regions

kingdom tower

Engineers working on the Kingdom Tower, a 3, 280-foot-high construction intended for Jeddah, in Saudi Arabia, are beginning tests on the materials they’ll need to use to construct it. 3, 2800 feet is a little over half a mile, and as a result, advanced materials and techniques will be needed both for the tower itself and for the process of constructing it.

For the final construction, engineers will face challenges like figuring out how to match elevator technology to the new elevation – how to transport people vertically for distances of half a mile or more in an acceptable time without making it feel like the world’s most incongruously upmarket fairground – and how to circulate air, water and other essentials around the building. But that will have to wait until they’ve figured out how to build it at all.

Before the tower even gets off the drawing board, engineers have two major problems to overcome, depth and weight. The Kingdom tower will require foundations around 200 feet deep, which means they’ll penetrate the (salt) water table. Since salt water is notoriously corrosive to steel and concrete, which are certain to be the tower’s two main ingredients, this will present a new set of engineering challenges. After this is solved, at least in theory, weight must be addressed.

The tower will likely contain over 80, 000 tons of steel. That will have to be mixed with new blends of high-strength concrete to cope with the increased stresses of the kilometre-high tower. When the tower simply stands erect, the forces acting on it will mostly be compression – the weight of the floors above will press down on those below, and the walls and skeleton of the building will need to be strong enough to resist. But when the wind blows, the whole building will act like a giant beam, with a mixture of tension, compression and shear forces distributing themselves along its height. That will require even more strength from the building’s structural components.

Having figured out how it’s to be done, though, the engineers will have to figure out how to do it. When Vadim Makhorov and Vitaliy Raskalov climbed the still-unfinished Shanghai Tower, they passed through clouds on the way up. The Kingdom will be significantly taller – a third again higher, in fact – and while, unlike the plucky Russian duo, workers on the project will have safety equipment, they’ll also have a near-impossible job to do when they get to the top.

Concrete in buildings like this is poured, pumped under pressure from a base station through a tube that’s normally no thicker than six inches long a swinging arm to allow it to be laid over the steel rods that hold the building together. That involves some pretty impressive forces on the second floor. Half a mile up, it’s a whole new game.

Something similar has been done before, though. When the Burjj Khalifa went up, an engineering team led by Samsung was able to pour almost six million cubic feet of concrete through a single tube, thanks to innovative pump design from German firm Putzmeister. The Burjj, though, is still not quite Kingdom Tower sized.

It’s always possible that the Kingdom Tower itself might never get off the drawing board. But the methods used to build it will be used, even if that’s for other projects. As Dr. Sang Dae Kim, director of the Council on Tall Buildings, told Construction Weekly, ‘in terms of practicalities, we don’t need to build at two kilometres – but someone with a lot of money might still want to do it.’ The technology will be developed with one eye to the Kingdom Tower, then – and one to the future.

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Image of Barbados
Investing in Barbados
Barbados

Investment in the caribbean is taking off this year as holiday traffic to the Caribbean is increasing and the investor environment in the area is becoming more favourable: a double advantage for buyers.

The Caribbean has long been a favoured destination for Americans, and throughout the last couple of decades Europeans have caught on too, and the region is now a very mature tourist destination offering everything from classic sun, sea and sand vacations to more specialized eco-tourism, luxury spas and it’s one of the world’s top destinations for honeymoons.

It’s that tourism trade that underpins investment in the Caribbean increasing its overall appeal as an investment location. In fact, one of the most significant trends in property investment over the last few years has been the growth in dual citizenship opportunities and tax advantages in the Caribbean. St. Kitts, Dominica, Belize and Barbados have already implemented these and they are soon to be joined by Grenada and Antigua.

Knight Frank’s Caribbean Prime Residential Insight report 2014 said the number of prime sales rose by 10% to 15% in Barbados and the British Virgin islands. While prime sales are rising, sales in lower price brackets are following suit and prices are stabilizing following the 2008 crash.

