JUNE 2011 |
www.opp.org.uk Contents 05 ON THE RECORD THIS MONTH... 07
“OPP is already the world’s leading forum for property professionals and the OPP Awards for Excellence are the most prestigious accolades in the market ... clearly focused on rewarding and recognising excellence in our industry.” Geoff Hadwick, Editorial Director, OPP Group. Enter The OPP Awards for Excellence 2011 NOW: PAGE 7
“We need to make some serious and co-ordinated representations to the FSA. If we don’t, there is a severe danger that the FSA will make rulings which will dramatically impact on our ability to sell property investments abroad.” John Howell, OPP Legal Correspondent. Fight back against the FSA investigation: PAGE 29
EDITORIAL COMMENT Is Brazil a treasure chest of opportunities?
LEADERSHIP AND VISION Have you got what it takes?
08-09 INDUSTRY NEWS Turkish delight in high growth economy
10-11 INDUSTRY NEWS $16 billion rise in US international purchases
12 13 14 16 18 20 BRAZIL AND ADIT INVEST REPORT. (Pages 52 to 61)
Brazil seems to off er a sea of investment options, with wave after wave of foreign investors supposedly doing business in the country. But, the waters are not always as safe as they seem, and trouble could be lurking in the deep for those who don’t plan properly and seek expert advice. Prices are also increasing, sparking fears that we could be seeing the formation of a bubble in Brazil. Is Brazil still a treasure island of opportunity, or has its ship already sailed? We report from the ADIT Invest 2011 conference, and take an in-depth look at the country’s much-vaunted social housing programme.
CYPRUS MUST TACKLE ITS LAZY ATTITUDE MARKET SNAPSHOT: BRAZIL
FINANCE NEWS French tax sting hits second-homes
DEVELOPER NEWS High demand for French ski resorts
FRACTIONAL NEWS Fractional Life Expo moves to ExCel
MEDIA NEWS RCI invests hard in a digital future
TRAVEL AND TOURISM NEWS Cape Verde takes off for the Resort Group
PEOPLE: MOVERS & SHAKERS Chesterton Humberts focuses on overseas
24-25 YOUR SHOUT - LETTERS AND BLOGS Cyprus must lose its cavalier business style
26 27 29
USA VIEWPOINT - NAR Falling dollar hurts the US economy
AIPP ADVICE It is essential to communicate properly
LEGAL LESSONS Don’t be silly, and stand up to the FSA
30-31 THE 55+ MARKET Speak not of age, it is condescending
32-33 FUNDING FIGURES Mortgage data analysis from the experts
34-35 ALTERNATIVE INVESTMENTS Why you need to keep looking for new ideas
39 41 43
24 | Our business leaders have had a culture of “What can we get away with?” for too long says Alan Waring.
DON’T GET LOST IN THE CROWD
60 | All the facts and fi gures on Brazil, an emerging economy that is growing at breakneck speed.
OPP AWARDS FOR EXCELLENCE 2010
FRACTIONAL Why equity-based destination clubs do well
SUSTAINABILITY Put it positively, and don’t put people off
MORTGAGE MATTERS Borrowing abroad can be very diff erent
45-46 NEWS ANALYSIS - FSA & UCIS An urgent call to arms as rules tighten
48-49 OPP AWARDS FOR EXCELLENCE 2010 Who won the Best Fractional Product award?
50-51 DIGITAL MARKETING Add personality if you want to sparkle online
52-55 ADIT INVEST 2011 BRAZIL OPP reports from the conference fl oor
56-58 BRAZILIAN SOCIAL HOUSING Take a close look at this booming market
60-61 MARKET SNAPSHOT - BRAZIL All the facts and fi gures
62-63 TRADE DIRECTORY Contacts and opportunities
64-65 THE LAST WORD - NICK BETTANY The Hideaways Club is being expanded fast
50 | Businesses need to have a personality if they are going to shine online says Hallmann Marketing.
48 | Find out who won the OPP 2010 Best Fractional Product and Moroccan Developer categories ... and why.
