International Report(1)

Tel Aviv Is Newest Real Estate Hot Spot

A 320,000-square-meter property located in the heart of Tel Aviv, Israel, has foreign investors competing for the right to develop what was once the city’s wholesale fruit market. As the country’s largest development project, Tel Aviv Square is estimated to be worth about $1 billion. Attracted by the availability of Israel’s bank financing, 22 groups including real estate developers, high net worth individuals, and private equity funds from the U.S. and Europe have made it to the second round of bidding for the property.

A 53 percent jump in base rental rates from June 2007 for prime office buildings makes Moscow the world’s second most-expensive office market.

Most-Expensive Office Markets

(ranked by occupancy cost in $ psf per year)

1. London (West End) $299.54
2. Moscow $232.37
3. Tokyo (Inner Central) $220.25
4. Mumbai, India $210.97
5. Tokyo (Outer Central) $175.35
6. London (City) $164.18
7. New Delhi $145.16
8. Paris $141.98
9. Singapore $139.31
10. Dubai, United Arab Emirates $128.49

Source: CB Richard Ellis

First Industrial Goes Global

With offices already open in the Netherlands and Belgium, First Industrial Realty Trust recently increased its European presence by opening new offices in Paris and Düsseldorf, Germany. With the highest concentration of Europe’s industrial properties, both markets are recognized as central Europe’s industrial hubs. Focusing in part on value-add and redevelopment acquisitions, First Industrial plans to invest its $475 million FirstCal Industrial Europe joint venture with the California State Teachers’ Retirement System.

Czech Republic Retail Overview

The Czech Republic retail market still continues to perform well with sales increasing to 5.4 percent in February 2008 up from 4.7 percent in November 2007, according to Cushman & Wakefield. Because of the global credit crisis, retail investment was well below previous years in the first three months of 2008, and activity was minimal in 2Q08. However, across the Czech sub-sectors, prime retail rents remained stable with Brno’s annual rental growth just under 10 percent. Overall, about 200,000 square meters of shopping center space will come on line this year, which includes the 38,000-sm Arkády Pankrác, a significant investment opportunity in Prague.

Asia Pacific Key Performance Indicators

Country Retail Sales Growth (%) Industrial Production
(%)
  2008F 2009F 2008F 2009F
China 10.0 7.9 15.7 13.0
Hong Kong 5.5 3.1 0.4 -0.4
India 5.7 6.0 6.5 8.0
Malaysia 4.5 4.1 3.8 5.2
Philippines 3.7 5.3 5.5 5.5
Singapore 4.7 4.2 5.0 5.3

Source: Economist Intelligence Unit, April 2008

The Second Silicon Valley

Home of numerous factories and corporate centers, Bangalore, India, is seeing both sales prices and rental rates steadily increase, NAI Global reports. Brought on by steady economic growth in the last few quarters, by year-end, the commercial office property supply should read 17.4 million square feet. In 2007, 14.1 million sf was designated to the information technology and enabled services sectors. For the future, Bangalore’s government has approved 11 local, national, and international developers to set up large office parks in the city.