Market Data

International Beat

Canada’s Big Deal

The Bank of Nova Scotia sold its landmark Toronto tower for $1.27 billion, the largest price ever paid for a Canadian office property. Dundee and H&R REITs partnered to buy the 68-story, 22-msf Scotia Plaza, which had a going-in cap rate of 5.2 percent, according to The Globe and Mail. Given that the property is 99.5 percent leased, it’s not exactly a value-add acquisition. Instead, with current rents estimated to be about 10 percent below market, the new owners will focus on rent power through lease renewals.

“Our message to the retail and real estate industry is don’t panic. Consumer-driven technology continues to advance and, contrary to widely held assumptions, multichannel retailing is actually complementing not competing with existing store networks.”

—Peter Gold, Head of Cross Border Retail EMEA, CBRE

Markets to Watch

Greece’s hotels took a beating this summer with warnings of food shortages and riots keeping visitors away from this Mediterranean paradise. Not only did 11 percent fewer tourists visit Greece in the first half of the year, they spent 12.5 percent less, according to HotelNewsNow.com. Occupancy in Greek hotels is down 5.9 percent YOY, with daily rates down 8.6 percent and revenue per available room down 14.0 percent according to STR Global. Athens was hardest hit, with occupancy falling almost 20 percent, the largest decrease in any European city. However, the silver lining may be an increase in visitors from Russia, which were up 56 percent in 2011 and 50 percent during first quarter 2012.

More than half of the world’s $141.7 billion in cross-border acquisitions in the past year took place in Europe, according to Real Capital Analytics. European property transactions by non-Europeans reached 26 percent of the total number of transactions for the first half of 2012, indicating a returning confidence in the European market. Nearly 45 percent of the acquisitions were in London and Paris, indicating investors’ preference for core risk-averse properties.

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