The Voice of the Overseas Property Industry Sustainable building / Mexico / employing abroad / 10 years of OPP / Italian mortgages / renminbi / legal news /
1 0 T H B I RT H D AY SPECIAL ISSUE
/// SEPTEMBER 2014
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SUSTAINABILITY LIKE IT OR NOT, IT’S COMING
www.opp-connect.com /// SEPTEMBER 2014
MANAGING PEOPLE OVERSEAS / HOW NOT TO PHOTOGRAPH HOMES // THE FUTURE OF PROPERTY SELLING /// OPP is published 10 times per year. / UK £49 // Europe £75 /// Worldwide £99
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CONTENTS This month
Contents Features 30 A decade defined: looking back at 10 years of landmark events 33 We asked 10 property professionals from across the sector to tell us their views on the last decade – and what’s coming up next 46 Developments we have loved, since 2004 54 A picture speaks a thousand words... We wish these ones didn’t. Terrible property photos
Regulars 6 Top ten news stories of the month 9 News analysis – special birthday edition 14 The Big Issue: Sustainability. What should we be doing to protect the planet? 20 What’s up? Development news. 64 Legal news
Data 51 Mortgage guide: Italy 53 FX report: the Chinese renmimbi 58 Mexico 73 Time to find out where you rank... The annual OPP Company Healthcheck
Business 23 Paul Owen on the core values customers have valued across the decades
57 Hi Concept: Weholi revolutionises rentals 68 Events: where will you be this autumn? 76 A life in the day of a property consultant
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24 Experts advise: opening an office abroad. The trials and tribulations – and how to cope
03
The OPP Team
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EDITORIAL Editorial Director John Howell ✆ +44 (0) 20 3540 2225 ✆ +44 (0) 7715 174415 john.howell@opp-connect.com Editor, OPP Magazine Christopher Nye ✆ +44 (0) 20 3540 2217 ✆ +44 (0) 7711 183581 chris.nye@opp-connect.com Editor, OPP China Mina Mu ✆ +44 (0) 20 3540 2223 mina.mu@opp-connect.com
Commercial Director, London Paul Childs ✆ +44 (0) 20 3540 2225 paul.childs@opp-connect.com Commercial Director, Asia Pacific Cedric De Souza ✆ +65 6679 7734 cedric.desouza@opp-connect.com Commercial Director, China Sophia Liu ✆ +86 13910 777 524 sophia.liu@opp-connect.com
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International Property Reporter Francine Carrel ✆ +44 (0) 20 3540 2221 francine.carrel@opp-connect.com
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The publisher accepts no liability for views expressed by contributors or advertisers or for any loss suffered as a result of information in OPP. No product or service is, unless expressly stated to the contrary, endorsed by OPP. © Copyright RGG Ltd. No reproduction in whole or in part without written permission.
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News Analysis: What has been happening in the property world Country Report: The essential facts and figures on a country Letters From: What is happening in the real estate market around the world Legal Round-up: Updates on the legal changes we all need to know about Training: Tips from the experts on finding success in your business FX Report: A country’s currency – past, present and future
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EDITOR’S LETTER
The point of print in 2014? Eulogies for the death of the printed page are premature - it’s not going away just yet
F
or some of our readers (I won’t mention any names, for example of our editorial director), 10 years is barely a blink in their long working life in overseas property. For me, however, it’s the full story. I started work for everything Spain magazine in April 2004 and I have been writing about two-bedroom apartments five minutes from the beach ever since. Although actually, back then it wasn’t all about property. At that time there were eight (EIGHT!) titles in English newsagents just concerning Spain. Those that wrote about culture and lifestyle looked down with contempt on those
Within these pages are people who have survived, thrived even, in 10 up-and-down years
Editor, OPP Magazine Christopher Nye
It’s not all bad news for print
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that covered property. Then they realised that features about how La Movida Madrileña influenced Almodóvar didn’t attract enough advertisers to pay the rent and they closed – or moved into property, and then closed. Since 2006 it has been hard to know whether the sad end of so many magazines was primarily down to the arrival of the internet or the global crisis. But according to Group M (a media investment company) UK ad revenues will drop from £691m in 2006 to around £397m this year. On the other hand, magazines today are run with far fewer staff (and don’t we know it) so according to PwC, even in the worst performing markets magazines are making almost as much money as in 2006.
In the UK, numbers of titles fell by 10% between 2011 and 2013 alone, but since this exactly matches the rise of smartphones and tablets, surely that’s not so bad? Moreover, there have been net increases in the numbers of luxury and retirement titles. Other successes are in Latin America where magazine profits rose 60% from 2006 to today according to PwC. The evidence is that if a magazine is good enough it will still be read on paper, in preference to an app or online product. The Sunday Times Travel Magazine, which I wrote for until OPP nabbed me, has increased circulation by 50% in the past couple of years. This issue is an unashamed trip down memory lane. Both to celebrate our 10 years in print and because, as the industry seems to be rising again, “those who cannot remember the past are condemned to repeat it”. Within these pages are the people who have survived, thrived even, in 10 up-and down sort of years. From page 29 we have 10 industry stars giving the highlights of the decade in their own section of the business. But there is a lot for those who want to look ahead too. On page 14, John Howell looks at sustainability. You thought the issue had gone away? Uh-uh, regulators are getting serious. On page 24 we offer practical tips on how to employ people overseas – CV checking services, long-distance interviewing, long-distance firing… Our country report is on Mexico, which according to official data sends more people to the US than vice versa. Think the emphasis might be on the word ‘official’ there! And please do giggle along with (and at) your fellow professionals at Terrible Real Estate Photos on page 54. So, are we all ready for another 10 years then?
