International Report(2)

Taiwan Offers Potential

Taipei, the capital city of Taiwan, may be a good bet for property investors, according to the Wall Street Journal. The Nationalist Party’s victory in the presidential election has sparked a boom in real estate values. Taipei’s high-end apartment prices have risen more than 50 percent to about $1,369 psf, as the new president, Ma Ying-jeou, pledges to open Taiwan’s markets to mainland Chinese investors. In addition, as Taiwan businesses expand and more multinational companies locate there, class A office space demand will increase. Current CBD vacancy is around 4 percent.

Bawadi, a $27 billion retail and hospitality center under construction outside of Dubai, will have the world’s largest concentration of hotels.

Middle East Hailed as Hospitality Mecca

With some 830 hotels under development adding 750,000 rooms in the next 12 years, the Middle East is poised to become a global hot spot for the hospitality industry, according to the fourth Arabian Hotel Investment Conference held in Dubai in May. HVS Managing Director Russell Kett noted that 90,000 rooms were under development in Dubai, along with 60,000 in Bawadi, an adjacent tourism center, while 10,000 were planned for Saudi Arabia and Oman, 11,000 in Qatar, 7,000 in Jordan, 13,000 in Egypt, 6,000 in Bahrain, and 3,000 in Kuwait. More than $3.6 trillion is being invested in hotel projects, as more than 170 million people are expected to visit the area by 2020. Currently the region has a 70 percent occupancy rate and revenues per available room rose 20 percent last year from $96 to $111. Experts forecast a slight correction on growth rates in the next two years as supply temporarily outstrips demand. Another problem facing hotel operators is the lack of adequately trained staff, which some brands are remedying by developing vocational and training institutes.   

Global Gas Taxes

While Americans complain about rising gas taxes and politicians promise gas-tax holidays, the U.S. gas tax is substantially lower than other industrialized nations.

Country Tax per gallon
U.S. 40 cents
Italy $4.43
France $4.60
Belgium $4.83
United Kingdom $4.93
Germany $4.90
Netherlands $5.06

Source: Energy Information Agency

Infrastructure Ideas Abound Worldwide

The U.S. needs to “rethink accepted land-use models which led to rampant suburban growth during the last half century” and look to China and other growing countries for ideas on how to finance a massive infrastructure overhaul, according to “Infrastructure 2008: A Competitive Advantage,” released by the Urban Land Institute and Ernst & Young. Citing investment and development of highways, ports, and airports as crucial to continued U.S. dominance in the world marketplace, the report offers examples from China, which leads the world in infrastructure spending to the tune of $150 billion annually. Unable to sustain this pace by government funds alone, China’s government creates corporations to manage projects and is a shareholder in the corporations along with private investors and local governments. The corporations are then taken public, and China uses the funds for other projects. For example, the China Railway’s IPO raised $3 billion in 2007. Australia and several European countries also use other forms of public-private partnerships to finance infrastructure improvements. It is estimated that 15 percent of European infrastructure projects are financed through public-private partnerships.

ProLogis Ramps Up International Expansion

Industrial real estate giant ProLogis has announced several international transactions this year. The company completed its first lease transaction in Rome, leasing 327,000 sf of space in Park Anagni to Coop Italia, a major Italian grocery chain. The company is looking for more acquisitions in southern Rome and hopes to develop a second industrial park there.

The company also has started construction of a 1.2 million-sf industrial park in Zama, Japan, a logistics hub that serves Tokyo. Also in the Far East, ProLogis has acquired a 889,000 sf of industrial space in three South Korea cities for a total acquisition price of $86.3 million. And finally, the company is developing an 860,000-sf warehouse in Zaragoza, Spain, which it will lease to Bosch-Siemens Home Appliances.