Price per square foot can be an interesting approach to pricing real estate and we though it would be interesting to compare luxury condominium prices around the world to other types of space for sale. How much space in a luxury condominium would you get for £100,000? These prices are based on Knight Frank’s annual wealth report 2007 and may have changed slightly since then. These are the top ten contenders.

1. London

London currently tops the list. £100,000 buys you 43.5 square feet. Coincidentally, this is exactly the same footprint as the Ford Escape, an American SUV. So you can rest assured you will be able to park the car at this price.

Read the rest of this entry »

Victoria Park Apartments Moscow[Photo credits to Miraluz06 on Flickr]

Moscow News has published an interesting snapshot of Moscow’s residential property market, both the for sale and for rent. The key observation seems to be that letting agencies are assuming an increasingly important role in the rental market and that the higher end of the market is becoming proportionately more important. The vital ingredient that agencies bring to the process is ensuring that all the properties on their books are available with legally binding rental agreements. Going down this route has the obvious advantages of protecting the unwary foreigner from abrupt evictions or rent rises.

There’s no disputing that Moscow is an expensive place to live. The Mercer cost of living survey in this spring placed the city in top place with a cost of living that was over a third higher than New York City’s. Naturally, costs of accommodation are an important feature of this and at the beginning of the year Moscow was sixth most expensive European capital in terms of purchase costs and fifth highest in terms of rental and rental yield. Renaissance Capital estimate that Moscow’s residential property prices have averaged a 90% rise in the 12 months to 2nd Quarter 2007 and forecasts that the rises will continue, all-be-it at the more sedate level of 16 to 11% a year through 2007 and the succeeding three years (read report here (pdf)). However, the latest statistics taken from Global Property Guide: suggest that by May this year rental yields were on the way down, from above 8% to between 4.5 and 6%. Rentals have been failing to keep up with purchase prices, particularly at the higher end of the market. One reason for this is the competitiveness of mortgage rates. Low interest rates should fuel the rise in residential prices.*
Read the rest of this entry »

Kiev Ukraine - Place de l’Indépendance [Photo credits to Panoramas on Flickr]

Some might ask if ‘coming of age’ was a good thing as far as property investors are concerned; the answer is probably ‘yes’. Ewan McGarrie of propertyinvestment.co.uk recently described the East European city centre market as ‘large and stable’ and particularly highlighted Budapest as a stable residential market with good capital appreciation prospects. Yesterday we juxtaposed the possibilities of much smaller Zagreb with Croatia’s Adriatic coastline and made the point that Zagreb, as the capital city, is drawing in the country’s professional ‘cadres’. However, there is a bigger story to tell in the dynamic economic prospects of Eastern Europe, which have been largely overshadowed by commentators concentrating on the BRIC (Brazil, Russia, India, China) economies. Unlike Russia and China, East European businesses are well placed for attracting the profitable, well-paid (development and marketing) ends of the “smiley curve” as well as the less remunerative manufacturing.
Read the rest of this entry »

Britons are travelling farther to work, on job assignments to Moscow or Budapest. Lucia Adams looks at their housing needs
EASTERN Europeans are here in a big way, we all know, but what is less apparent is that they are part of a two-way traffic: Britons are heading east for holidays and to find holiday homes — and also to work. We hop on a cheap flight to Tallinn, Warsaw or Budapest and scour the emerging property markets, buying homes just about anywhere we can place on a map. But is there money to be made? Are holiday lets in Poland ever going to be all the rage? Or might letting to expats on overseas assignments in Russia be a good bet? Britons are becoming more itinerant and there is growing demand for rentals in areas where blue-chip companies have set up shop. For buy-to-let investors who want to invest in Central and Eastern Europe, but who do not want to get involved in holiday lets, focusing on the corporate market can be a good proposition. According to a PriceWaterhouseCoopers study of trends in 2004-05, 42 per cent of 203 companies surveyed forecast growth in short-term assignments in Central and Eastern Europe. In a separate report by Pricoa Relocation in 2005, more than 40 per cent of companies questioned expected to send their staff on short-term assignments to the Czech Republic, Hungary, Poland, and Russia (see the above chart). For those on assignment, finding good-quality rentals in cities often still full of soulless, Soviet-style workers’ housing blocks can be a challenge.

Darren Dyer, who moved to Moscow as a merchandising manager with the Kingfisher DIY retail chain Castorama, says: “There are a lot of big companies coming to Moscow who want to look after the welfare of their people. But there just aren’t the places available; there is more demand than supply of properties that Westerners would be prepared to live in.”

Having relocated with his wife, Michelle, and son Cameron, 8, the family were keen to live in a gated expat community near the Anglo-American school. They were told that there was a year-long waiting list, and the minimum $7,000 (£3,750) monthly rent was higher than Darren’s accommodation allowance.

They settled instead for a three-bedroom apartment in a secure block that they rented for $5,000 a month. It was a far cry from the rural Dorset home that they left behind. Darren says: “We had never lived in an apartment — for the first six months there were no children for Cameron to play with.” Noisy building work in the block and a rent increase to $6,500 after a year prompted the family to start hunting again. This time they found a three-bedroom townhouse in the much-desired location of Pokrovsky Hills. But it wasn’t cheap. Darren says: “Rent is $8,500 month. We had to put up a $10,000 deposit and pay six months in advance.”

