Vietnam Expands Foreign Property Ownership to Boost Economy

November 26, 2014
Nguyen Dieu Tu Uyen and Mai Ngoc Chau – Bloomberg

Vietnamese lawmakers approved a law allowing broad foreign ownership of property, as the government seeks to boost an ailing real-estate market and accelerate economic growth.

Foreigners with a valid visa as well as foreign companies and international organizations operating in Vietnam now will be permitted to purchase houses and apartments, according to the National Assembly’s website yesterday. Current laws restrict ownership to foreigners married to Vietnamese and those foreigners deemed to make significant contributions to the nation’s development.

Lake Hotel Waits for Lake in East German Tourism Gamble

November 5, 2014
Alex Webb - Bloomberg

Just outside the East German town of Hoyerswerda, the white-stoned Lake Hotel beckons visitors with four-star elegance. Guests desiring a waterfront view, however, will need to wait another three years for the lake to fill up.

It’s one of a chain of lakes being formed out of open pit coal mines in a 10 billion-euro ($12.5 billion) effort to forge a regional tourist destination that will give the town a new economic lifeline.

Hoyerswerda is symbolic of the lengths to which Germany has gone to rebuild the country’s east -- pumping 2 trillion euros into the region in the 25 years since the Berlin Wall fell -- and the work that remains to be done. While the gap is shrinking, unemployment is still higher in the east than the west and those in the east earn less. And many towns like Hoyerswerda continue to be propped up by government spending.

Mr. Webb may be contacted at

Mansion Tax Cutting London Luxury Prices Before It Exists

October 29, 2014
Neil Callanan – Bloomberg

Anup Pankhania had to cut the offer price for apartments he’s developing in London’s Bloomsbury district by as much as 500,000 pounds ($805,000) because of a luxury-home tax that doesn’t exist yet.

The discounts are just one example of price increases for the best London homes stalling after more than five years of gains as investors wait to see if the U.K.’s Labour Party will take power next year and impose a promised annual “mansion tax” on properties valued at 2 million pounds or more. Owners of second homes who are based abroad would pay more than those who possess a single U.K. property and live in it.

“There’s too much uncertainty and that rings in the ears of all the buyers,” Pankhania, managing director of developer Jaspar Group of Companies, said in an interview. “Foreign investors get worried and that’s a direct effect of all these politics to do with this mansion tax.”

Mr. Callanan may be contacted at

Building a Boston in Cape Town: $13 Billion Dream Rises From Ashes of Apartheid

October 22, 2014
Dylan Griffiths and Mike Cohen – Bloomberg

David Pearson has a vision: a new community of 800,000 -- bigger than Boston -- complete with factories, schools, clinics and a university that will help erase the legacy of apartheid in Cape Town.

If the idea materializes, his 140 billion-rand ($13 billion) Wescape project in South Africa’s second-biggest city could serve as a model for development across the continent.

Mr. Griffiths may be contacted at; Mr. Cohen may be contacted at

Earthquake Damages Thousands of Homes in Southern China

October 8, 2014
Bonnie Cao – Bloomberg

An earthquake that struck southern China last night destroyed almost 7,000 homes and injured 324 people, the official Xinhua News Agency said today.

The 6.6-magnitude quake in Yunnan province killed one person and the likelihood of major casualties is low, the Ministry of Civil Affairs said in a statement on its website. An earlier statement by the Earthquake Administration had said the temblor resulted in “great casualties and heavy losses.”

The earthquake authority enacted an emergency plan covering quakes that result in between 50 and 300 deaths or heavy economic losses. Premier Li Keqiang ordered a “whole-hearted” rescue effort, the State Council said in a statement on its website. The epicenter was 460 kilometers (286 miles) southwest of the provincial capital Kunming, where the quake was felt.

Ms. Cao may be contacted at

China Eases Property Restrictions Amid Growth Concern

October 1, 2014
Bloomberg News Staff - Bloomberg

Chinese policy makers eased property restrictions for the first time since the global financial crisis as a real-estate slump’s threat to economic growth overtakes worries about housing affordability.

People applying for a loan to buy a second home may get lower down payments and mortgage rates that were previously only available to first-time home buyers so long as they have paid off their initial mortgage, the People’s Bank of China said in a statement on its website yesterday. The central bank also eased a ban on mortgages for people buying a third home.

