JANUARY 2012 |
www.opp.org.uk
NEWS Funding crisis set to go on By Geoff Hadwick
The property sector is going to go on facing fundraising diffi culties next year because only 35% of investors plan to invest in new real estate funds in 2012, says a report out this month from US-based research group Preqin, and developers will need to battle hard to get project monies. Preqin’s Real Estate Data manager
Andrew Moylan told OPP that many investors are delaying their commitments due to uncertainty.” “However, the high level of dry
powder available to fund managers worldwide puts them in an excellent position to take advantage of investment opportunities in real estate markets worldwide,” he added. And, “with a smaller proportion
of investors keen to make new commitments, conditions are set to remain tough for real estate managers,” Preqin warns. “The number of investors planning
to invest, meanwhile, has declined from 45% to just over one-third, meaning that the fundraising market will be extremely competitive.
Out of pocket | Preqin reckons that developers will need to fi ght for new monies
The outlook for international property in 2012, according to Preqin, is: • 16% of investors have yet to fi nalise their investment plans for 2012; • Conversations between Preqin
analysts and real estate investors over the course of November revealed that 41% of active investors plan to invest more in real estate in 2012 than they did in 2011; and 29% anticipate investing less; • There is around $158bn in dry
powder available to real estate fund managers at present; • Over half of the available dry powder is held by North America-
focused funds; • Real estate fund average NAVs (net
asset values) increased in each quarter between Q2 2010 and Q1 2011; • The weighted NAV increase, which
takes into account fund size, was 7.1% in Q1 2011 and was higher than the non-weighted fi gure, suggesting that larger funds are outperforming their smaller counterparts; • While funds of vintages 2004,
2005 and 2006 have been negatively affected by the downturn, those of 2008 vintage are showing median IRRs in positive territory.
Guernsey QROPS facing the axe
GUERNSEY-BASED Qualifying Recognised Overseas Pension Scheme (QROPS) providers could face trouble as the UK government looks to clamp down on tax- avoidance. The proposed provision requires a uniformity of tax treatment of benefits for local and non-local residents… something that Guernsey does not conform to. HMRC said a QROPS
CHINA CURBS STAY
CHINA will retain stringent property legislation into the New Year in order to bring house prices back down to a “reasonable level” according to the country’s offi cial Xinhua news agency. Beijing will “unswervingly maintain its regulation policies,” it said.
wouldn’t be recognised “if the country’s tax regime does not meet these conditions.” Stephen Ward, managing director of Premier Pension Solutions, told OPP that this has, for UK purposes, “affectively closed down Guernsey” as a QROPS base. Guernsey currently holds 35-40% of them. QROPS firm Brooklands Pensions said the changes pose “a risk to Guernsey QROPS”.
US REPOS FALLING
US foreclosure fi lings declined last month according to RealtyTrac, as mortgage providers delayed evictions over the holiday period. Data supplier RealtyTrac said that 224,394 properties received default notices in November, down 14% year-on-year.
INDUSTRY | 09
NEWS IN BRIEF Cyprus facing more woe
THE number of overseas property buyers investing in Cyprus continues to slump with only six homes purchased in Nicosia by foreigners during November. The total number of overseas sales during November was down by 43% year-on- year to just 103 transactions. November also ended up the island’s second-worst month of the year for overseas property sales with just 103 contracts of sale deposited in favour of overseas buyers at the national Land Registry.
Dubai auctions begin
DUBAI has begun to auction properties that have been forfeited by defaulters in a bid to “clear the market”. Properties available at the auction, the fi rst of its kind hosted by the Dubai Land Department (DLD) were from The Springs and Jumeirah Islands developments. Four out of the fi ve properties auctioned were sold, including one two-bedroom Springs villa which went to an Indian buyer for Dh1.306 million.
New Brazil fund launched Fragile | Guernsey QROPS under threat OTTAWA LAND GOES
HOUSING land in Ottowa, according to CBRE’s senior sales associate Nico Zentil, is “now grabbing investors’ attention. There is a lot of buzz in that sector right now,” he says. CBRE’s residential land business in Ottawa doubled in 2011, he said.
THE investment management group BGB Weston has joined forces with Brazilian international property advisors Origen to market a new “Brazilian Impact Investment Fund” designed to pump money into the second phase of the country’s massive Minha Casa, Minha Vida (MCMV) social housing programme because its “time has come.” The MCMV initiative, (which translates as My House, My Life) is one of the biggest social housing projects in history, generating more than €65 billion in Brazilian government funds so far. €52 billion has been allocated for Phase 2 alone with the intention of building 2 million homes by 2014 says Origen.
3 TOP US STATES
US-BASED website
www.point2.com, revealed this week that property for sale in Florida snapped up 33% of all international site traffi c in Q3 with Arizona attracting 15% and Nevada 8%. Most of the potential buyers - six out of ten - came from Canada.
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