05
GLOBAL NEWS
Top Ten News Stories Our pick of the news this month at OPP Connect Global. Stay up to date on which economies are on the rise
GDP around the world The PIGS are still looking sick and the BRICS are falling. France and Germany are flatlining while the UK is smug, China keeps charging on and Africa is rising. The Gross Domestic Product (GDP) figures for the year to end of June 2014 are in. Global GDP rose by 2.9%. But where are your potential customers getting the feel-good-factor & who’s still counting the pennies?
IRELAND +4.1%
+4.1%
CANADA
UK +3.1%
+2.22%
+3.1% EUROZONE
+0.80%
+0.80%
+4.7%
+0.70%
+0.70%
USA
RUSSIA
INDIA +4.7%
CHINA TURKEY
+4%
+4.3%
+4.3%
JAPAN
+7.5%
+7.5%
-0.10%
-0.10%
MALAYSIA +6.4%
COLOMBIA +5.2%
+5.2% BRAZIL
+6.4%
NIGERIA +6.2%
+6.2%
+10.4%
+10.4%
+1.9%
+1.9%
ARGENTINA
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-0.2% -0.2%
06
PHILIPPINES ETHIOPIA
+5.7%
+5.7% INDONESIA +5.12%
SOUTH AFRICA +1.6%
+1.6%
+5.12% AUSTRALIA +3.5%
+3.5%
SEPTEMBER 2014
US
Spain
Australia
Zillow buys Trulia. Should agents worry?
Party islands lead Spanish homes recovery
China’s A$20billion ‘fair dinkum’ says Australia
As US portal giant Zillow pays $3.5billion for its smaller rival Trulia, some agents are saying it’s great news for the portals’ shareholders, but potentially expensive for agents; costs which will be passed on to buyers and sellers. The Boards of Directors of both companies have approved the transaction, which is expected to be finalised in 2015.
Agents in the Balearics and Murcia are enjoying their best summer for years as British, French and Benelux buyers lead the charge for holiday property. Demand is “unprecedented” says Sotheby’s, “record breaking” says Mercers. Sotheby’s predicts a rising number of Russian and Asian buyers in coming months.
Investments in Australian tourism infrastructure and property by the Chinese will total A$20billion in six years, says the government. That will encourage more Chinese visitors buying more property, says Juwai: “For Chinese, tourism often leads to property buying. They visit, fall in love with a place and end up buying a home there.”
Greece
India
South Africa
Greek holiday homes hit record prices
Modi bars the doors: clampdown on foreigners
Wealthy Russians discover South Africa
Greece is a tale of two very different markets this summer as its tourist hotspots break property price records even while the economy and the local housing markets continue to struggle. Delighted international agents report serious price increases since the winter, with property values reaching new highs in Greek holiday resorts.
The Indian Finance Ministry has warned that immovable property purchases must follow FEMA regulations, which prevent foreign nationals outside India from acquiring property unless it is inherited. But Sotheby’s International Realty is opening an office in New Delhi, in September, after signing a contract with local company RealPro Infra Private.
Wealthy Russians have discovered a new place in the sun. After taking over some of the most desirable coastlines in Europe and colonizing large parts of London and New York, Africa is the new target. According to a report in the Moscow Times, South Africa is the new favourite destination for luxury buys. Many Russians are moving capital abroad.
Switzerland
Barbados
Turkey
Barbados is the pearl of the Caribbean
Foreign sales in Turkey surge
Switzerland’s house prices are being reined in just enough to avoid a bubble, says UBS bank, which adds that many other nations are seeing Switzerland’s control of house prices as a test case. Property prices in the country are increasing, but the bank’s index seems to indicate that government measures, put in place to prevent a bubble, are working.
The wind appears to be firmly in the sales of the Caribbean property market, according to a new report published by Knight Frank. The Island that looks the most promising is clearly Barbados, which saw the number of prime sales increase by 15% last year. The number one buyers on Barbados are the British, with historic ties to this Commonwealth country.
New data from the Turkish Statistical Institute shows a large increase in property sales to foreigners, with Istanbul taking over from the resorts. In the first half year of 2014, 8,507 houses were sold to foreigners in Turkey, compared to 5,234 in the same period last year. Istanbul saw overseas buyers up 150% year-on-year to H1 2014.
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Property price control ‘a lesson to others’
07
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NEWS America Analysis Words | Adrian Bishop, editor, www.opp-connect.com
How was it for you? OPP’s 10 years has been an up and down sort of a decade, rivalling DisneyWorld for thrills and spills.
A
s a change from the usual format, for this special 10th birthday issue of OPP Magazine, rather than focusing on my thoughts about crucial events and issues in the overseas property sector, I asked some leading industry figures in the United States and Canada to reveal their highlights and challenges of the past decade.
What has been the biggest change in property in the last 10 years? Tina Mak The way of lending money. From 2003-2007 we had a great localdriven market where banks were giving money away to anyone
The lack of loans is hampering our business and is a change I never anticipated who could breathe, just like in the US. But unlike the US, Canadian borrowers still need to have a job and the bank has a lot more restrictions. Vancouver’s housing market bounced back around spring 2009 from the financial crisis and ever since we have been in an Asian/People’s Republic of Chinadriven market!
Philip Button The last 10 years has certainly seen North American property on a roller coaster, especially in Florida where the ride has been physical as well as metaphorical! In 2004, Florida property prices were rising steadily at around 7% per annum. 2005 was a record year with gains as high as 25%. The market peaked in 2007 and then dropped significantly until 2012. In the last 18 months the market has steadily risen to where we were 10 years ago and with growth expected over the next three or four years. The single biggest change is the attitude towards risk. Now, banks are more cautious, with property-related lending criteria more stringent and deposits much higher. This inevitably leads to a more stable marketplace and a more educated investor than pre-2007, when irresponsible lending and investors severely over-leveraging created an artificially high. Florida growth over the next three or four years will be much steadier and more consistent. Dominic Pickering The advent of BRIC (Brazil, Russia, India, China) buyers in large numbers. Ten years ago, large scale investment in US property was from relatively few countries but now they are arriving in significant numbers from more South/Central American and BRIC nations.