The action marks a reversal in a four-year tightening campaign, as slowing property investment and industrial production raise risks that 2014 economic growth will drift too far below the government’s target of about 7.5 percent. The relaxation follows easing this year targeted at boosting lending for agriculture and small businesses.

To contact Bloomberg News staff for this story: Zhang Dingmin at; Xin Zhou at

Why the Pantheon Is Still Rome’s Crowning Glory

September 24, 2014
Lee F. Mindel – Bloomberg

When I was around 14 my parents took me to Rome. I don’t remember much about the trip except for an overcast day when we made an obligatory visit to the Pantheon, which initially seemed like another dark and ominous monument. But once inside, standing beneath its dome, with natural light streaming in through the oculus, I found myself, for the first time ever, totally mesmerized by my physical surroundings.

Completed around a.d. 125, under Emperor Hadrian, the Pantheon was an extraordinary feat of architecture for its time, and nearly 2,000 years later it remains one of the world’s most important structures. A tour de force of engineering, the building was constructed using progressively lighter materials, with travertine at the base, unreinforced concrete for the coffered dome, and a lightweight pumice mixture at the top.

London Luxury-Home Building Boom Erodes Pricing Premium

September 17, 2014
Patrick Gower – Bloomberg

A surge in luxury homebuilding in London is eroding the premium that developers can charge buyers to acquire a new property.

Average sales prices of new apartments in London’s most expensive districts exceeded those of older flats by 43.1 percent at the end of the first quarter, down from 67.6 percent in 2012, according to a report by London-based broker Huntly Hooper Ltd. An increase in construction combined with a weaker property market may reduce the gap further during the year, Oliver Hooper, director of Huntly Hooper, said in the statement.

Developers including Berkeley Group Holdings Plc (BKG) and CLS Holdings Plc (CLI) are transforming London’s skyline with apartment towers lining the River Thames as they seek to gain from the city’s popularity with foreign investors. Building firms plan to construct more than 20,000 luxury properties in London during the next decade even as the market cools, EC Harris LLP said in a November report.

Mr. Gower may be contacted at

Sweden’s Home Shortage Sparks Attack on Rent Regulations

September 10, 2014
Niclas Rolander and Niklas Magnusson – Bloomberg

Sweden’s rent regulations, which for decades have kept housing affordable, are now fueling a surge in home prices that’s threatening the Swedish economy.

The low rents in attractive areas such as central Stockholm have encouraged many Swedes to stay put in their apartments and discouraged builders from constructing properties for lease. This has exacerbated a housing shortage that has sent prices and private debt to record levels in Sweden.

A growing number of builders, landlords and analysts are calling for the government to scrap rent regulations to alleviate the housing shortfall. Home prices have more than doubled since 2000 and Swedish households with mortgages owe their creditors an average of almost four times their disposable income. The central bank and the International Monetary Fund have warned that soaring debt levels make the economy vulnerable to a severe shock if unemployment rises or prices collapse.

Mr. Rolander may be contacted at; Mr. Magnusson may be contacted at

Mexico Announces Plans for 6-Runway Airport in Capital

September 3, 2014
Nacha Cattan, Brendan Case and Eric Martin – Bloomberg

Mexican President Enrique Pena Nieto’s plans to build a six-runway airport outside the capital sets the stage for competition from local builders and international groups to get a piece of the $9.2 billion project.

The airport will be built near the existing one east of Mexico City’s center and shuttle almost 120 million passengers a year, quadrupling the capacity of the current one, Pena Nieto said during his state of the nation address at the National Palace.

A group of nine Mexican companies, including Empresas ICA SAB (ICA*) and Grupo Carso SAB, will present a joint bid to build the new structure, according to the Mexican Construction Industry Chamber. They could be pitted against international rivals including Spain’s Obrascon Huarte Lain SA, which will probably seek to participate since it has experience in the sector and in Mexico, said Javier Gayol, a Corporativo GBM SAB analyst.