The great advantages for individual investors in the Caribbean region are that many islands have few or no residency requirements, and many operate Citizenship by Investment programmes deliberately to foster overseas investment. The terms of the programme offer to grant citizenship to investors in the local property market, making it far easier to do business in their more favourable tax environments and simultaneously improving liquidity in local property markets and in the local economy as a whole.

The World Travel and Tourism Council has predicted that Grenada, shortly to introduce its own Citizenship for Investment programme, will be the fastest growing market in the region between 2011 and 2021. The organization expects the programme to benefit not just high net worth individuals, but the market as a whole, by its positive impact on property values.

One solid recommendation for the returns possible from Caribbean investment is the increase in Chinese investment in the region. By 2013, according to analyst Richard L. Bernal, China was the area’s largest single source of foreign investment and the rise in Chinese involvement in the region continues.

And it’s not just the Chinese: foreign investment from all sources reached a record high in the Caribbean last year, according to the UN Conference on Trade and Development. Trade flows to the region increased by 18%, to total an estimated $294bn, or 38% of the world’s total.

It’s the tourist market in the area that underpins the growth of its property market, with Google search engine activity indicating a growth in searches for ‘holidays in the Caribbean’ of 48% in the year to January 2014.

That upsurge in interest in the region is confirmed by James Mannings, of Top Villas, who comments that ‘we have seen an increase of 31% from last year… it certainly seems as though those renting or looking to rent in the Caribbean are expected to benefit in 2014 and onwards with the continuing popularity of the islands.’

Check out our property search for Barbados properties for sale

Source article: http://wwww.aplaceinthesun.com/news/feature/tabid/131/EntryId/2547/Default.aspx

The U.S. saw its biggest year-on-year house price rises since July 2006 in December 2012, according to Standard and Poor’s Case-Shiller Home Price Indices, released February this year.

The rise in prices across 20 U.S cities was 6.8%, and the national 1-year change was 7.3%.  That’s slightly over the 6.62% rise widely expected by economists.  The highest-performing city was Phoenix, Arizona, posting a 23% 1-year increase, while the poorest performers were Chicago, at 2.2%, and New York, which saw a 0.5% fall in property prices.  That compares with a growth rate for the economy as a whole of around 2%.

Unlike the year-on-year rise, which was led by Phoenix, the month-on-month rise in house prices was led by Las Vegas and Los Angeles.  The final quarter of 2012 saw prices fall by 0.3% from the previous quarter, but still 7.3% above their fourth-quarter 2011 figures.  However, the year-on-year figures are a better indicator of trends in prices, according to a panel of economists that includes Karl Case and Robert Shiller, the economists who came up with the Case-Shiller index.  ‘As of the fourth quarter of 2012,’ says Standard and Poor’s press release, ‘average home prices across the United States are back at their Autumn 2003 levels.’

Overall, ‘home prices ended 2012 with solid gains,’ says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices.  ‘Housing and residential construction led the economy in the 2012 fourth quarter,’ Mr. Blitzer went on.  Purchases of previously-owned homes rose in January even as depleted inventories restrained further improvement.  The National Association of Realtors reported last week that about 4.66m existing homes were sold last year, the highest figure since 2007.

Not everyone agrees that it’s a ‘real and sustainable recovery,’ though, in the words of one doubter, Quinn W. Eddins, Director of Research at RadarLogic, a data and analytics business.  Mr. Edins says he expects home prices to decline temporarily this year, as the rise in supply caused by the increase in prices last year tilts the market back towards oversupply.  ‘Home prices are likely to follow such a saw-tooth pattern form a number of years, until consumer demand increases and inventories of distressed homes return to historical norms,’ Mr. Eddins writes, referencing his belief that job growth and rising consumer confidence are not playing a sufficient part in the housing market.

It’s possible to self-inflate a housing market for a while, with construction and sales driving each other without input from the wider economy, though it usually ends in disaster.  And sometimes even city-wide statistics can disguise rises in prices at one end of the market while the rest founders.  We’ve seen recent examples of a two-tier housing recovery in the USA, when luxury properties recover or even boom while foreclosures rise.  But that isn’t happening here.