Is 2014 better than 2004?
Tina Mak I have a wide range of international
Tina Mak, of Tina Mak International, Vancouver, Canada, and host of a radio show for Chinese buyers, www.tinamak.com
Garrett Kenny, Chief Executive Officer, Feltrim Group, Florida, USA, www.feltriminternational.com
Philip Button, Managing Director, Brookes & Co, US-property selling agency, www.brookesandco.co.uk
Dominic Pickering, Business Development Director-Global Real Estate for ORB International. orbmarketingsolutions.com
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Garrett Kenny It’s the lack of mortgages available for buyers with good credit; something I would never have anticipated in all the years I have been in business. Twenty years ago, if I had said ‘there will be no mortgage for qualified buyers’ you
would have said, ‘He has lost it!’ I don’t mean ninja (No Income No Job) loans; I mean loans for good, qualified buyers. The lack of loans is hampering our business and is a change I never anticipated.
09
NEWS America Analysis clients and didn’t focus in Chinese business back in 2004. My business has been 100% referral business for more than 14 years, so the market ups and downs have a minimal impact on my business. The beauty of real estate is that if you establish a solid foundation there are always people that need you.
The diversity of overseas buyers has massively increased
Garrett Kenny Absolutely – 100% yes. In 2004-2005 we had more than US$500million of development projects on the table being master planned. It takes 1824 months to obtain all planning permission for large projects, so what we started in 2005 fell apart when the markets crashed in 2007/08. Philip Button Things are certainly better now for us personally, as well as our business. Lessons were learnt by over-zealous investors during the rising market and any investment now, particularly in the Florida market – if it is well researched and the appropriate due diligence is undertaken – will lead to great returns for investors coming into the market.
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Lessons were learnt by over-zealous buyers – and now investments lead to great returns
10
Dominic Pickering It was more profitable then, but it is better now. In 2004/5 most companies relied on just one or two countries for clients. The new diversity has meant there is much more opportunity to obtain clients from other countries, so long as you have the skills and contacts.
What has changed about overseas demand?
Tina Mak Luxury home and land value properties are in high demand from foreign buyers.
Garrett Kenny Where the buyer has come from. Our business, from 1997- 2008 predominantly came from Ireland and the UK. Our investors came from the same countries. Now I travel a lot more. Our markets are China, Canada and South America. Philip Button Demand for overseas properties has returned to the ‘heady days’ of 2005 and 2006 when our business was extremely busy. Investors have also learned from the volatility of the market in the last 10 years and are now more discerning with their investment decisions; and they undertake more of their own due diligence, which is excellent news for the market generally, as wellinformed investors create stability in the market. Dominic Pickering It now comes from a much more diverse range of countries. Ten years ago, most investors either wanted a vacation home or an investment. Now we see clients who just want to get their assets out of more volatile currencies.
If you could, what would you change about the last decade? Tina Mak Real estate is not just a home, it
has become a commodity, very much affected by global politics. Vancouver is a unique market. Economists haven’t been able to predict our market in the last 10 years and I wish they could stop trying! Garrett Kenny I love what I do and enjoy doing it every day. But I would have stopped those ninja loans as we are all still picking up the pieces from banks giving loans to unqualified buyers. Now it has gone 360 degrees and even good buyers are finding it harder and much longer to get mortgages. Philip Button In 2004 I would have bought more property personally and advised my clients to buy more, too. Then, in 2007, I would have advised everyone to sell! On a more serious note, I would have liked to have seen more regulation over bank lending, which fuelled the property bubble and was largely responsible for the crash. Dominic Pickering I would have hibernated in 2007 and not resurfaced until 2012! I would have diversified quicker, recognizing the changing markets sooner.
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BIG ISSUE Sustainability Words | John Howell, editorial director, OPP
Sustainability: Who cares?
Since 2004, 913 million more people have joined us on the planet and energy consumption is up 20%. Environmental catastrophe edges closer.
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H
14
ow does potential environmental disaster affect our industry? What can – or should – we do about it? How can the international property industry contribute its share of the energy and other efficiencies needed? How do we build the tens of millions of houses urgently needed around the world in a way that is sustainable?
