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- Jones Lang LaSalle Predicts $550 billion in Worldwide Real Estate Investment Volume for '05
- Amsterdam Desireable Location for U.S. Company Expansion
- Mega Malls No Longer Symbol of All That's Wrong with America
- Targeting U.K. Buyers
- Second Home Sales/Resort Resources from NAR
- State Department Profiles European Union
- Making Sense of Timezone Alphabet Soup
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U.S. Investors spent more than $12 billion on real estate outside the country in the first six months of 2005, representing a 28% increase in volume compared to the same period in 2004, and topping the $9 billion flowing into the country from outside the borders, according to a Jones Lang LaSalle report, "Global Real Estate Capital–The Search For Opportunity Intensifies." Worldwide direct real estate investment totalled $237 billion in the first half of 2005, an 18% increase over the same period in 2004. North America was the dominant source of global capital, accounting for 53% of all transactions. The global real estate services and money management firm forecasts an all-time record of approximately $550 billion in worldwide investment for 2005, up 20% from 2004. While 2005 may prove to be a record year, economists warn that investment into the U.S. cannot continue at the current rate, which has been offsetting record high trade deficits. If foreign investors were to sour on the U.S. and unload their holdings, the prices of U.S. stocks and bonds could plunge, and mortgage interest rates soar. Federal Reserve Chair Alan Greenspan doesn't think this will happen, but in a Nov. 14, 2005 speech, he noted that the trade deficits cannot persist indefinitely.
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U.S. firms have a growing number of cities from which to choose from when contemplating expansion into Europe. London and Paris, once the overwhelming choices, now compete with other European cities, including former Soviet bloc cities. A recent article in Expansion Management identified Amsterdam as a desirable expansion location due to its highly skilled international and multilingual work force, good accessibility and infrastructure, and strategic location for serving the E.U. and well as Central and Eastern Europe, the Middle East and Africa. Expansion Management reports that the Amsterdam area represents a good quality of life and pro-business environment. An familiarity of Dutch corporate tax laws is useful for REALTORS® advising clients on expansion, many of which are very favorable to foreign corporations. Tax Consultants International offers a primer on Dutch Tax law, and proposed changes to the tax law for 2006 are available from Fisconti Tax Consulting. Prague, Czech Republic and Hanover, Germany are also profiled in the Expansion Management article.
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One of America's chief exports--shopping malls--have long been a symbol of convenience and excess and, for some, what's wrong with the U.S. Love them or hate them, mega malls can now be found in unlikely global settings, such as Mombasa Road leading into Nairobi where four new malls sit with three more in the works. India sports 45 malls, up from just three in 1999 with the number projected to grow to 300 by 2010. The Kingdom Centre in Riyadh, Saudi Arabia devotes an entire floor—Women's Kingdom—exclusively to female customers. In a country where women may not shed their veils in public, yet won't buy what they can't try on, the floor is critical to the mall's success. Here Saudi women shop, dine, or even visit a spa, all without violating the country's Islamic laws. Dubai clocked 88.5 million mall visitors last year, and nearly 180 million Brazilians visit shopping arcades each month—almost as many as in the U.S. China leads the pack, however, where foreign investors are scrambling to get a piece of a real-estate boom driven in part by mall mania, according to a recent Newsweek article. "The same energy and dynamism that the shopping industry brought to North America 30, 40 years ago is now reaching overseas," said Michael Kercheval, head of the International Council of Shopping Centers (ICSC). REALTORS® with investors interested in getting a piece of the shopping mall pie, can find a variety of resources at the ICSC international home page, including research, statistics, and country reports from members of the ICSC Worldwide Commission.
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North American real estate professionals targeting U.K. buyers might be interested in the publication "Everything America," which focuses on property and travel in America, Canada and the Caribbean. Published bimonthly, the glossy magazine provides potential marketing and advertising opportunities for firms specifically targeting U.K. buyers. (The Dec./Jan. issue is full of Florida-based property and real estate company ads targeting readers of the feature story on Florida Golf Villas.) Articles are not limited to the obvious inbound markets. This issue also included articles on Why Brits live in Kansas City, the attraction of New Mexico property, and investment opportunities on Canada's Mont Tremblant. U.S. readers may find the view on U.S. lifestyle from across the pond interesting, but more importantly, helpful in understanding the thinking of prospective buyers. One nice find was in a guide on relocating to America in which a "REALTOR®" was clearly distinguished from a "real estate broker." Subscribe online or visit their website for more information (as of press time, portions of the web site were still under construction).