Borrowing costs, though they have risen slightly, are still at near-record lows and gains in employment are fuelling demand.  Property values are rising as foreclosures fall and the number of houses on the market is also decreasing, indicating a general recovery in the market.

It’s not local to one area, either.  ‘The key here,’ says Brian Jones, a senior US economist at Societe Generale in New York, ‘is it’s not as if we’re getting all the juice from one area, it’s broadly based across the country.’  Mr. Jones correctly predicted the rate of rise over 2012.  He goes on to explain, ‘rates are low, prices are attractive, so affordability is high, and the labor market is gradually healing as well.’ He goes on to offer this advice: ‘If you were in the market to buy a home, now it’s a good time.’

Photo credits: Dean via Flickr

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The Coalition government began its term of office with a clear policy focus, clearly defined aims and clearly defined methods.  George Osborne will be judged as a success or as a failure by the UK’s ability to improve economic performance by reducing sovereign debt.  To this end, cuts to welfare, to pensions and to benefits have been made, over objections from MPs and campaigners.  To this end the major focus of the Osborne plan has been to reduce government spending so that the nation can pay its debts.  To this end money has been poured into banks, to encourage them to lend and stimulate business, while the UK has seen the deficit fall by a quarter even as the flow of credit has failed to restimulate an economy headed for a triple-dip.

The Bank of England and another building from the City

It’s no coincidence that the country’s woes remind those with long memories of the chaotic, strike-stricken and economically sluggish late 1970s.  The last time Moody’s withdrew its stamp of approval, the AAA credit rating, was then; Britain has held the highest credit rating possible since 1978.

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The high cost of rent and difficulties of getting onto the housing ladder have conspired to prevent many young people from getting their own places to live after graduation.  Instead they have returned to the family home, in record numbers, earning themselves the soubriquet’boomerang generation.’  According to a report published late last year by housing charity Shelter, 1.7m adults between 20 and 40 are living with their parents purely because they cannot afford a place of their own.

It’s a long term trend in itself – since 1997, the number of people between 20 and 34 living with their parents has risen by 20%, or half a million people, and now rests at 1.6 million.

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Wind Tower I and II Dubai

Development in Dubai froze or stalled in many cases following the 2008 crash.  But gradually, Dubai’s property market has started to recover and stalled or partially shelved projects are returning.  Dubai’s property market has climbed steeply this year – while it did not make gains comparable to the pre 2008/9 boom years, but still represented among the sharpest gains in the property sector globally this year.

This week three of Dubai’s stalled projects were restarted: two in Jumeirah Lakes Towers and one in Business Bay.  They have been revived under the Dubai Land Department’s (DLD) Tanmia initiative.

The Director-General of the DLD, Sultan Butti bin Mijrin, told Emirates 24/7 that “we have approved two projects Wind Tower I and II under Tanmia.”  He went on to explain, “we are working with more investors on a number of projects.”

The project in Business Bay has been taken over under the Tanmia initiative by Pacific Ventures and has been renamed Burj Pacific.  Pacific Ventures has confirmed that the project will be relaunched this month.  “We recently took over one project in Business Bay,” Parvez Khan, the Chairman of Pacific Ventures confirmed to news website Emirates24/7.  “The majority of the original investors have agreed to continue with our project.  We have new contractors on site and work has commenced.’  Burj Pacific is a 21-storey residential tower, comprising 150 apartments and penthouses.  The project is due to be completed by 2015.

Mr. Khan’s company told Emirates24/7 in June that his company was planning to spend Dh50m over a two-year period to take over projects listed under the Tanmia scheme.  Tanmia – Arabic for “development’ – is the DLD’s scheme, launched in September of 2011.  It’s aimed at getting semi-government and private investors on board to get stalled or endangered projects completed.  Currently, the development is auditing over 100 projects.

Majida Ali Rashed, Senior Counsel Strategy, DLD, has said that the Tanmia initiative will continue to operate for three to four years, but warned that the process would not be easy.  “The scheme targets the government and private sector and will help them benefit from these projects, but it is not an easy task.’  Part of Tanmia’s remit to settle all pending issues and revitalize stalled real estate projects will be to audit the accounts of projects.  Property developers and investors can approach the DLD to seek inclusion of their project under Tanmia, but, as Mr. Rashed points out, “We have to look at all the legal, technical and financial aspects before allowing another investor/developer to take over the project.”