The Problem Let’s start by going back 150 years. Why 150 years? Because in 1864 the American George Perkins Marsh wrote one of the first books about what we now call ecology. In it he looked, in detail,
at the harm caused by excessive use of resources. His words were prophetic. His masterpiece, Man and Nature, is available as a free download from Google Books. The world in 1864 was very different from the world today and the differences help explain our problem. Its entire population was about 1.3 billion – about one fifth of the number now. Most people believed that mankind had the god-given right to use the world’s resources without limit, without risk and as they saw fit. Total energy consumption was about 100 mtoe (Million Tons of Oil Equivalent); today it is 120 times higher. By ten years ago, 2004 (when
George Perkins MARSH
Godfather of green
SEPTEMBER 2014
Population now 7.2 billion: will rise to 9.6 billion by 2050. Source: UN Greenhouse gases up 70% from 1990-2004. Rising steadily since. Source: Intergovernmental Panel on Climate Change 97% of climate scientists say that climate-warming trends over the past century are “very likely” due to human activities. Source: NASA 18% of global population lack access to electricity. 38% lack clean cooking facilities. Source: International Energy Agency 2 billion people live in slums. 3 billion by 2030. Source: UNHabitat 50 million homes needed in China, 30 million in India, 20 million in Brazil. Source: Major General Michael Jeffrey, Future Directions International
In 2004 we were, clearly, consuming resources at a completely unsustainable rate general sustainability – were up 70%, despite our stated intention of controlling and reducing them. Action, it seemed, had to be taken – and taken quickly. So what has happened since 2004? By 2014 we have seen much discussion and planning, some action and a few successes. Discussion produced the Kyoto Protocol, which came into force on 16 February 2005. Since then further intense study has led to a reduction in our projections of the impact of increased greenhouse gases on global warming. We know that increased greenhouse gases can lead to global warming – but to
The construction industry accounts for 40% of world energy consumption and about 30% of greenhouse gases: Source: World Business Council for Sustainable Development The construction industry accounts for 17% of global fresh water consumption, 25% of global wood consumption and 25% of global waste generation. Source: United Nations Environment Programme (UNEP) 2012 In the UK, more than 400 million tonnes of materials get delivered to site each year. 60 million tonnes (15%) go straight to the tip due to over ordering, damage resulting for poor storage etc. Source: ‘Time to bin industry’s lavish habits’ by Mike Baker, Construction News, Issue 7060
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OPP was first published), we had got greedier and a lot more irresponsible. We were, clearly, consuming energy, raw materials and other resources at a completely unsustainable rate and we believed we were producing CO2 and other greenhouse gases in such quantities that we were about to change the world’s climate disastrously and for ever. By 2004, the world had accepted the need for sustainability for over 30 years. In 1972 the United Nations Conference on the Human Environment, held in Stockholm, put the issue on the global political agenda. Yet further conferences every 10 years had produced much talk but little action. So, by 2004, there was a sense of crisis and a realisation that delay in taking action was increasing both the risk of disaster and the cost. Since 1970, energy consumption had more than doubled, the population had nearly doubled and those pesky greenhouse gases – a useful shorthand indicator of
15
WE ALL KNOW THAT RUSSIA HAS BEEN
IN THE NEWS A LOT RECENTLY.
HOW HAS THIS AFFECTED THE RUSSIAN BUYING MARKET?
It hasn’t, in fact it’s still growing! “Russian consumers continue to accumulate wealth despite the political noise. The wealth of russian households grew by 22% against a sluggish economy.”
22.7 million stable, core middle class = potential property buyers Low utility costs = high disposable income Political instability = desire to invest abroad
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Moscow Overseas Property & Investment Show 6,000+ visitors 10-11 October www.InvestShow.ru
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Moscow International Property Show 7,500+ visitors 14-15 November www.InternationalProperty.ru
RUSSIA’S LEADING OVERSEAS PROPERTY MAGAZINE
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RUSSIA’S MOST EFFECTIVE PORTAL
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LET THE PROFESSIONAL STAFF OF THE AIGROUP ASSIST YOU IN ACHIEVING GREAT RESULTS THIS AUTUMN FROM THE RUSSIAN OVERSEAS PROPERTY MARKET tel:+7 495 777 2577 email:moscow@aigroup.ru web:www.aigroup.ru
SEPTEMBER 2014
WORLD ENERGY CONSUMPTION GRAPH 14,0000 NUCLEAR
HYDRO
GAS
OIL
COAL
12,0000 10,0000
Mtoe
what extent is still unclear. The latest information from the Intergovernmental Panel on Climate Change (IPCC) suggests the likely further rise is about 0.5°C by 2100. This is a long way short of the 2-12°C predicted by many in 2006/2007. Action since 2004 includes a number of countries passing laws to give effect to the protocol. These include the UK, which is committed to a staged reduction in greenhouse gases down to 20% of their 1990 levels by 2050: a huge task. There have also been changes to building regulations requiring lower emissions and less waste. More are on the way. Successes include the EU announcing that, across all 28 states, greenhouse gas emissions are down over 19% against 1990 levels. This is well ahead of their 2012 reduction target. However, there is still a huge amount to do. Many argue that we have, so far, made the easy savings and that it now gets much more difficult. For example, carbon neutral homes were defined in 2006. They have been encouraged worldwide. It was intended that all new homes in the UK would have to be carbon neutral by 2013… then 2016... now 2020. Very few have so far been built. Then there is the real killer: the (perfectly legitimate) desire in developing countries for a better lifestyle. The world’s developed nations tend to consume about 3,000-4,000 kilograms of oil equivalent (kgoe) per capita. Some (US 7,000+, Qatar/ Kuwait 12,000+) use a lot more. Many countries in the developing world use only 10% of these amounts but their use of energy is increasing rapidly. In the last 10 years, China’s per capita consumption has grown from 1,800 to 2,500 kgoe; Brazil’s
8,0000 6,0000 4,0000 2,0000
1860
1890
1920
1950
1980
2010
CREDIT: JEAN-MARC JANCOVICI, ENVIRONMENTAL CONSULTANT AND CEO OF MANICORE. WWW.MANICORE.COM
from 1,300 to 1,800. They also often also have rapidly rising populations, so their total consumption increases faster still. The world’s total energy consumption in 2013 was about 11 gigatonnes of oil equivalent (gtoe). If every country used as much as a modest developed-nation
Many argue that we have made the easy savings and that now it gets much more difficult consumer such as Spain or Italy (about 3 tonnes of oil equivalent per person) – and the heavier users reduced their consumption to this amount – total world consumption would double at today’s population of 7 billion and treble as the population peaks at about 9.6 billion sometime around 2050. Official estimates by the World Energy Council and others suggest
“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” - Our Common Future (the Brundtland Report), by the United Nations World Commission on Environment and Development.
What is the industry doing? It seems like we are not doing a lot. From over 30 phone calls to developers from Australia to San Francisco, it seems that few see increased sustainability – including reduced carbon emissions – as a high priority item. Of course, they know that they have to comply with the tighter regulations in the places where they build but they do not seem to have an appetite for the sort of root and branch reform needed to make a serious dent in this problem.
