German Real Estate Attracts Investors - Buyers Search For Higher Yields In Stable Economy

Anita Likus

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ommercial-property sales in Germany are expected to climb to a post-financial-crisis high this year as the country lures investors seeking higher yields than are available in Europe's most desirable cities, like Paris and London.

The value of deals this year is expected to hit €30 billion ($40.6 billion), an 18.6% increase from 2012, according to property advisory Savills PLC. Transaction levels are still below the €52.2 billion recorded in 2007 but above the €10.8 billion in 2009, the weakest post-crisis year.

The increase this year comes as Germany also is seeing mergers and acquisitions among listed companies and consolidations of investment-management funds. Meanwhile, there is greater availability of debt and equity financing, according to Marcus Lemli, head of Germany at Savills.

Commercial-property buyers include pension funds, insurers and hedge funds that are attracted to Germany's stable economy. Germany's economy is expected to expand by 0.5% this year and 1.4% next year, according to the International Monetary Fund, while the country's 5.2% unemployment rate is the lowest since 1991.

Investors also are looking for higher yields than they can find in the most popular European markets. For example, average office-building yields in Germany are at 6.9%, compared with 5.8% in the U.K. and 6.4% in France.

"Hedge funds we haven't seen before have showed up," said Keith Breslauer, managing director at private-equity firm Patron Capital Partners, which plans to spend €1 billion on German real estate in the next couple of years. "Two years ago there were five bidders on an income-producing asset; there are now 25 bidders."

During most of the downturn investors preferred fully leased buildings with solid cash flows. But investors are now also looking at empty buildings or those needing refurbishing.

Patron Capital is close to purchasing two buildings, both 40% empty. Mr. Breslauer said he can find good opportunities outside of the main city centers and financial districts.

Foreign buyers have come to Germany from the U.S., the U.K. and Asia. The market is still dominated by domestic buyers, but international investors from 21 different countries have purchased commercial properties with a value above €1 million in Germany in 2013, property adviser CBRE said, adding that 39% of total investment in Frankfurt came from non-Europeans.

Earlier this year, a group of six Korean investors, most of which never before invested in Germany, purchased the Gallileo Tower in Frankfurt for €250 million. A joint venture of Axa Real Estate Investment Managers and Norges Bank Investment Management earlier this month said it is buying the headquarters of German newspaper Süddeutscher Verlag for €164.1 million.

Germany can be tricky for foreign investors because the country doesn't have one central hub. There are six large cities to choose from: Munich, Berlin, Frankfurt, Düsseldorf, Hamburg and Cologne.

German-listed real-estate companies also are getting more attention as companies grow through mergers and acquisitions and others go public.

The largest residential player, Deutsche Annington Immobilien SE, listed in Germany in July. Rival residential company LEG Immobilien AG listed in February.

"If you want to be on the radar of big investors, you have to be big," said Jan Linsin, head of research at CBRE.

Listed real-estate giant Deutsche Wohnen AG, with a €5.3 billion portfolio of residential, commercial and nursing-care assets, has made an all-share bid for Berlin-focused residential-property company GSW Immobilien AG, with €3.3 billion of assets. More than 91% of GSW's shareholders accepted the offer.

The takeover will create one of Germany's largest property groups, with 150,000 residential units and an €8.5 billion portfolio, and finally put a German real-estate company on a par with much larger European peers such as Paris-based Unibail-Rodamco SE or the U.K.'s Land Securities Group PLC.

"We started the consolidation in Germany's listed property market because we want to grow and become more attractive to foreign investors," said a spokeswoman for Deutsche Wohnen.

On the real-estate fund side, Internos Global Investors, which currently manages €2 billion of assets, announced earlier in November that it purchased the €1.6 billion real-estate Spezialfonds business CRS, comprising nine funds, from Commerz Real. Internos didn't disclose the price.

Source: Wall Street Journal

Why We Won’t Subscribe To NHF Now – Borno NLC Chairman

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he Borno State chapter of the Nigeria Labour Congress (NLC) said on Tuesday that its members  won’t subscribe to the National Housing Fund (NHF)  for now.

Maintaining that it would maintain its stand until  the scheme is run in a transparent manner, the state NLC said   past experience has shown that the housing scheme  is simply   a drain pipe.

The Borno NLC chairman, Comrade Ali Abana, who stated this while speaking at an NHF sensitisation workshop for stakeholders in Maiduguri, the state capital, hinged the decision of the labour union on the inability of the Fund to show details of the previous deductions from workers.

“We will not allow workers contribution into the NHF for now. This is because the fund has not been able to show transparency in the deductions of workers contribution into the scheme in the past.

“At the inception of the scheme in 1994, the organised labour in the state began contributions into the fund and by 2004, we have contributed N100 million. But on inquiry, we realised that there were no records regarding individual workers’ contributions, even where some records existed, there were no details enough.

“For instance, instead of showing employees 2.5 percent monthly contributions over a period, what we have was only organisations’ names and the deductions made. In some record for organisation like the Borno Radio and Television Services(BRTV), what was stated in the NHF sheet was “contributions for Umar Mohammed and others instead of individual workers name and their contributions, I think this is fraud,’”Abana alleged.

He noted that NLC has a duty to ensure the protection of deductions made from workers’ salaries.

“We want the NHF to show us clearly where they have kept our N100 million deductions and how the employees can access the money. We also want to know how the next of kin of those who have died can get their money back ,” he added.

The labour leader maintained that though the state government had persuaded NLC  to allow resumption of workers contributions into the fund in August , the failure  of  NHF to show transparency resulted in the non-workability of  the arrangement.

