Commercial property people

2010 appears to be starting with a healthy dollop of optimism within commercial property circles – of course only time will tell whether that optimism is well placed or not.  Let’s at least hope that I’m not blogging in Week 1 of 2011 hoping that things will improve from a parlous state.  So here is my weekly dose of the property stories that I’ve found most interesting.

Burj Dubai Unveiled

Sheikh Mohammed bin Rashid al- Maktoum, Dubai’s ruler,  celebrated this week with a global milestone he can be proud of- the tallest building on the planet. The £1 billion Burj Dubai is at least 2,717ft from its base to the tip of its spire — that’s more than half a mile, the equivalent of three-and-a-half Canary Wharf towers or two Empire State buildings stacked up. The tower (now known as Burj Khalifa) is more than 1,000ft higher than its nearest inhabited rival, Taiwan’s 1,671ft Taipei 101. It is also the tallest man-made structure in the world, surpassing the 2,063ft KVLY-TV mast in North Dakota, America.  The steel-ribbed, glass-clad structure looks like a giant hypodermic needle piercing the desert sky. As the 169-floor building rises, it passes through several climatic zones. The temperature at the top is up to 10C cooler than at the bottom.  It has the highest swimming pool in the world, on the 76th floor, and the most elevated place of worship with plans for a mosque on the 158th floor.  Its Y-shaped plan – three wings extending from a central core, like the roots of a tree – “confuses the wind”, in the architects’ words, while the core stops the wings from twisting (which would give top-floor occupants nausea). For super-tall buildings – and surely there will be more, one day – this “buttressed core” design is likely to become the prevailing form.

King Sturge Predict “Boom” in 2010!

2010 will be a boom year for commercial property investment with the best returns for four years, according to Angus McIntosh, Head of Research at King Sturge. He cautioned, however, that the boom year may be a false dawn. ‘Total returns may well stay positive but capital values may fall again by 2012,’ he said.  McIntosh believes commercial occupational markets across Europe will remain soft for two-five years, with rents continuing to fall. ‘Take-up of office space (as with others including industrial and retail space) will be very selective over the next year or two. Lack of demand for space in both the private and public sectors will result in very few new development projects for two-five years.

A Dash of Optimism from CBRE

CB Richard Ellis expects investment activity in the European commercial real estate market to total some EUR 60 bn in 2009, around half of 2008’s total. In the first three quarters of 2009, the company registered around EUR 41 bn of investment deals with a steady increase in activity each quarter since the low of EUR 12 bn in the first three months of the year. ‘We expect that this will continue, with Q4 seeing the highest level of activity for the year,’ the adviser said in a preview of its forthcoming report ‘ After the Storm: Where Next for European Property?’  CBRE  expects that the steady improvement that has been seen throughout 2009 will continue in 2010 with higher levels of activity expected in the year as a whole. ‘The recent upturn in investment activity suggests that many investors believe the European market is approaching the bottom of the cycle; and in some cases, it may well be past that point,’ said Michael Haddock, Director, EMEA Capital Markets Research, CBRE.

Gerald Eve Report a Not Too Bad Year

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