Liam Bailey, of Knight Frank, says that Moscow’s popularity among big European and American companies has created competition for topnotch homes, although many investors are frightened of buying there.

Other hot spots in Central and Eastern Europe include Slovakia, Bulgaria and Romania, which are on course to join the European Union next year, and the Baltic states, according to Savills. Agents in those countries say that house prices are rising by 30 per cent or more a year. In larger and more developed residential markets such as the Czech Republic, Poland and Hungary, price rises, though substantial, have been more moderate. But the demand for top-quality homes can be just as keen.

Campbell and Kirsteen Macfarlane moved from Scotland to Budapest in January for a two-year assignment with BT Global Services — Kirsteen as a bid manager, and Campbell as a sales director for Eastern Europe and Russia. Although they enlisted the help of the relocation company Inter Relocation (00361 2785680, www.interrelo.com) they had to view 35 properties before finding the right home.

They now rent a three-bedroom detached house with a swimming pool in District 2, a 20-minute drive from their office, for €2,400 (£1,630) a month (negotiated down from €3,200). Kirsteen says: “There is a massive variety in quality. Expats tend to live in certain districts — people tend to clump together either near the centre or near English-speaking schools. Americans and the French have reinvigorated this area and made it more popular.”

For the intrepid investor hoping to let to corporate employees, Charles Weston-Baker, of Savills, points to the expanding business communities in Sofia, Prague and Cracow. He says, however, that returns vary considerably, and that the quality of property must be exemplary in specification and location. “Gross yields are 5 to 10 per cent and occasionally more. With capital appreciation, we always say: be realistic. Say 5 per cent but often it can be 10 or 15 per cent. Prices can go up as well as down in value.”

Source: Timesonline

Related links:

• Eastern Europe property investment: a three-tier approach
• Knight Frank Russia

Technorati Tags:

• Property Eastern Europe
• Property Russia
• Real Estate Russia

NEW YORK, Sept 12 (Reuters) - Morgan Stanley Real Estate, a division of investment bank Morgan Stanley on Tuesday said its Special Situations Fund III has raised $2.24 billion of equity to invest primarily in real estate debt and equity securities around the world.

The buying power of the fund could double depending upon the level of debt the fund will use along with its equity, said John Carrafiell, managing director and global co-head of Morgan Stanley Real Estate.

The fund will invest predominately in public or private debt and equity securities that are based on the performance of real estate assets. However the fund is not precluded from acquiring minority interests in physical real estate assets, Carrafiell said.

The fund also could invest in real estate derivatives as a hedging device.

“In that sense, we will look at derivatives to protect our return,” he said.

Investors include institutional and Morgan Stanley Global Wealth Management investors from North America, Europe, the Middle East and Asia as well as Morgan Stanley, which invested 25 percent of the total initial equity raised.

“Special Situations targets investments in market-leading real estate companies in growth and developed markets with high barriers to entry where investors often find it difficult to access deal flow, including China, India, Russia and Central/Eastern Europe where we have already deployed significant capital,” Carrafiell said.

The fund will also invest in developed markets such as Japan, the United Kingdom, Western Europe, the United States, Hong Kong and Korea where corporate and financial restructuring opportunities exist and where the private markets value real estate higher than the public markets.

“We’re looking for above-average risk adjusted returns, based on the market, the transaction and the asset we’re investing in,” he said. “The interesting thing about this fund versus a pure opportunistic fund is that it does not have a single point-return target.”

In that way, the fund will offer investors more of a portfolio-like exposure to risk, as it includes various investments that not only carry differing degrees of risk, but also react differently and sometimes opposite to different market and economic conditions. This helps mitigate risk while boosting or protecting returns.

The fund is the third in a series of successful real estate funds. Special Situations I, which is fully liquidated, launched in 1997 and invested primarily in the United States and Asia. Special Situations II launched in 2000 and invested solely in Europe

.Source: Reuters

Related links:

• Real Estate private equity to hit fund raising record (REUTER’S news article)
• Morgan Stanley Real Estate
• KPMG Real Estate Funds

The Black Sea Resort of Sochi Hopes to Gain a Wider Audience

During the Soviet era, the Black Sea resort of Sochi was synonymous with summer recreation – a retreat for everyone from high-placed officials to numerous vacationers from across the Socialist bloc. Fifteen years into Russia’s makeover, the town is still trying to rebound from decline and the inept management of regional infrastructure. Now, local and federal authorities are striving to remake the place into a first-rate year-round international resort while also bolstering its standing as Russia’s undisputed summer capital. With over three million annual visitors, Sochi may finally be outperforming its main competitor, Ukraine’s Crimea, but it can hardly match the combination of sensible prices and competent service found in European resorts. Still, the intrinsic appeal of the area’s exquisite scenery, coupled with a commitment to a sustained and systemic overhaul, bode well for Sochi’s revival.

rest of story here