Nacha Cattan may be contacted at; Mr. Case may be contacted at; and Mr. Martin may be contacted at

Canada Precedent Setting Case regarding Standard Exclusion In Construction Insurance Policy

August 27, 2014
Beverley BevenFlorez-CDJ STAFF

According to an article by several attorneys of Borden Ladner Gervais LLP published by Mondaq, the British Columbia Supreme Court decision in Acciona Infrastructure Canada Inc. v Allianz Global Risks US Insurance Company “should be noted by all construction and insurance lawyers, owners, contractors, insurers and brokers, as the Court interprets for the first time the LEG2/96 clause, a design/workmanship exclusion developed by the London Engineering Group which is commonly used for large infrastructure projects.”

Mondaq further reported that the decision “also clarifies the requirement of fortuity and the definition of 'damage' under a COC Policy, issues not frequently litigated by Canadian courts.”

Dubai Boom No Boon for Builders as Payment Delays Climb

August 20, 2014
Zainab Fattah – Bloomberg

Dubai’s two biggest builders are turning to bank borrowing to help fund projects as a rise in late payments from their customers takes the shine off a booming construction market.

Arabtec Holding PJSC, the contractor that helped push Dubai stocks into a bear market in June, said money owed by clients rose to 8.8 billion dirhams ($2.4 billion) through the second quarter from 7.2 billion dirhams at the end of 2013. Drake & Scull International (DSI), the emirate’s second-largest publicly traded builder, took two term loans totaling about 199 million dirhams in the first half, according to its financial statements.

While both builders are benefiting from rising orders, the need to borrow from banks means costly interest payments and could slow the completion of projects, according to analysts. A rapid expansion of Arabtec’s backlog has added to the company’s arrears, while delays for redesigns and cost overruns in Saudi Arabia are hurting cash flow and profitability at Drake & Scull.

Ms. Fattah may be contacted at

Homebuyers Seen at Risk on Floating-Rate Loan Rush: Japan Credit

August 13, 2014
Mariko Ishikawa, Yumi Ikeda and Kazumi Miura – Bloomberg

Japanese homebuyers are piling into floating-rate mortgages, stirring debate over whether they are too complacent as Bank of Japan stimulus revives inflation.

The proportion of home loans with adjustable rates climbed to 42.8 percent of Japan’s new lending in February, the highest since December, according to data from Japan Housing Finance Agency. The lowest variable mortgage rate at Japan’s three biggest banks was at 0.775 percent, compared with a 10-year fixed rate of 1.3 percent.

Outstanding housing loans to individuals expanded to 113.7 trillion yen ($1.1 trillion), the most since at least 1974 in June as BOJ Governor Haruhiko Kuroda’s monthly sovereign bond buying aimed at ending deflation made it cheaper than ever to finance a home purchase. Borrowers like 30-year-old retail employee Eriko Brown, who chose a flexible-rate mortgage to buy a house this year, are betting rates won’t rise significantly, even as global policy makers fret over how to exit from easing.

Ms. Ishikawa may be contacted at; Ms. Ikeda may be contacted at; Ms. Miura may be contacted at

Europe Property M&A at Six-Year High on Klepierre-Corio Deal

August 6, 2014
Neil Callanan and Sharon Smyth – Bloomberg

Klepierre SA (LI) sold almost all its Spanish shopping malls three months ago to focus on better spots in Europe. Now, company values are so attractive it’s willing to become Iberia’s second-largest mall landlord as part of its proposed purchase of Corio NA.

Improving economies, pent-up demand and cheap funding costs propelled European real estate deals to their highest number in six years in the first quarter and the next three months topped that. Paris-based Klepierre’s 4.2 billion-euro ($5.6 billion) offer for Corio, announced Tuesday, would be the biggest transaction in Europe’s real estate industry in at least two-and-a-half years.

“We are observing an enormous amount of appetite for real estate assets in Spain and other European countries,” said Ismael Clemente, chief executive officer of Madrid-based real estate investment trust Merlin Properties SA, which yesterday announced it bought the Marineda City mall in La Coruna, Spain, for 260 million euros. “Investors perceive that these markets have reached bottom.”

Mr. Callanan may be contacted at; Ms. Smyth may be contacted at

UN Seeks Swiss Private Banker Funding for Geneva Facelift

July 30, 2014
Giles Broom – Bloomberg

Geneva’s private banks could burnish their image by helping to fix leaky roofs and remove asbestos from their hometown’s United Nations buildings, according to Michael Moller, who’s in charge of raising renovation funds.

