International Report(3)

Top 5 International Retail Markets

Country % of International retailers present
United Kingdom 55
Spain 51
France 49
Germany 47
Italy 45

Source: CB Richard Ellis

Emerging Markets on Top

Real estate investment returns in markets such as Istanbul and Moscow may surpass western European cities such as Paris and London, according to a survey of international markets by the Urban Land Institute and PriceWaterhouseCoopers. This is the first year London has not been ranked among the top 10 cities for investment, caused by the biggest drop in commercial real estate property prices in 17 years. Moscow topped the list, driven by Russia’s 7 percent growth rate as well as its title as the world’s largest energy exporter. However, investors also ranked Moscow as one of the world’s riskiest cities for commercial investment.

Commercial Real Estate Investment and Development Prospects

City 2008 Ranking 2007 Ranking
Moscow 1 18
Istanbul 2 11
Hamburg 3 9
Munich 4 4
Paris 5 1
Lyon 6 5
Frankfurt 7 27
Stockholm 8 3
Berlin 9 25
Helsinki 10 6

High-end mixed-use development has found its way to Krakow, Poland, when the Bonarka City Center broke ground earlier this year on a former industrial site. The first stage containing retail, entertainment, and service components will cost around €3oo million to construct. Phase two and three will contain office and residential towers. One of Europe’s biggest redevelopment projects, the entire development will cost around €500 million.

European Industrial Rents

Prime warehouse rents

Market Warehouse rent ($psf/yr)
London 27.64
Oslo, Norway 17.10
Zagreb, Croatia 11.48
Athens, Greece 10.66
Lodz, Poland 4.92

Source: Colliers

Asian Retail Snapshot

Retail district Location Rent (U.S.$psf per month) Year Over Year % Change (in local currency)
Causeway Bay Hong Kong 106.83 10.2
Ginza Tokyo 73.44 50
Pitt Street Mall Sydney, Aus. 42.50 12.7
Gangnam Stations Seoul, Korea 36.47 11.5
Orchard Road Singapore 28.95 7.5

Source: Cushman & Wakefield

Anheuser-Busch’s Busch Entertainment Corp. will build the first non-U.S. Worlds of Discovery theme park on The Palm Jebel Ali, the world’s largest artificially created island now being constructed off the coast of Dubai. The phased project will include SeaWorld, Aquatica, Busch Gardens, and Discovery Cove, with the first phase scheduled to open in 2012. The company is partnering with Dubai company Nakheel, which is developing three Palm islands into residential, commercial, and entertainment destinations for the growing Middle Eastern tourist trade.

India Offers Advantages Over China

Although India and China both compete for world attention with their fast-growing economies, India offers advantages over China to potential real estate investors, according to a Multi-Housing News article. India’s growth is based on home-grown consumption by a burgeoning middle class, whereas China’s growth is mainly export-driven, based on its ability to sell products to other countries, mainly the United States. Second, India’s growth is market-led versus China’s government-led growth. India has many market functions already in place, such as accounting rules, legal systems, and banking and financial services. It also has started the process of deregulation, which is reducing barriers to direct foreign investment. Finally, India’s growth is largely based on private consumption -– 60 percent compared to China’s 40 percent. In China, a large part of growth is being driven by infrastructure improvements such as building roads and ports. Private consumption is a key driver of real estate demand and thus an important component of gauging a country’s appetite for commercial real estate.