It is Spring again! After months of gloomy and straighforward bad news – on the financial sector, on the stockmarkets, on housing markets and commercial property markets and on the economy in general – it looks like some positivism is coming back to the play. I’m not saying that bad times are over, as I believe the recession may continue for another 18 months or so. Also, I do not believe that banks are lending at the levels that we have been used to.
What I have noticed over the last few weeks when following the real estate news, is that it looks like investors are returning to the property market. Attracted by high net yields (Savills’, William Newsom: Yields of 6.25% and 7.5% in London are an absolute steal), low interest rates, investors may regain some confidence that now may be a good time to re-enter the real estate market.
It is just a hypotesis. Let’s see about some backing for this. It may as well be that I a suffering from a bull bias, or that the springtime got to me. Well, lets look at some facts…
Some headlines of news items over the past two to three weeks that had a positive rather than a negative angle on investing in real estate:
- Sovereign Land to raise £300m for UK shopping centre fund
- Quantum to invest EUR 300m in the next 2 years
- GOEFs (German Open Ended Funds) see EUR 800m inflows in January
- Hochtief Development introduces a new residential project
- DEGI reveals €1.7 billion invested in property in 2008
- Dutch ECC Group ready to launch Promenada Shopping Centers in South-East Asia
- AEW Europe seals second UK shed deal
- US building sector rebounds
- Libya eyes more property in west
- Work starts today on Shard site
- East Capital launches special situations fund
- Balkimo introduces first SEE distressed property fund
- DIC Asset predicts 2009 operating profit of EUR 34-36m
- Resilient Derwent out-performs the sector
- Russians return to London
- Housing starts unexpectedly surge
- Norway to pour oil billions into UK commercial property
- U.K. Housing Market May Show ‘Green Shoots,’ [hah, green shoots at the beginning of spring, nice!]
- Palmer and GVA call market nadir
- Pidgley calls bottom of the house market
- Anthony Bolton (Fidelity Int.) calls bottom of the market – again
- Obama calls the bottom
Ok, quite a list. But I admit, it may look like a meagre result, bearing in mind that there have been maybe hunreds of news items to pick from. So I guess it is more a gut feeling (of which I will keep track in the next couple of weeks: I may be right after all…). Nevertheless, I’m calling the bottom. Let’s see.
On A Peppercorn 
Let us know about your experiences in China. If China “holds” and averts a vicious and destructive downcycle, we may be able to do so too. However, as far as I am concerned: “All bets are off”. No one in living history has any experience in a crisis of a global scale like this. And if the brightest minds couldn’t keep it from happening, I surely don’t trust policy makers make things worse by throwing bucketloads of money around.
I do agree with seeing some green shoots. “The second derivative of sentiment is … slowing.” (i.e. not declining yet).
Asset allocation suggestions: long real Asian estate in 2012?
xaipe
Maarten