Moller is tapping private banks busy rebuilding their reputations after the global crackdown on offshore tax evasion. They could volunteer to stump up part of the 837 million Swiss francs ($928 million) needed to renovate the UN’s main center for diplomatic talks as member countries are unwilling to foot the entire bill, he said.

Helping rebuild the Palace of Nations, which has cemented Geneva’s reputation as a center of peace talks, would be the right thing for the banks to do for the city that hosts them, Moller, acting director-general of the UN’s Geneva office, said in an interview. Less than two miles away in the city center, more than 4,000 asset managers, advisers and 120 banks have helped Switzerland amass $2.3 trillion of cross-border wealth.

Mr. Broom may be contacted at

Scotland Approves Wind Farms to Power More Than 100,000 Homes

July 23, 2014
Louise Downing – Bloomberg

The Scottish government approved two wind farms that will power more than 100,000 homes.

The government gave the go-ahead to an extension of about 171 megawatts to an existing wind farm near Abington that will bring its total generating capacity to 512 megawatts, it said today in a statement on its website. It also approved the construction of a new 69-megawatt wind farm in South Ayrshire.

Ms. Downing may be contacted at

Sydney Set for Biggest Hotel Boom Since Olympics in 2000

July 16, 2014
Nichola Saminather – Bloomberg

Fourteen years after the last major hotel opened in Sydney’s center, 42 developers are competing to turn two 100-year-old government office buildings into accommodations as demand soars.

Elsewhere in the city, developers including China’s Greenland Holding Group Co. and Singapore-based M&L Hospitality Trust plan to add more than 5,300 rooms over the next five years. If they are completed, the city’s supply of rooms will rise by about 20 percent by the end of the decade, the most since Australia’s largest city hosted the Olympics in 2000, according to broker CBRE Group Inc.’s hotels division.

Hotel construction is picking up as the number of visitors to Australia grows at the fastest pace in at least nine years, sending occupancies in Sydney to a record and the highest in Asia after Hong Kong and Tokyo. Sydney’s average hotel occupancy is set to reach 88.8 percent by the end of 2016, the highest since at least 2000, according to economics advisory firm Deloitte Access Economics Pty.

Ms. Saminather may be contacted at

Lehman Haunted by $780 Million London Skyscraper Claim

June 30, 2014
Erik Larson – Bloomberg

A 30-story skyscraper in London’s Canary Wharf financial district continues to haunt the remnants of defunct Lehman Brothers Holdings Inc.

The business hub’s developer, Canary Wharf Group Plc, is seeking a U.S. court order for Lehman’s estate to pay $780 million in back rent and damages over the early departure of the investment bank’s European headquarters in March 2010.

Canary Wharf’s decision nine months later to forfeit the contract and sign a 999-year lease with JPMorgan Chase & Co. as the new tenant didn’t exempt Lehman from its obligations, as Lehman claims, David Tulchin, the developer’s lawyer, said yesterday in a filing in U.S. Bankruptcy Court in Manhattan.

Mr. Larson may be contacted at

Palm Hills Plans Investment Boost on Land Dispute Settlements

June 26, 2014
Tamim Elyan – Bloomberg

Palm Hills Developments SAE plans to invest more than 1 billion Egyptian pounds ($140 million) in projects this year as the luxury real estate developer says it’s close to settling land disputes and an agreement on a loan.

A 2.4 billion-pound loan being negotiated with Arab African International Bank may be sealed by the third week of July, Co-Chief Executive Officer Tarek Abdel-Rahman said in an interview in Cairo today. Once the loan is secured, the developer will probably increase its original 2014 spending plans of 1 billion pounds, he said.

“I think we are going to exceed the expectations of the market this year in terms of new sales, developments, construction and progress in the projects,” Abdel-Rahman said at his company’s headquarters. “We are revising the budget now in light of the new syndicated facility.”

Ms. Elyan may be contacted at

Luxury Goes Vertical in Frankfurt as High-Rises Spread

June 18, 2014
Dalia Fahmy – Bloomberg

Alexander Dimolaidis is moving on up, going somewhere he thought he’d never go: to the 21st floor.

Until now, he associated high-rise living with the ugly behemoths on the fringes of Frankfurt reserved for subsidized housing. Last month, he bought a one-bedroom unit in the 40-story Henninger Turm.

