‘I agree with the Kuwaitis,’ he said, referring to the £pounds 400 million (S$1.07 billion) purchase last month of the Willis Building in London’s financial district by the property investment arm of the state of Kuwait\.
‘I think, selectively, there is value in London,’ Mr Strong said. When asked where he would put his money, Mr Strong nonetheless singled out the central London office market. ‘You cannot directly compare European mainland yields with London because the arbitrage between the cost of money and property yields is different,’ he said.įive-year sterling interest rate swaps – a benchmark for property borrowing costs – are currently trading at around 6.1 per cent, compared with 5.1 per cent in the case of euro interest rate swaps, according to Reuters data. He said that if yields – which measure rental income in relation to capital values and move inversely to price – were currently about 5.4-5.7 per cent for prime office property in central London, the equivalent in central Paris was in the ‘mid-to-high 4 per cents’, Mr Strong said.īut he said that direct comparisons with the UK were misleading because property investors had access to cheap debt. so the wind back is less,’ Mr Strong said, referring to property yields which have risen by around a percentage point in the last year. Say the UK has shifted 100 basis points, then mainland Europe would have shifted by between 30 and 50 basis points.
One or two of them got close but none of them went over. ‘On the up, none of the (other) European markets went over the tipping point. Mr Strong said that British commercial property values – down an average 18 per cent since last summer, according to Investment Property Databank – had started from a higher starting point after a vintage bull run. ‘We are seeing elements of repricing but the repricing is not as severe as in the UK because it does not need to be as severe to get back to equilibrium,’ said Mike Strong, president of CB Richard Ellis in Europe, the Middle East and Africa (EMEA), at the Reuters Global Real Estate Summit.ĬB Richard Ellis, a constituent of the S&P 500 Index, is the world’s biggest property services firm and generated about a fifth of its revenues last year in the EMEA region. Sometimes air rights can go for much more than the building underneath.But price drop unlikely to be as much as in the UK, says CBRE(LONDON) Commercial property prices on the European mainland are adjusting downwards in the wake of a global credit crunch but are unlikely to fall by as much as in the UK, a senior executive of CB Richard Ellis said yesterday.
This purchase was prior to erecting Trump Towers, and that’s usually the motivator behind such a purchase: “transferring the air” to another site to build a larger building. Therefore, you may want to take a page out of his book and buy air rights to certain locations, the way Trump did with Tiffany’s in New York. He made his fortune through it–and also once declared bankruptcy–so he’s been around the game. If you follow Donald Trump, you know the Great Toupee knows a thing or two about real estate. At worst, you’ll have an intriguing story to share at parties. Instead you may want to invest in these 13 Bizarre Real Estate Investment Opportunities.Īt best, you could end up with a lucrative outside-the-box endeavor that will grow your financial stake considerably. But if you’re still a little gun-shy about buying a house, we understand. Despite the 2008 housing downturn and troubles that persist in the market, real estate remains one of the safest, surest investments there is.
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