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With U.S. retailers such as Abercrombie & Fitch Co. and Gap Inc. pushing into Europe, analysts are debating a key question: Has there been enough recent development to satisfy this new demand for space?
The weak U.S. economy and worries about jobs have consumers spending less and are causing some of the biggest U.S. retailers to look abroad for growth.
According to new research by property consultants CB Richard Ellis, 1.9 million square meters (20.5 million square feet) of new shopping-center space was built in Europe in 2010, down 36% from the previous year, even after development fell 30% in 2009. Some analysts believe there is still enough supply to satisfy demand.
The outlook is better in some countries than others. According to CBRE, the development pipeline is still "considerably smaller" than in 2007 and 2008 —the most recent peak in shopping-center development. But construction starts are rising in markets such as Turkey, Russia, and Poland. There are 146 shopping centers under construction in Europe today, says CBRE, and the highest level of activity is in Europe's emerging markets.
"The shopping center development market in Turkey has sprung back to life," Neville Moss, CBRE's head of retail research in Europe, the Middle East and Africa, said in a statement.
http://online.wsj.com/article
Showing posts with label U.S. market. Show all posts
Showing posts with label U.S. market. Show all posts
Tuesday, July 19, 2011
Wednesday, July 13, 2011
Foreign Investors Often Make the Mistake of Looking at U.S. Real Estate as a Safe Haven
NNN Lease Market News
Africa Israel has struck agreements to sell a major piece of the former New York Times headquarters and the landmark Clock Tower building overlooking Madison Square Park in Manhattan, both at steep losses. It also has unloaded numerous parcels of land in Florida.
Africa Israel, headed by diamond-industry billionaire Lev Leviev, is the latest overseas company to run aground in the U.S. commercial market. In the late 1980s, Japanese investors purchased such iconic properties as Rockefeller Center and the Pebble Beach golf resort, only to suffer losses during the early 1990s recession.
Foreign investors often make the mistake of looking at U.S. real estate as a safe haven. "The U.S. market is one of the most transparent, the government is stable and foreigners often invest with a long-term horizon," said Mark Edelstein, head of the real-estate group at law firm Morrison & Foerster LLP. "The problem is they often buy near the top of the market and overpay."
In 1997, Mr. Leviev purchased a controlling interest in Africa Israel, a public property-investment company founded in 1934 by Jewish investors from South Africa. Under his leadership the company expanded into new markets like the Philippines and Russia, where Mr. Leviev developed a friendship with Vladimir Putin, now the country's prime minister. Projects developed by the company's Russian arm include AFIMall City, a giant retail complex in Moscow that opened in May after delays.
During the late stages of the U.S. real-estate boom, Africa Israel began making highly leveraged bets in big cities. Unlike many foreign investors, which tend to buy stabilized properties with solid cash flows, Africa Israel made highly speculative bets, buying up empty tracts of land and trying to convert office buildings to condos. It issued bonds in the Israeli market to finance much of the buying, racking up debt of 7.8 billion shekels by the end of 2009.
Craig Karmin at craig.karmin@wsj.com
Africa Israel has struck agreements to sell a major piece of the former New York Times headquarters and the landmark Clock Tower building overlooking Madison Square Park in Manhattan, both at steep losses. It also has unloaded numerous parcels of land in Florida.
Africa Israel, headed by diamond-industry billionaire Lev Leviev, is the latest overseas company to run aground in the U.S. commercial market. In the late 1980s, Japanese investors purchased such iconic properties as Rockefeller Center and the Pebble Beach golf resort, only to suffer losses during the early 1990s recession.
Foreign investors often make the mistake of looking at U.S. real estate as a safe haven. "The U.S. market is one of the most transparent, the government is stable and foreigners often invest with a long-term horizon," said Mark Edelstein, head of the real-estate group at law firm Morrison & Foerster LLP. "The problem is they often buy near the top of the market and overpay."
In 1997, Mr. Leviev purchased a controlling interest in Africa Israel, a public property-investment company founded in 1934 by Jewish investors from South Africa. Under his leadership the company expanded into new markets like the Philippines and Russia, where Mr. Leviev developed a friendship with Vladimir Putin, now the country's prime minister. Projects developed by the company's Russian arm include AFIMall City, a giant retail complex in Moscow that opened in May after delays.
During the late stages of the U.S. real-estate boom, Africa Israel began making highly leveraged bets in big cities. Unlike many foreign investors, which tend to buy stabilized properties with solid cash flows, Africa Israel made highly speculative bets, buying up empty tracts of land and trying to convert office buildings to condos. It issued bonds in the Israeli market to finance much of the buying, racking up debt of 7.8 billion shekels by the end of 2009.
Craig Karmin at craig.karmin@wsj.com
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