“I like the freedom of being up so high, the open views,” said Dimolaidis, 43, an advertising executive who fell for the 140-meter (460-foot) skyscraper, which is due to be completed in 2016. It features concierge service, mosaic floors and unobstructed views of the Taunus hills. “It’s very different from the ghettoized life in the high-rises on the outskirts.”

From London to Warsaw, high-rises are losing their reputation as grim necessities on the Old Continent. Europeans, like buyers in New York, Hong Kong and Dubai, are increasingly drawn to their amenities and convenience. Developers, seeking to maximize profit in densely built cities, are feeding the demand with a record pace of construction.

Ms. Fahmy may be contacted at

Clegg Pledges to Borrow to Build Houses as he Sets Stall

June 11, 2014
Thomas Penny and Simon Kennedy - Bloomberg

U.K. Deputy Prime Minister Nick Clegg pledged to borrow money to build homes as he sought to “break the taboo” over state support for housebuilding.

The money could be spent buying land or supporting construction by housing associations and local councils, Clegg said in an interview yesterday after a speech in which he outlined the first elements of his Liberal Democrat party’s economic platform for next year’s election.

“Let’s break the taboo, certainly that exists in the Conservative Party, of doing the necessary to build the houses we need,” Clegg said. “This is now emerging as one of the big long-term structural problems with the economy. Not only is it unfair because it prices young people out of the market altogether, it’s actually a threat to the systemic stability of our financial system.”

Mr. Kennedy may be contacted at; Mr. Penny may be contacted at

China Home-Price Growth Slowdown Spreads as Developers Discount

May 19, 2014
Bloomberg News

China’s new-home prices rose in April in the fewest cities in a year and a half as developers offered discounts and the economy slowed, prompting the easing of property curbs in some places.

Prices last month climbed in 44 of the 70 cities tracked by the government compared with 56 cities in March. That was the fewest cities with price gains since October 2012 when increases were recorded in only 35 on a monthly basis.

Home-price growth moderated both in first-tier and less affluent cities. Prices in Beijing rose 0.1 percent from March, the National Bureau of Statistics said in a statement yesterday, the slowest since September 2012, while Shanghai prices increased 0.3 percent, the smallest gain since November 2012. The eastern city of Hangzhou had the largest decline in April among cities tracked, with prices falling 0.7 percent from a month earlier.

Bloomberg staff may be contacted by emailing Bonnie Cao at

Russia Weighs Shifting $3 Billion of Funds to Crimea

May 13, 2014
Evgenia Pismennaya and Olga Tanas – Bloomberg

Russia’s government is weighing a proposal to free $3 billion of budget funds allocated for two infrastructure projects as it seeks to boost spending on Crimea, a document obtained by Bloomberg shows.

The cabinet in Moscow may halt construction of a Black Sea port and delay plans for a bridge in Siberia, according to the letter signed by President Vladimir Putin’s chief economic aide, Andrei Belousov. The Russian leader ordered the government to evaluate the proposal, it shows.

Putin, locked in a standoff with the U.S. and its allies as tensions escalate in Ukraine, is ramping up spending on the Black Sea peninsula after overseeing its accession from the neighboring country in March. Expanding sanctions from the U.S. and European Union threaten Russia’s economy, which the International Monetary Fund says is in technical recession.

Ms. Pismennaya may be contacted at; Ms. Tanas may be contacted at

Montreal Mayor Sees Projects Replacing Corruption

May 1, 2014
Frederic Tomesco – Bloomberg

Montreal’s fourth mayor in less than two years is trying to rebuild the city’s reputation and infrastructure.

Denis Coderre, 50, is betting the anti-corruption promises that lifted him to office can help attract the cash needed to modernize the 371-year-old metropolis. The city projects requiring at least C$21 billion ($19 billion), four times the annual budget, to update its roads, bridges and sewage systems in the next decade. The mayor spent three days in New York this month pitching investors.

“To his credit, he chose to clear the air” and discuss corruption in an April 15 speech to the Manhattan Chamber of Commerce, said Alexis Martin, a New York-based managing partner at Altios International, a consulting firm that helps small and middle-sized businesses expand abroad. “He clearly showed he was willing to tackle this problem.”

Mr. Tomesco may be contacted at


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