appetite for real estate,” the report said.
"Confusion Reigns over Government's Help To Buy Scheme"
Analysts have expressed concern and confusion about the new Help to Buy scheme
The government's share isn't obligatory ? the buyer can buy it out whenever they like. However, the homeowner doesn't need to pay the government anything unless they do want to buy out
In Northern Ireland a different system operates that is known as the co-ownership scheme. It has been in existence since 1978. Under the scheme, potential property owners take as big a share in
The Northern Irish and Scottish governments don't charge interest on these equity shares. In England a 1.75pc charge is applied after five years, growing with inflation annually afterwards.
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Relaxed Planning Laws... Redundant Offices Transformed into Homes
Relaxed Planning Laws... New Policy
The Relaxed Planning Laws also Apply to Agricultural Buildings
It was also understood in the original proposal for the relaxed planning laws, that this change of use could potentially damage economic activity. As a result of these concerns, local authorities had the right to seek an exemption if they could claim a significant loss of economic activity, or show adverse consequences at the local authority level. The need to preserve office space to entice businesses and investments were reasons to request an exemption.
Local Authorities Exempt from the Relaxed Planning Laws
Following a thorough assessment, Mr Pickles announced in a written statement on the 9th of May that only 17 local authorities would be exempt from the relaxed planning laws, with six outside of London. These were: Manchester City Council; Ashford (Kent), Vale of the White Horse and Stevenage borough councils; Sevenoaks and East Hampshire district councils. The London authorities are the Boroughs of Westminster, Wandsworth, Tower Hamlets, Southwark, Newham, Lambeth, Kensington and Chelsea, Islington, Hackney and Camden, together with the City of London.
Could the New Legislation Affect Availability of Office Space
There is concern amongst critics that the new rules could adversely affect the availability of office space, particularly in residential areas of high value where office space would be profitably converted to housing. Comments have also been made that allowing offices to become homes could drive shoppers away from the high street and into retail complexes away from the town centres.
Moreover, in some cases planning permission would have to be obtained for the more extensive additional works needed to complete conversion from B1(a) to C3 status. In cases where planning permission is not required, there is the issue that local planning authorities will not be able to secure the additional finance required to invest in the appropriate social infrastructure needed to support the new residences.