“In August 2013 the state governor, Alhaji Kashim Shettima, intervened to allow resumption of workers contribution due to his laudable housing programme. But the inability of the NHF to adopt transparency in the deductions of the contributions frustrated the efforts,” he said.

In her contribution at the event, the Borno NHF Comptroller, Mrs Fatsuma Waziri, said the workshop was part of efforts to sensitise labour leaders on the need to key into  the funds activities in the state.

“Borno office has collected the sum of N100, 265,669 as NHF contribution between 1994 and 2000 from the state civil servants.

“The Federal Mortgage Bank of Nigeria (FMBN) refunded N13, 671,542.86 contributions to 846 contributors on retirement, incapacitation or death,” Waziri disclosed.

She said the FMBN was currently financing construction of 562 units of houses along Damboa road under the ministerial pilot scheme which  will be sold to interested NHF contributors.

Source: The Will

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Use Feng Shui Marketing Tactics To Sell A Home

Michael Matsik

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 you are about to sell your home, it might not hurt to read up on the Chinese practice of Feng Shui.

Lately, we have been hearing about an influx of Chinese investors buying Australian properties.

Now, while the true number and impact of Chinese buyers is yet to be determined, the latest NAB residential property index shows that foreign buyers now account for one in eight of all new residential properties bought in Australia.

And reportedly, both Chinese and Malaysian investor interest in Australian residential development sites and off-plan apartments looks set to rise.

The Sydney and Melbourne markets have been buoyed by recent Chinese investor activity in new residential product.

Foreign buyers were primarily responsible for the sellout on day one at the launch of Sydney Harbour's Barangaroo development, where one-bedroom, 62 sqm apartments started at one million dollars, with additional bedrooms adding another one million dollars per room.

And estimates are that Chinese developers have ploughed almost $500 million into Melbourne over the past two years.

Agencies that specialise in marketing to the Chinese community - many of whom practice the art of Feng Shui - understand the significance of this ancient tradition to its followers.

And in fact, some agencies are coming up with ways in which local owners and real estate agents can handle common issues when marketing property to Feng Shui-driven clients.

For the uninitiated, Feng Shui is the art or practice of positioning objects or orientating buildings or structures, so that maximum harmony is achieved. The practice is supposed to bring good fortune.

Here are a few Feng Shui marketing tactics to keep in mind.

Promote your address - numbers in Feng Shui all have energy or meaning. If your street or apartment number contains numbers with favourable meanings - such as 8, meaning prosperity or success, or 9 meaning the highest attainment - then it could be a good idea to promote those numbers as part of a marketing strategy for the Chinese market.

Doors - if your front and back doors are aligned, you'll need to make a few easy changes. Feng Shui practitioners believe that energy will pass directly in one door and out the other, resulting in lost wealth. A simple screen or repositioning of furniture to redirect the flow of energy will be sufficient to overcome the problem.

Front entrance - plants and flowers will help to make the best impression possible. However, if the front door is directly aligned with objects like a telephone pole, lamp or a tree, you may lose a buyer because of it.

The placement of a special mirror over the door, on the outside of the house, is considered sufficient to remedy any concerns.

If you want to know more, just Google 'feng shui tips' and you'll get over 23,000 results - some food for thought, indeed.

Whether you are an enthusiast or a sceptic, this ancient practice is widely followed by a community that is set to make a growing impact on the Australian residential market.

Michael Matusik is Director of Independent Property Advisory, Matusik Property Insights, Australia.

Roofer Burns Granny And Grandson With Hot Bitumen

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 grandmother and her 21-month-old grandson were scalded by hot bitumen when a roofer’s ladder slipped, a court has heard.

They both sustained serious burns in the incident at the grandmother’s home in Reigate, Surrey.

The grandmother, who does not want to be identified, required skin grafts on both hands and a foot, and also burned her head and face.

Her grandson received burns to his chest, forehead, face, lips and under his right arm. Both needed extensive hospital treatment.

John Terrell, 50, from High Wycombe, was prosecuted Monday (25 November) by the Health and Safety Executive (HSE) after an investigation found the incident and injuries could have been avoided had he taken more care.

Redhill Magistrates’ Court heard that John Terrell, a self-employed roofer from High Wycombe, had been contracted to felt a flat roof and was using bitumen that he melted at ground level before it was transported up a ladder.

He and a colleague had already climbed the ladder several times without incident, but it slipped just as the grandmother, with her grandson in her arms, approached the workers to ask if they wanted a cup of tea.

The bucket fell and the bitumen spilled directly on top of them.

HSE’s investigation found that the ladder had not been secured to prevent a slip. It was also in a poor condition, with missing or badly worn rubber feet.

The court was told that insufficient measures were taken to prevent the slip and spill, and that it was a wholly unnecessary incident.

Terrell, of Everest Close, High Wycombe, was fined £1,335 and ordered to pay a further £1,100 in costs after pleading guilty to a safety breach.

After the hearing, HSE Inspector Amanda Huff said:   “Extreme caution must be taken at all times when working with bitumen because it can be incredibly harmful – as the grandmother and her young grandson can sadly testify.

“John Terrell didn’t take extreme case. He was using a ladder with clearly visible defects that wasn’t properly secured, and they sustained horrific burns as a result.

“Members of the public must be kept out of harm’s way when dangerous materials are being used. The ladder issues aside, the incident could also have been avoided had they been told to stay at a safe distance.”

Source: Construction Enquirer