Pacific Ventures, Mr. Khan’s company, has already taken over two projects in Jumeirah Village Triangle.  These projects have also been renamed, as Pacific Residencia and Pacific Edmonton Elm.  The company is also on track to take over a project in Dubai Sports City.  Mr. Khan says that the majority of the “old’ investors in the Edmonton Elm project have decided to continue investing in the project, though ’15 per cent are defaulters… we will seek cancellation of their contracts through proper legal channels.’  The Pacific Residencia project’s building is over 40% complete and the project’s original investors have overwhelmingly decided to stay with it.

Despite the good news from Dubai’s housing market and the organizational aid from Tanmia, the future may not be entirely rosy for the Dubai property market.  A boom in building luxury apartments has meant that the residential market in Dubai is unduly weighted towards a cohort of high earners who aren’t there – there’s approximately a 15% oversupply in this area.  However, this may to some extent be made up for by the increase in value of midrange properties – up 20% in the last year, according to economist Farouk Sousa – and a “misfortune dividend’ as the chaos of the Arab Spring makes Dubai’s stability desirable.

Ho Chi Minh City Vietnam

Vietnam’s property market was once one of Asia’s hottest.  But in recent years it has cooled and officials blame both speculation and banking practices for the constriction of the sector’s financial arteries.

Vietnam’s property market is the country’s most popular sector for foreign investment, according to online newspaper VietnemNet.  Data released by the National Finance Supervision Council showed $9bn of foreign money invested in Vietnam in 2011, and 52% of this found its way into the property sector.

However, Vietnam’s economy has not remained immune from the events of the outside world.  Low demand has resulted in weak liquidity, and high inventories continue to restrict economic activity by holding investors back from paying their debts.  Many businesses faced bankruptcy or closedown due to issues concerning high inventory and debt, and the industrial index declined markedly in 2011-12, falling 21% between January 2012 and January 2013.  Although Vietnam’s long-term outlook remains bright, with the country tipped by HSBC to become the world’s 41st largest economy by 2050, the immediate future is problematic.

As far back as August of 2012, Vietnam’s property sector experienced a crash one official compared to the 2007 crash in Thailand.  Hua Ngoc Thuan, chairman of the People’s Committee of Ho Chi Minh City, layed the blame at the feet of property speculators who he said had ‘pushed the prices so high.’

The bad debt issue is also a major worry for the Vietnamese economy as a whole.  Jonathan Pincus, an economist in Ho Chi Minh City, warned the Economist that the banking crisis ‘is going to constrain growth for a serious amount of time unless it’s dealt with.’

The seriousness of the bad debt problem in Vietnam is underlined by the State Bank of Vietnam’s upwardly-revised estimate of the bad debt in the country’s banking system, at 8.8%; that’s already the highest in South-East Asia, but the bank Standard Charter puts the figure at between 15% and 20%, perilously close to the 20% national credit cap and consequently posing the danger of paralysing the banking system.  After Dr Tran Du Lich of the National Financial and Monetary Policy Advisory Council used the phrase in 2012, the combination of bad debts, poor liquidity, inappropriate regulations and long-lasting large inventories is now commonly called Vietnam’s ‘blood clot.’

For foreign buyers Vietnam presents several unusual obstacles.  It’s impossible to own land there, it must be leased from the state, and the mortgage rate is 13%, set deliberately high to cool a roaring market and combat Asia’s steepest inflation rate.  Additionally, property purchases will usually be conducted not in dollars or in the Vietnamese Dong, but in gold.

With the difficulties mounted against them it might seem no wonder that foreign investors are less involved in the Vietnam property market than they were recently, but it’s unlikely to be the peculiar regulatory environment that has deterred them.  More probably it’s a property bubble that has just burst, with such overinventory that Nguyen Duy Lam, director of construction and real estate company Pacific Real, told the New York Times that ‘everyone wants to sell, but they can’t even if they lower the price.’

