1. Spain: More Hotel Brands, Investors Look Beyond Madrid
For the past 10 years, Spain has been a poster child for hotel development and branding opportunities amid high demand from travelers seeking sunshine, resorts, beaches and culture. Investors are looking outside the biggest cities.
As more international brands have discovered the strength and inherent opportunities across Spain's principal and secondary hotel markets, family hotel companies and independent hotels have had to streamline operations and become more globally aware of distribution strategies to compete. Challenges recently have arisen from higher costs — in part due to the Russian invasion of Ukraine, high inflation and rising interest rates. Also complicating matters are labor shortages, changing guest habits and requirements, and airline and airport glitches in key feeder markets such as the United Kingdom.
2. UK: Technology Giant Launches Major London Office Search
Digital communications technology company Cisco, based in the United States, has launched a search for an up to 150,000-square-foot headquarters in the west London and South East area ahead of a lease running out at its giant campus in Heathrow, CoStar News can reveal.
Cisco appointed JLL for the search, which market sources say is for a building able to house between 50,000 square feet and 150,000 square feet of office space. That would be a significant reduction from the 272,000 square feet it occupies at its Lakeshore campus in Feltham near Heathrow. Singapore's Frasers Property bought Lakeshore, at 9-11 New Square, Bedfont Lakes, from Evans Randall for £135 million in 2020.
3. France: Portfolio Deals Boost Logistics Market
Scott, Daisy, Olympe, Podium, Hawk and Maestro. These are the code names for the logistics portfolios presented to the market in 2023, and which are expected to add before the end of the year to an investment volume that has so far been very limited.
Only €1.5bn has been committed to the French industrial property market this year, a paltry volume compared to that of 2022, according to Knight Frank figures. This must be seen as the "consequence of the rise in interest rates, which has reduced the number of major transactions and portfolio disposals” in particular, said Antoine Grignon, Director of the Investment Department for Knight Frank.
4. Germany: Trade Show Reflects More Difficult Times
At this year's Expo Real, the biggest trade show for commercial real estate in Germany, there were smaller teams, less exhibition space taken and booths with one floor instead of two compared with events in the past. It was all a sign that times have become more difficult.
While last year participants were predicting a recovery of the markets in six to nine months, hopes are now receding further into the distance. Sometime next year, it should be possible to see where interest rates are heading, which would make it easier to calculate prices. As for now industry insiders concede that institutional investors are turning away from real estate because the risk-return ratio these days is better elsewhere.
5. Canada: India Dispute May Affect 230,000 Students
The fallout from an ongoing diplomatic dispute between Canada and India over the June 2022 killing of a Sikh separatist in Canada could have a major financial impact on Canada’s universities and affect housing demand as schools wait to see if Canada matches India’s recent decision to stop issuing visas to Canadians.
Reciprocation by the Canadian government could prevent about 230,000 Indian students from entering Canada, which would have a major financial impact on Canada’s universities and real estate. Canadian Prime Minister Justin Trudeau has declined to comment on whether Canada might suspend visas to applicants from India. About 41% of Canada’s foreign students come from India, which sends more international students to Canada than any other country. There are 230,000 Indian students and 700,000 non-resident Indians in Canada, according to the High Commission of India in Ottawa.
6. US: Vantage Gets Major Data Center Bond Deal
Vantage Data Centers, a global owner of real estate supporting digital networks, raised $1.35 billion through a securitized offering of tenant lease payments in what may be the largest bond deal this year backing these fast-growing properties.
The deal, secured by selling to bond investors a stream of future property income, signals the strength of the property type that's benefiting from interest in artificial intelligence and other increasing digital capabilities. With this major securitization, data centers have now raised $7.3 billion in 12 offerings in what has been a rare active segment of the commercial real estate bond market. The proceeds are primarily being used to refinance Vantage’s existing debt tied up in work at three data centers on its flagship Northern Virginia campus and five data centers in the province of Quebec in Canada.
This report was compiled from CoStar’s news publications in the United States, United Kingdom, Canada, France and Germany.