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Colliers Investment Jan Feb2010

Colliers Investment Jan Feb2010

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Published by Coy Davidson
Colliers International GIST Newsletter Jan/Feb 2010
Colliers International GIST Newsletter Jan/Feb 2010

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Published by: Coy Davidson on Feb 10, 2010
Copyright:Attribution Non-commercial


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Colliers London isdelighted to bring tothe market 40,201 sq ft(3,734.7sqm) of mixedused commercial property,including offices, retail,nightclub and restaurant,According to Real CapitalAnalytics, global salesof significant propertiesapproximated 338billion in 2009 barringany unexpected majortransactions that occurredat yearend. This level of volume represents a 38%decline from 2008 and isjust over a quarter of thepeak volume recorded in2007. Barely a handful of countries saw transactionsincrease in 2009.
A Colliers International Newsletter
Yearly Decline Masks RecentPositive Changes
Another frst class instructionor Colliers London
   J   A   N   /   F   E   B   2   0   1   0
The investment marketturned notably moreactive at the end of 2009as investment sentimentimproved on the backof ample liquidity, withdomestic investors themajor buyers. Whilewe expect this trend tocontinue in 2010, foreigninvestors will take anincreasingly proactivestance in acquisition,backed by their increasedconfidence in the Chinamarket due to its prompteconomic recoverycoupled with theirimproved balance sheets.Apart from foreign funds,several policy initiativeswill also widen thesources of capital in theinvestment market. Itis likely that the pilotscheme on REITs will belaunched in 2010. Theestablishment of realestate RMB funds willalso take shape duringthe year. Although therevised Insurance Lawof October 2009 allowsinsurance companies toinvest in the propertymarket, it is worthnoting that, on January 21, 2010, theChairman of the ChinaInsurance RegulatoryCommission stated thatinsurance funds wouldnot be allowed to investdirectly in developmentprojects or the residentialand commercial propertymarkets. This statementmay be interpretedas having a short-term negative impacton the investmentmarket, although weconsider it helpful forthe development of a stable commercialmarket, preventing theoverheating of propertyvalues, as seen in theresidential sector last year.Barring adversetightening by thegovernment, capitalvalues are expectedto hold firm in 2010,underpinned by theoptimistic economicoutlook and improvedinvestment sentiment.By contrast, rentalsof most commercialproperties will stayflat or continue theirdownward spiral in theyear, further compressinginvestment yields. Thatsaid, as investors tend tobe less risk-averse, theirlower yield expectationswill help close the gap. Notwithstanding the yieldcompression, we believethat the expectation of a positive rent reversionand the appreciation of the RMB, as well as futurecapital gains, will be thekey drivers underscoringinvestors’ interest inacquisitions.
Why invest in… Shanghai
While these headlinefigures show a market indecline, quarterly numbersillustrate a market thatis improving. Volumehit its low in Q1 and hasconsistently improvedeach quarter since. Half of all countries experienceda more active second half in 2009. The expectedincrease in transactionsin Q4 is more modestthan the growth foreither Q2 or Q3, but it ismore broad-based acrosscountries and continentsthan earlier gains thatwere driven primarily byChina. With propertyinvestment in most majorcountries now on theupswing, the forecastfor 2010 is cautiouslyoptimistic.
By Lina Wong, Managing Director, Colliers East and West China
15 Berkley Street
35 Dover Street
located in London’sMayfair.Fronting two of thearea’s most prestigiousstreets, Dover and BerkleyStreet, the freeholdsite offers significantfuture developmentopportunities, includingpart residential and/orpart owner occupier. Thetotal current income of £1,840,641 per annum,with over 50% of theincome being until 2019and a low capital value of only £802 per sq ft.Offers invited in excess of £32,270,000 reflecting a5.4% Net Initial Yield afterstandard purchaser’s costsof 5.7625%.For more information,please visit the website:www.colliersdocuments.co.uk/doverandberkeleyor contact Dominic Ameyon +44 207 344 6604dominic.amey@colliersgv.co.uk
Collaboration at its best
Colliers in Germanyhas collaborated withColliers Boston in regardsto a major German bankwith assets in Boston.The existing relationshipsbuilt in Germany havehelped to facilitate an inwith the Bank and asa result the Bostonteam may assist thelender in disposing of akey asset and establishColliers as a globalinvestment resource forthe bank.The Londoninvestment team isworking with a majorclient of the Hong Kongoffice who is looking toacquire investments inCentral London, up to£200 million.

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