International Beat(15)

Markets to Watch

  • Japan – The highest rates reported since December 2004, vacancy rates for class A and class S (class A landmark properties) in Tokyo rose to 3.5 percent and 6.0 percent, respectively, in 4Q08, reports CB Richard Ellis. The class S increase was primarily due to the addition of one new building to the city’s inventory. Overall, about 30 percent of the 121 class A and class S buildings had vacancies as of 4Q08.
  • Singapore - Giving into the pressure of the global economic crisis, Singapore’s CBD office rents registered a 17.9 percent quarter-over-quarter decline in 4Q08, finishing the quarter at $7.73 (USD) per square foot per month, according to Colliers International. For the remainder of 2009, CBD office rents are expected to decline around 30 percent.
  • Abu Dhabi, United Arab Emirates – The office sector experienced a somewhat subdued rental market in 4Q08, with prime office rental rates declining by 25 percent, according to CB Richard Ellis. However, despite an activity slowdown, the market still saw a 30 percent year-over-year rental growth in 2008. For 2009, developers are expected to proceed with caution, concentrating on higher-quality projects.
  • Lithuania – With 140,000 square meters of warehouse space coming on line, 2008 was a rather active year for the country, according to the Baltic Property Market Report compiled by Lawin, PricewaterhouseCoopers, Re & Solution, and Jones Lang LaSalle. Currently, 570,000 sm of warehouse and logistics space is located in Lithuania with 52 percent in Vilnius and 33 percent in Kaunas. Overall, rentals should remain static for the next two to three years.


Germany Becomes Newest Hospitality Hub

[insert image: 2International.Berlin]
[photo credits: eyeNAVPty, VR National,, VFM Interactive]
[caption: Holiday Inn Berlin City Centre, Potsdamer Platz]
Putting all its eggs in one basket, Foremost Hospitality GmbH has committed to building 20 Holiday Inn & Hp;iday Inn Express properties in Germany by 2016, reports Focusing on large cities such as Berlin, Frankfurt, Hamburg, and Munich, Foremost sees that Germany as a strong home for the midscale without food and beverage hotel sector based on its robust performance in 2008. Last year, the sector’s average daily rate increased by 5.1 percent with revenue per available room increasing by 3.6 percent year-over-year, according to STR Global. Currently, seven hotel contracts are signed with development under way, reports IHG. The 150-room Holiday Inn Express Berlin City Centre/Alexanderplatz is scheduled to open in March 2010, and the 328-room Holiday Inn Berlin City Centre/Potsdamer Platz is slated for completion in March 2011.


European Prime Retail Rents

Market             2008 prime retail rent (€ per square meter)    2007 prime retail rent (€ per square meter)      
Vienna, Austria 2,400   2,040      
Paris        10,000  9,500      
Rome         2,700 2,400      
Moscow    3,150   2,750      
Barcelona, Spain      2,650 2,160      
London    8,850  8,350     
Source: King Sturge


Asia Pacific Construction Pipeline, 4Q08

Country    4Q08
Projects     Rooms    2Q08
Projects     Rooms      
China    938    257,143    1,240    323,956      
India    462    78,140    470    76,304      
Southeast Asia    339    76,706    369    81,032      
All others    152    25,385    147    25,354      
Total pipeline    1,891    437,374    2,226    506,646     
Source: Lodging Econometrics


Outlet Centre Comes to Moscow

Partnering with GVA Sawyer, a Moscow development company, Fashion House Development has completed the acquisition of itsfirst outlet plot in Russia. “Currently, Russia has no outlets and yet there is a potential for at least 20 based on population brand awareness, and potential spend[ing],” says Brendon O’Reilly, director of GVA Grimley Outlet Services and Fashion House Development. The outlet is located next to the Sheremetyevo International Airport on a highway connecting Moscow and St. Petersburg.


South Korea’s New Cultural Complex

A $315 million cultural complex in the Songdo International Business District off the coast of Incheon, South Korea, broke ground in September 2008, reports PR Newswire. A 70/30 joint venture between Gale International and Posco Engineering & Construction, the 603,000-sf complex will encompass a 1,800-seat concert hall, a 500-seat multipurpose hall, a 1,400-seat opera house, the Asia Museum of Contemporary Art, a music school, a design school, dormitories, and a library. The complex is part of the 1.2 million-sf IFEZ Arts Center, which includes $603 million in residential, retail, and medical facilities on 592,000 sf and is slated for completion in 2012.