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Second homes sales accounted for 36% of all U.S. residential sales in 2004, according to NAR's 2005 Profile of Second-Home Buyers. According to NAR Chief Economist David Lereah, the overall market should be a very healthy for the next 5 to 10 years, and " by and large, the second-home market is healthier than the primary-home market." More than 10% of NAR members specialize in this niche, prompting the Jan. '06 launch of new NAR certification: Resort & Second-Home Property Specialist (RSPS). Fueling this market are baby boomers with equity in their primary residences; demand from foreign buyers; and easier financing. Although the distance between a buyer's primary residence and second home is typically relatively small, this data fails to tell the whole story. A growing number of foreign buyers are taking advantage of a weaker dollar, and U.S. buyers find the dollar buys more in Latin America and Eastern Europe. Ron Acker, CIPS, cited in the Dec. 4 Charleston Post & Courier (S.C.) said that in his Orlando, Fla. market, British buyers spend $200K to $400K for houses, renting them out 11 months of the year or more to other Britons. The U.S. has growing competition for these buyers. Panama and Costa Rica are trying to lure British second-home investors from Florida. Acker noted these groups were well-represented at the NAR convention, looking to set up cooperative deals with agents from the U.K. and U.S. On the outbound side, Mexico is the biggest draw for Americans because, according to AARP magazine, "for $600 a month, retirees can live in a three-bedroom home with a gardener." Effectively handling the foreign second home market takes an understanding of the cultural nuances of other markets. "When the second home can be as near as 50 miles or as far away as 5,000 from the primary residence, knowing the market is critical to an agent's success, said resort specialist Maire Rosol, CIPS, of Park City, Utah, who was also quoted in the Post & Courier article. Access more information on the resort and second home market.
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International real estate specialists are likely to be very familiar with the U.S. State Department country profiles/facts sheets, widely used for obtaining information on everything from geography to demographics to political stability and foreign relations. A similar profile is now available for the European Union, which provides an overview of the region, including history, major institutions, U.S./E.U. relations and trade and economic policies. The profile links to individual E.U. member state profiles. Also available is a link to recent news items pertaining to U.S./E.U. relations. A handy reference for working with clients with a broad interest in European investments and/or investors.
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A foreign clients e-mails you to arrange a telephone call at 14:00 WET. Confused? Don't let your client know. WET stand for Western European Time, as you can learn at www.worldtimezone.com. In addition to a list of time zone abbreviations, the site provides other handy tools, including a current time chart for hundreds of cities worldwide. Choose from a standard list, capitals, or for select a region (accessible from other views) for a more narrow list of cities. Includes an international call planner tool to ensure all parties in a transaction know when to expect a call.
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Report compiled by NAR International Operations, narglobe@realtors.org.
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Intl. Web Site of the Month: Colorado Association of REALTORS® (see 'Intl. Info' on the Public tab)
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Upcoming Intl. Events
 | CRS Sell-a-bration / Feb 9-11 / San Antonio, TX, USA |
| Panama Spectacular 2006 / March 13-17 / Playa Bonita, Panama |
| MIPIM Commercial Property Mktg. Show / March 14-17 / Cannes, France |
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Featured CIPS Course
Travel to Chicago and enjoy post-holiday sale shopping in conjunction with. . . International Real Estate for Local Markets, January 25-26, 2006, Northbrook, Illinois / Sponsor: North Shore-Barrington Association of REALTORS®
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NAR Global Partners:
Spotlight on the Asociacion Panamena de Corredores y Promotores de Bienes (ACOBIR)--Sponsor of Panama Spectacular 2006 (see Upcoming Intl. Events) and a new member of the Intl. Consortium of Real Estate Associations (ICREA).
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