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What is Sustainable Development?
a more modest increase of over 60% by 2050. At the moment, 75% of all energy still comes from fossil fuels. Well over half is likely to do so in 2050. Even with improving technology, that is an awful lot of greenhouse gases! Of course, our sustainability problems are not limited to excessive energy use and resultant global warming. Similar patterns apply to the use of most raw materials and other resources. Professor Paul Jones of the University of Sydney, a leading climate sustainability specialist, told OPP: “With 7 billion people we are already using one-and-a-half times the planet’s sustainable resources. If everyone lived like an Australian, it would be four times. If we all lived like Americans, it would be five. With 9 billion people the position gets a lot worse”.
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BIG ISSUE Sustainability
So what should our industry be doing? Some thoughts: we have to reduce our consumption of raw materials and the energy and carbon footprints of the homes we build. How? There are lots of proposals – many sensible and do-able. Better design. Better insulation. More efficient heating and cooling. Less waste. We will be covering these in future editions of OPP. We must increase the life of our properties – and keep existing properties, suitably updated, in use. Why? Short life properties gobble up resources. “So much energy and effort goes into crushing up concrete and then cementing or gluing it back together,” said Graham Hilton, director of the Alliance for Sustainable Building. “It takes a huge amount of energy and uses more virgin materials. Things need to be made so that they are bolted together and then taken apart for reuse.”
TEMPERATURE INCREASE 1880-2010 0.50
NASA GODDARD INSTITUTE FOR SPACE STUDIES MET OFFICE HADLEY CENTRE/CLIMATIC RESEARCH UNIT NOAA NATIONAL CLIMATIC DATA CENTER
0.25 Temp Anomaly °C
This is a little surprising. There is considerable research showing that both buyers and tenants will pay more for sustainable properties. This is both for financial reasons – such properties should be cheaper to run – and for reasons of image and prestige. However, such concerns do not seem to have filtered through to the international property sector of our industry. Of course, it is not just developers who have a role to play. Agents can influence them by alerting them to the wants of buyers. OPP will be running a full survey of our readers to look at this issue in a lot more depth. We will then report back to you.
JAPANESE METEOROLOGICAL AGENCY
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We need to address the global lack of adequate housing. Unhelpfully, this is likely to lead to an increase in the consumption of both materials and energy. This is partly acknowledged in the Kyoto Protocol: developing nations may use the energy they need to develop, whilst using it as effectively
Why should we address this? Our humanity requires us to – and it makes business sense as possible. However, it is not just in developing nations that there is a shortage of decent housing. Why should we do this? We, in the main, live in wealthy countries and make our money from the world’s wealthy. Our humanity requires us to assist. Plus, it makes good
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business sense! We must find a way to reconcile the part we play in the tourist economy – essential to the wellbeing of many poor countries – with the need to conserve energy and other natural resources. Squaring this circle is the basis of a successful future for the leisure and lifestyle part of our businesses. This issue, too, will feature in the pages of OPP. This whole issue is immensely complicated. So complicated it is tempting to try to ignore it – or, at least, to postpone the decisions needed to deal with it. This is no longer an option. The changes already passed into law will bite increasingly heavily and, if we have children, our concern for their future requires us to take action. There will be a major debate on the subject of sustainability in our industry at OPPLive London (www. opp-connect.com/opplive). Be there… or let me know your views: john.howell@opp-connect.com.
www.opp-connect.com
The Kyoto Protocol
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Countries that have ratified the Kyoto Protocol have committed to reduce their emissions of “greenhouse gases” or engage in emissions trading if they maintain or increase emissions of these gases. The aim is to reduce emissions and limit the future increase in global mean temperature (global warming) to below 2°C. Developing countries do not have binding targets, but are still committed to ‘reducing’ their emissions, which are allowed to grow in accordance with their development needs. Developed countries, which have contributed the most to the historic build-up of greenhouse gases, have stringent reduction targets. These vary from country to country. To date, 191 countries have committed to these changes but, unfortunately, these do not include the US and Canada – together accounting for over 17% of the world’s greenhouse gas production. Fortunately, China (23%) has agreed to take part but how much it can deliver remains to be seen.
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NEWS Development news
Keeping track of major developments Mall of the World announced in Dubai
Launches, milestones, openings... please send news and images of your development to chris.nye@opp-connect.com
Boston tower builder gets state boost
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Dubai has announced plans to build the world’s first climate controlled city. The Mall of the World plan dwarfs other developments even in a region known for megaprojects – it will span 48 million square feet. The mini-city will have everything:
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Around 80 hotels and 20 serviced apartments buildings with a combined 20,000 units The world’s largest mall, spanning 8 million square feet. Covered by a dome that will open during cooler months. The world’s largest indoor theme park A cultural district including theatres – modeled on Broadway and the West End A completely covered, air-conditioned, 7km retail street A “wellness district” (medical care area) on about 3 million square feet. Dubai Holding is developing the super-ambitious project with the aim of expanding Dubai’s tourism industry. They say they hope to attract 180million visitors a year. Jumeirah Group, a subsidiary of Dubai Holding, told Hotelier Middle East that it was eyeing opportunities in the hotels and serviced apartments. Ahmad Bin Byat, Chief Executive Officer of Dubai Holding, said that the project will “follow the green and environmentally friendly guidelines of the Smart Dubai model. It will be built using state-of-the-art technology to reduce energy consumption and carbon footprint, ensuring high levels of environmental sustainability and operational efficiency.” www.dubaiholding.com
Asian Community Development Corp., the non-profit developer behind One Greenway condo in Boston, US, has secured $3.9million in funding from the state. The Department of Housing and Community Development provided the chunk of money for the South Building – a 51-unit apartment and condo complex in Boston’s Chinatown district. The overall project will cost $170million and include 363 residential units across two buildings, including 146 affordable apartments (average price $190,000). Construction is due to start next summer, according to the developers. www.asiancdc.com
SEPTEMBER 2014
Chinese mega development breaks ground
Boyuan Construction Group Inc, in China, has announced the start of construction on a $30million project in Hainan Island and Zhjiang province. The Bashanbandao Project, developed by Sanya Luhitou Tour Development Co Ltd, will stretch over 1million square metres and include four 25-storey apartment blocks, seaside villas, continental hotels and a yacht club. Completion is expected in the first quarter of 2016. www.boyuangroup.com
Starryland start work in Sydney
The Promenade, on the Parramatta River in Sydney, has broken ground. Developed by Starryland Australia, an arm of Fuxing Huiyu Real Estate Company Ltd, the finished project will comprise 774 apartments in 11 towers. Stage 1, released in May, saw all 124 apartments sold in the
first weekend. The site will have an extensive walking and cycling network, and a pedestrian bridge across the river. Prices range from AU$399,000 for a one-bed unit to over $900,000 for a three-bedroom apartment. The development is one of many new projects in the area, which is increasingly being seen as a rival central business district to Perth’s. “We selected Parramatta because it is already a cosmopolitan centre with the potential to become even better,” Hao Liu, director of Starryland Australia, told local press. “It has all the facilities of a modern city and is well served by public transport and motorways.” Construction work on the first stage is due to be completed in two years.