66-67 CAREERS SECTION Find your next job in OPP
CONTENTS
Contents | 3
MAY 2011
MAY 2011 |
www.opp.org.uk
ADIT BRAZIL REPORT easure chest of opportunity?
to ADIT Invest 2011, Brazil’s largest went along to
this – you have a relatively stable, functioning and conservative real estate system.” Jim Fetgatter, CEO of the
d by the global
financial crisis. He said: “People are thinking, ‘Where can I invest where people didn’t get too smart for their o investors
Brazil because
they didn’t realise the US market was built on an unsustainable leverage. Latin America didn’t do
iness in Brazil is be- over the world
rices. Margaret Sum-
ears have seen significant e rates between the on the change it
sing problems for those looking to get involved now, my concern would the government is also going up,
e. Jorge Chaskelmann, the director of Aquiraz , labour costs have gone up, equipment ezing the profits down, but the square metre
content about a possible bubble forming, but razil seemed adamant that this is not the
: “There’s no bubble in Brazil. Real estate is growing, r of a bubble because of the banks.
, the maximum they’ll give is 70% or 60%. e have noticed is a
os to building Minha Casa Minha Vida style . If the middle class carries on growing
e market here. For us, the price rises have been a f years ago was selling at R$4,5000 per
e that because of the demographic factors
razil is at much less risk of a bubble than its fellow BRICs. e’s radars already is a positive sign, as it means
ed, according to Greg Rockwell. He said: “It’s out, because it means if there is one you’ll see
oretical standpoint, one of the best things you can k about it all the time because it results from the
ket at transmitting information.” He added: “If you want to hing just talk about it a lot and the market will react. If a reality then deny it as fervently as you can.”
Association of Foreign Investors in Real Estate agreed. He said: “The global financial crisis really kicked off the search for yield for our large institutional members. They started thinking – ‘I can go to Brazil, China or India, and I can get better yields and the risk is not that much greater.” This is being borne out by evidence too. Fetgatter said: “One of the questions we ask our members is ‘Which emerging country are you considering investing in?’, and Brazil was number one by a fairly large margin.” The country also came 4th in a survey of which countries institutional investors thought offered the greatest opportunity for capital appreciation.” Rockwell added: “Most of the
demand here is internal, and that’s a real benefit that Brazil has. There is also room to grow, more so than the other Latin American countries – if you look at Chile for example it has a fabulously developed financial system but no room to grow. Brazil has tonnes of room to
grow.” Margaret Summerfield used the
example of Panama to illustrate why strong internal demand is so important. She said: “The market in Panama is completely flat – there isn’t the exposure to sub-prime lending. The issue they have is overbuilding of the wrong
“A real benefit of Brazil is that most of the demand here is internal. There is room to grow”
type of apartments. They were building luxury apartments aimed at foreigners, and 50% of buyers were North American, so when the crisis hit their market went. That’s what caused the problem in Panama – exposure to foreign markets they had no control over, and building units not for the local market, but
specifically for foreign buyers.” The majority of investors are
coming from the US at the moment, according to Spencer Anderson, the deputy editor of FDi Intelligence. He said: “We’ve seen a lot of interest from Europe, even the Chinese are getting involved, but it has traditionally been dominated by the US investors. As it grows in popularity you’ll see a broader range of investments.” For those coming from overseas,
finding the right partners is of crucial importance, according to Mark Jeffery, OPP executive panel co-chair and director at the Origen Group. He said: “The secret is to sift through the opportunity and find what is attractive to international partners, and that requires trust, corporate governance and transparency.” Richard Cash, a partner in Invest in Brazil, and panellist at
the conference, told OPP: “Theres a whole host of opportunities for the international market to take advantage of Brazils growth right now. The caveat is that it is an emerging market and has its own rules, and its own path of least resistance. Its important to understand how the market works and how decisions are made, from planning and licensing to money transfer. This is critical to being able to operate quickly and efficiently. There are huge opportunities, but like all things, its got to be done diligently. Get to know how the market works, and where the real opportunities are.”
BRAZIL | 53
“As an emerging market, Brazil has its own rules. Get to know how the market works and where the real opportuntities are”
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