Market Data

International Beat

Russia's Big Deal

More proof that a well-located retail center can always command top dollar: A Morgan Stanley real estate fund has agreed to buy the largest mall in St. Petersburg, Russia, for $1.1 billion, from Meridian Capital, according to Bloomberg News. Built for $380 million and opened in November 2010, the 1 msf Galeria contains five floors, with 250 shops, a movie multiplex, bowling alley, and underground parking. The mall is located next to the train station with direct connections to Moscow. Rising wages and consumer spending are fueling a boom in Russian malls, as international brands enter the country looking for space. Russia has about 80 sm of mall space per 1,000 people, compared with the EU average of 240 sm.

Mexico/Caribbean Hotel Pipeline

  • 2011: 32 hotels (4,886 rooms)
  • 2012F: 59 hotels (7,424 rooms)

Source: STR

"By [2011] year-end, commercial property values in the Irish market had declined by as much as 65 percent from peak levels. … We anticipate that decline … will come to an end in 2012 and we will see a small positive total return being achieved in the Irish market for the first time since 2008."

—Marie Hunt, executive director, CBRE, Ireland

Markets to Watch

  • Transaction activity doubled in Eastern European property markets last year, hitting €6.1 billion, more than twice 2010's activity level of €2.9 billion, according to Cushman & Wakefield. Retail and office properties dominated sales, at 40 percent and 37 percent respectively, with industrial garnering 15 percent of sales. Poland and the Czech Republic were the favored markets and will continue that role this year. C&W forecasts €5 billion in sales by year-end.
  • Investors hope that the London Summer Olympics will give the U.K. markets a much-needed boost of confidence and cash, according to Jones Lang LaSalle-UK. Office employment is improving slowly, and a lack of quality product will help give a modest increase to rents this year in the office sector. In addition, the residential market is attracting attention and cash from Italians and Greeks looking for safe haven outside their own troubled economies, says IBTimes.com.

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