Building bulletins
Transylvania goes green
Hong Kong-based Henderson Land Development has put a residential property in the city’s West Mid-Levels up for sale at a record price of $123,000 per square metre. Once sold, it will be the most expensive residential unit in Asia. The top floor is up for sale at $84million. The current record for most expensive residence was also sold in Hong Kong, for $59million. Broad Sustainable Building’s Hunan ambitious province project, Sky City, is far from completion – local media reports that the site of the 838-metre-tall tower, due to be finished months ago, is currently serving as a watermelon patch. Ground on the project was broken a year ago, when the developer was met with skepticism when it said Sky City would be completed in nine months.
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Romania’s second-largest city, Cluj-Napoca, is about to get its first green luxury residential project. The $13.6million development, Riviera Luxury Residence, will comprise 91 luxury condos on ten storeys, targeted at young couples. The project will be developed on 35,348 square feet of land. The project has received Class A energy certification and is the first residential project in Transylvania to be designated as BREEAM Excellent. Developer I&C Transilbani Constructii expect completion this . rivieracluj.ro
Chinese property company Country Garden sold over a third of its $500 million Ryde Garden (Australia) development on its launch day. Buyers snapped up 296 apartments – 90% of the stock the developer put up for sale – in six hours. Prices in the development start at $488,000 for a one-bedroom apartment, but five penthouses went for between $1.3million and $1.7million. Completion is expected in late 2017.
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r invest in luxury property? If your business is about selling quality real estate, one of the biggest challenges is often being able to meet face to face with potential clients. Exhibiting at The Luxury Property on’s exclusive Hurlingham Club Looking to buy or invest intheluxury property? Show provides the platform to do just that. Over last seven years, thousands of wealthy buyers have visited the show to buy and invest. mber You’ll 4th and 2014 find5th, it at London’s exclusive Hurlingham Club
this November 4th and 5th, 2014 exhibitor ter asFor a visitor go to:enquiries please contact Robbie Hall on: E-mail: robbie.hall@dhpub.co.uk or call: +44 (0)1327 315476 / +44 (0)7595 651 833
rypropertyshow.com To register as a visitor go to: Join us at London’s exclusive Hurlingham Club this November 4th and 5th, 2014. www.theluxurypropertyshow.com please contact Robbie Hall on:
l: +44 (0)1327 315476 / +44 (0)7714 648826 For exhibitor enquiries Robbie Hall on: To please registercontact as a visitor go to: E-mail: robbie.hall@dhpub.co.uk or call: +44 (0)1327 315476 / +44 (0)7714 648826 www.theluxurypropertyshow.com 15/08/2014 11:09
BUSINESS Training
Plus ça change… … le plus c’est la même chose. Much has changed in 10 years, except those essential moments of truth
The core values our clients want to see haven’t changed
A
how similar to our lives day-today life for the cavemen was.” A ridiculous assertion? I think not. Cave dwellers needed to eat and drink. They needed warmth, rest, to reproduce and protect their offspring. They would have sought relaxation, sport and leisure of some sort. Our essential human needs and desires are no different – we just have easier means to
These days clients may find you online, check you out online, but they have the same needs access those things and less need to fight for our life (most of us anyway, thankfully). “So what?” I hear you think (yes, I’m wearing the new Google Ears). So what hasn’t changed in the past 10 years? Few markets have had such a tumultuous decade as international property – and we’ve lost some good companies and colleagues along the way – yet the needs of the client have not changed; value, transparency, trust.
They have money again but they won’t spend it with you unless you offer them that value, transparency and trust. These days they may find you online, check you out online, complain or praise you online, but they have the same needs. The significant change is the many more places where your clients and potential clients will interact with your brand. Jan Carlsson (ex CEO of Scandinavian Airlines) called these individual connections “Moments of Truth” in his excellent business book. The phrase was based on the concept of a bullfighter facing his bull – a moment of truth where you live or die. Every time your client faces your brand, the brand can live on, can grow in their mind, can become a trusted source of information and product. Or, it can die. Spend a little time making sure that your old-fashionedbut-never-out-of-date message of value, transparency and trust is communicated in every single interaction clients and potential clients have with your company. From your website home page to the recorded answer on your voicemail – online or offline – it’s all building or destroying the value your clients seek.