The State Bank of Vietnam (SBV) is trying to use injections of foreign capital to rescue banks it thinks worth saving while urging others to merge.  Some Japanese banks have taken an interest and the SBV has submitted a draft decree to allow foreign investors to take up to 30% interest in Vietnamese banks, up from the 20% limit at present.  Following a European lead, the Vietnamese government has also announced plans to set up a ‘bad bank’ to handle all the sector’s bad debts.

However it comes about the property market in Vietnam is not expected to recover without reform of the Vietnamese banking sector, and this will take time.

Photo credits: Marcel via Flickr

Florida Condos on Sunlit Harbour Island

A decade ago, Florida was a hotspot in the US-wide housing market furnace. Across the country house prices rocketed but Florida saw one of the sharpest rises nationwide.  Ten years later, the aftermath of the 2008 meltdown has seen Florida’s foreclosure rate top out above even Nevada.  While the housing market nationwide has become a rare economic bright spot, Florida is still recovering.

The foreclosure rate across the US as a whole seems to have peaked in 2010 and has since begun to fall even in hard-hit Nevada.  But in Florida it continues to rise.  Florida cities account for eight of the top 20 metro areas for foreclosures.  The Orlando-Kissimmee, Lakeland, Jacksonville, Tampa-St. Petersburg and Melbourne areas of Florida all have at least 28 months’ worth of foreclosed properties for sale and foreclosures account for at least 24% of all sales.  Most tellingly, foreclosure activity increased at least 50% last year.  And in the Palm Bay-Melbourne-Titusville metro area, tipped by foreclosure tracking firm RealtyTrac to be the best place to buy foreclosures in 2013, foreclosure activity rose 308%.

All this hasn’t necessarily resulted in a cheaper market on the ground.  As prices have fallen and a spate of vacation homes has hit the market, there has been a return to home flipping, in which developers buy up properties cheap and sell them for a quick profit after carrying out improvements.  Over a year ago, Warren Buffet said that family houses were ‘as attractive an investment as you can make,’ and RealtyTrac says plenty of companies and individuals have been following his advice.  During the same period that foreclosure activity roles 50%, flipping activity rose 25% as giants of the industry like the Arizona-based Colony American Homes bought up housing and resold it, on average for a $29k profit per property.  Many of the homes are being bought to be rented until prices rise, when their equity can be realized by sale.  In the meantime they’re helping to improve the housing markets across Florida:

The slow rate of foreclosure proceedings is partly to blame for the explosion in foreclosures.  Some cases spend four years going through the system to foreclosure.  In fact, there’s a proposal going through the State Legislature that would give lenders only one year, instead of the current five, to pursue a judgement against a homeowner in foreclosure cases.  And since Florida contains five of the ten places named by RealtyTrac as the foremost places in the US to buy foreclosed property, it sounds like the sort of measure calculated to be popular with the banks that own the properties.

However, the proposal, HB 87, would require that the banks came to foreclosure cases with all their paperwork in order.  ‘We’re telling the lenders, don’t bother filing the complaint unless you’ve got it right,’ says Rep. Kathleen Passidomo, R-Naples.  ‘It’s got to be done right.’   The bill passed the House Civil Justice Subcommittee by a 10-3 vote.

Many banks see this requirement as making the proposal work against them.  That’s because many homes have been bought by other banks since being leased or sold and the deeds, promissory notes and other paperwork can be scattered to different institutions across the country.

Amidst the arguments over HB 87, the legal fights over individual foreclosures and the mass corporate buy-ups, is there room for a small investor or purchaser?  Yes, but it’s a more complicated and competitive market than a cursory glance would suggest, for the reasons we’ve gone over.  Anthony Askowitz, a broker with RE/MAX Advance Realty II in Miami, FL, elaborates: ‘The inventory of the foreclosures market is very low.  It’s highly competitive for a foreclosure or a property put out as a quote ‘good deal’.  Multiple offers is the norm.’