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s OPP celebrates its first decade, it’s impossible not to compare now versus then. Changes in the way we sell our products and services to the world are all about how we communicate with each other, and has there ever been a 10 year period in which more has changed? Since 2004, Facebook has gone from a Harvard dorm to connecting 1.2billion users across the globe; Google has gone from being one of many search engines to the creator of self-drive cars and screens on your glasses (sorry, what is the actual benefit of them?). In 2004 Amazon was mostly selling books, but now sells everything to everyone, everywhere (while paying tax…. where?). However, big though these changes are, I’m reminded of a favourite dinner conversation at those exhibition weekends in my days in international property: “If you could go back to any time in history to see what life was like, which era would you choose and why?” I could never quite decide, but a colleague once said something thought provoking about cavemen and women: “I think we’d be surprised
PAUL OWEN: The Clear Path Company Tel: +44 (0)20 3004 9113
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EXPERTS ADVISE Employing abroad Words | Larissa Rhyn
Staffing sans frontiéres
If you think your staff here are a problem, just wait until you open an office overseas!
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xciting opportunities are waiting to be discovered by property professionals expanding their business into new countries. Not least of these is, to misquote the old army recruiting poster, traveling the world, meeting new people and hiring them. But finding quality houses to sell can be simple compared to finding people who are competent and trustworthy enough to be managed from afar, and a credit to your hard-won brand image. The more obvious barriers to effective crossborder personnel management include: finding people, getting your tax affairs right, employment law, professional qualifications and language barriers.
OPP magazine has interviewed experts with different experiences and expertise in expanding overseas. Simon Chicken owns Startupoverseas.co.uk, an
Finding quality houses to sell can be simple compared to finding competent and trustworthy staff advisory and support platform for companies that are planning to expand overseas. Billy Rautenbach is the executive of Dubai Sothebys
International Realty (dubaisir.com), the first Sotheby’s office opening in the UAE last autumn. Luke Battah is the Senior VP and General Manager of International Business at ClearStar (clearstar.net) a US-based background screening provider that is itself expanding overseas.
First steps?
SIMON CHICKEN: Before considering moving your business overseas, it is all about doing your research. Speak to a professional and ask to be put in contact with people who have experienced the same problems when expanding into a similar area, because exchanging your experiences will definitely help you get better insight
SEPTEMBER 2014 executives must decide whether to pay them in pounds or dirhams. They must also understand the local culture and the market, to be able to communicate and work with employees abroad. In an ideal world, a member of head office staff will be on site for at least the first couple of months to ensure that employees understand the company’s ideals and to assist with any problems that arise.
How do you cope with culture shock?
BILLY RAUTENBACH: In any country in the world today there are different cultures, ethnic groups and religions. Dubai is no different. Being conscious of the cultural differences is important and one has to take these things into consideration. The laws in each market are also always slightly different so you need to make sure you understand them.
How does Sotheby’s manage the hiring of new agents when expanding into a new country?
into the market – this applies for hiring and all other phases of the business setup. BILLY RAUTENBACH: Understanding the market you are entering is crucial. What is the market share in total and what sector do you want to go for? What target market do you want to focus on and is there a market in that sector? Next, you try to recruit the best possible person to assist you from that market to hire staff and set up the business in general.
Is real estate any different to other businesses?
What was your approach in Dubai?
BILLY RAUTENBACH: 17% of Sotheby’s transactions come from this region, so they understood that this was an important market for them and they had to expand into it. They hired me to assist in setting up the new operation because I’ve been working in this business for a long time and know the Dubai market – and many local agents – quite well, so I could assist and advise with many of the important
Must you have staff that have worked for the brand before?
BILLY RAUTENBACH: Eric Roche, our Director of International Sales and Development, has been involved in the brand for over 17 years and is now permanently located in Dubai. Additionally, we have a support member from New York and an agent from Miami. I think this is especially important in the beginning, as it gives new agents a better understanding of Sotheby’s values. The rest of the staff are from the local market – meaning they have previously worked in Dubai and bring important experience.
What are the most common difficulties?
SIMON CHICKEN: The two main problems are language and tax – that is true for any business. I would advise anyone to get a tax adviser because if you get tax regulations wrong you will be in trouble. Besides the tax regulations, human resources [HR] laws in the destination country can be difficult to understand and are a must-read before expanding.
How do Startup overseas help clients who plan to open an office abroad?
SIMON CHICKEN: We work with a series of suppliers in 60 countries across the world. By providing our website users with contacts from our network, they can get advise in all different fields that have to be considered when moving overseas, which is for the specific country they are expanding in, as most legal and tax advisers, for example, differ a lot from country to country. There are recruiters within our network who are able to help with hiring matters. Moreover, we offer the Going Global Exhibition, a 3,000 visitor show, which offers UK based
www.opp-connect.com
SIMON CHICKEN: There are big differences from field to field and from country to country. When you are hiring, the thing you will always have to consider is how to pay your staff – in which currency and which tax regulations apply. If a UK agency starts doing business in Dubai and is hiring Britons to work there,
BILLY RAUTENBACH: Sotheby’s has a standard guideline but may use a different approach for each market. If our research suggests there is little or no additional market for a new business, then we may look for a non-branded, local real estate agent that fits with what our brand represents. We would look at converting that local company to a Sotheby’s Realty Office. Alternatively, if there is a gap in the market for a new luxury real estate brand, we would set up a new business startup, just like here in Dubai.
decisions concerning local characteristics of the market. It is fascinating being part of a new business set-up overseas for this brand; you meet so many new people and it makes a truly great experience.
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EXPERTS ADVISE Employing abroad companies who are setting up overseas operations a platform to exchange information about the specific problems they are starting to face moving into a new market; translation issues, logistics and distribution issues, finding the right premises in destination markets and so on.
what is the best way to find the right staff?
SIMON CHICKEN: If you are looking for staff who already live in the country of destination, it’s best to find a local recruiter who understands your business. If you would like to have Britons working for you, a UK-based recruitment agency who has experience in finding candidates that are comfortable working overseas is your best choice. Some candidates may polish their CVs, which is harder to control overseas if you don’t know the local education system and market.
do you recommend CV checking when hiring overseas?
www.opp-connect.com
LUKE BATTAH: It is a fairly common practice to screen candidates when operating overseas. Especially for larger organizations that have standardized global screening policies and require as much information as possible about their candidates. Obviously, we cannot always fulfill them, because of the different legislative frameworks and privacy positions of different countries.