Photo credits: Matthew Paulson via Flickr

Bangkok City Skyline

Thailand has been a popular destination for tourists and expatriates for over three decades.  Over this period  it has experienced an extended property boom, which has been particularly concentrated in the Bangkok Metropolitan Region (BMR).  The BMR contains 17% of Thailand’s population and accounts for 44% of its GDP.  Household incomes there average 42, 000 baht, nearly double the Thai national average, and demand has grown along with supply as Thailand urbanized.

The recent trend has been for developers to look further out from the centre of Thailand’s economy, finding provincial sites.  One reason for this could be a slowdown in the BMR property market as it reaches saturation.  Typically 80-100, 000 new units are sold each year, but the absorption of new housing units has flattened off at 35-40% and inventory levels are struggling.

As in many Asian markets prices are rising faster than income growth.  Although Bangkok is no Hong Kong in this regard, it is experiencing an affordability problem.  As in Hong Kong the response from developers has been to downsize already small living space, but many Bangkok apartments are already 20-30m2.  Additionally, a smaller number of condominiums than expected were built in 2012 and the numbers are expected to fall further this year.  Of those built, 54% were in suburban areas of Bangkok and the trend for decentralisation is expected to continue both locally and nationally.

While the mass market may be saturated there is still strong demand for highly desirable locations along the proposed skytrain route, and competition in this market is intensifying.  As it does so, developers are climbing aboard the bandwagon and presenting their products as tailored to a luxury-oriented foreign market, in line with the conclusions on the importance of branding drawn by Rinchumphu et al in the International Real Estate Review.  Other developers devote themselves to the foreign market which they claim is booming.

Another reason for the withdrawal of developers from the BMR could be the blows to consumer confidence caused by the 2011 monsoon floods and the recent political unrest in Thailand.  The floods in particular pointed up a key concern for the BMR area: it’s located around the mouth of the Chao Praya River and is very vulnerable to flooding.  It’s also built on an alluvial flood plain.  As a result of aggressive groundwater extraction, Bangkok was sinking at a rate of 10cm yearly in the 1970s, and even now is sliding into the Gulf of Thailand at about 1-3cm yearly.

Additionally the sea level in the Gulf is expected to rise between 19 and 29cm by 2050 as a result of global warming, leaving BMR residents with the unwelcome prospect of a 4m descent by 2050.  The World Bank expects Bangkok’s flooding risk to increase fourfold by mid-century, and experts agree.  ‘In 50 years,’ according to Mr. Anond Snidvongs, a climate change expert at Chulalonkorn University, ‘most of Bangkok will be underwater.’

There are further troubles ahead for the Thai contruction industry, too.  The Thai government is currently drafting the third round of the country’s zoning laws.  Based on information collected in 2004, these reallocate much suburban land to agricultural purposes, and have been attacked for being out of date and restrictive to development.  The Thai Industry Minister Prasert Boonchaisuk said at the start of the month that he had asked the Interior Ministry to reconsider its plans.  In an especially harsh blow for urban Bangkok the new plans will include restrictions on the height of new buildings, slowing condominium production further.

The Stock Exchange of Thailand (SET) has risen recently and there are other promising signs including the Thai government’s commitment to a gigantic, nationwide infrastructure project that will see $77m spent in the next decade and will include several new mass transit systems, opening suburbs to development.  However, the old model of strongly centralized urbanization in the BMR is probably gone permanently, despite sales talk to the contrary.  David McCauley, the ADB’s chief climatologist, puts it more bluntly: ‘There is no going back.  The city is not going to rise again.’

Photo credits: Mike via Flickr

 

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Pacific Edmonton Elm Development Revived by Developers in Dubai

Development in Dubai froze or stalled in many cases following the 2008 crash. But gradually, Dubai’s property market has started to recover and stalled or partially shelved projects are return.  Dubai’s property market has climbed steeply this year  while it did not make gains comparable to the pre 2008/9 boom years, but still represented among the sharpest gains in the property sector globally this year.

This week three of Dubai’s stalled projects were restarted: two in Jumeirah Lakes Towers and one in Business Bay.  They have been revived under the Dubai Land Department’s (DLD) Tanmia initiative.