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BILLY RAUTENBACH: At Dubai Sotheby’s, we decided on a recruitment policy and we implemented it, so no recruiter was needed. I already knew some of the people, the owners did extensive research into the market and we contacted people directly whom we felt were appropriate to work for this brand. We wanted the applicants to understand how Dubai Sotheby’s would be operating and to experience the value and strength of the brand. That is why Eric Roche and I met all the applicants, which allowed us to avoid having to use a recruiter or a
screening service. When you have been working in this business for many years, you know what kind of questions to ask to find out if an agent has the qualifications and experience he or she claims. LUKE BATTAH: What we do use is identity verification, establishing the legitimacy of identities, criminal record checks, employment verifications of the last six or seven years of an individual’s employment and – if appropriate – academic history research. There are obviously many other searches that can be undertaken, especially if you are looking at more senior candidates; terrorist watch lists, fraud databases and media profiling for example.
What does that cost?
LUKE BATTAH: Background checking costs anywhere from as low as £20 up to £2,000 per candidate, depending on how detailed you want the report. Smaller organizations may not have the budget, time or inclination to conduct screening in the conventional way, but our network, skill set and experience will definitely lead to more comprehensive results than anyone can get themselves.
Can applicants pre-screen themselves?
LUKE BATTAH: Yes, I think we are in the middle of a paradigm shift. In the future candidates will go and get their verification done by themselves, pro-actively sourcing their own criminal record check and credit reports. This is definitely where the market is going and some organizations are already asking their candidates to provide this information. Take the education sector as an example. The challenge is that applicants require an independent third party that can verify the information provided – we are that independent third party. Eventually, I think background screening will be more of a consumer driven product, rather than a traditional B2B process, which it clearly is today.
and if it goes wrong...? the golden rules of Hiring and firing overseas
1. When employing people overseas, as with any good investment, know your exit strategy. How much damage can the employee do if you fall out? How easy will it be to remove bank mandates and powers of attorney? 2. Do not rely on an employment contract from your own country, or you risk fines should it differ from employment law where they are based. You may also be required to translate the employment contract into yours and the employees language. Remember to keep copies of important documents at your HQ. 3. Do not assume that you can simply follow your own country’s employment laws. In most instances the employee overseas is covered by that country’s laws, whether you intend that or not, or whether you specify it in the contract. 4. If legal proceedings arise, an employer may be pursued through the courts in their own home country, but under the law of the employee’s host country. For example, should you terminate employment, the former employee could pursue you for damages in the courts of your own country.
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10 YEARS OF OPP
10 YEARS OF OPP OPP MAGAZINE WAS FIRST PUBLISHED IN 2004. IT’S BEEN AN AMAZING DECADE. IN THIS SPECIAL SUPPLEMENT WE TAKE A TRIP DOWN MEMORY LANE AND ASK 10 EXPERTS TO REFLECT ON THE CHANGES IN THAT TIME. MORE IMPORTANTLY, WE ASKED THEM TO PREDICT THE NEXT TEN. 30 A Decade Defined 33 Xavier Wiggins 34 Interiors 35 Regulation 36 Advertising 37 Construction 38 Property portals 40 Alternative investments 41 Eco 42 Currency 43 Funds 44 Technology 48 Developments we have loved
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10 YEARS OF OPP A Decade Defined
A Decade Defined 2004
The world: George W wins a second term…10 new countries join the EU…Boxing Day tsunami kills 280,000 in Sri Lanka, Thailand & Indonesia… Culture: Facebook launches… NZ and Ireland ban indoor smoking... Business: All the world’s largest economies see accelerated growth… 5 million iPod sales… Property: Taipei 101 tallest building in world at 505m… AIPP formed… A Place in the Sun and OPP magazines launch…
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2005
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The world: Bird flu reaches Europe from Asia… first elections in Iraq since 1958… Tulip revolution in Kyrgyzstan… Pope John-Paul II dies… London Olympics awarded to London, bomb attack the next day kills 52… bomb attack on Sharm elSheik… Hurricane Katrina hits New Orleans… Angela Merkel becomes German Chancellor… Culture: YouTube is founded… England win The Ashes...
Business: Google’s share price hits $400 (from $85 in 2003)… World Economic Forum in the UK commits to help Africa… China’s growth matches US decline… Property: Inaugural A Place in the Sun exhibition… OPP gala dinner at Natural History Museum… Spanish land grab laws
2006
The world: Airbus A380 flies… Red Sea sinking drowns 1,000+... Montenegro independence… North Korea gets bomb… US pop 300m Culture: Italy wins World Cup… America’s Got Talent… Take That back… Al Jazeera in English… Business: Twitter launches… oil almost $80/barrel… Property: US raises interest rates for 17th time… US house prices continue falling… Overseas property magazine closures…
2007
The world: Sarkozy wins French presidency… Blair resigns… Bulgaria
and Romania join EU… scramjet flies Mach 10… French train goes 575km/hour… Russians riot in Estonia… Madeleine McCann disappears… Heat wave kills hundreds in Europe… HS1 links London to Channel Tunnel… Cristina de Kirchner president of Argentina... Culture: First iPhone… Windows Vista launch… Boyle wows Cowell... Business: BNP Paribas blocks three sub-prime hedge funds. “The day the world changed”… Queues outside Northern Rock banks… Property: 25 US sub-prime lenders declare bankruptcy… 2.2million US home foreclosures…
2008
The world: Cyprus, Malta adopt euro… oil $100 per barrel… Beijing Olympics… deadly hurricanes hit US… Large Hadron Collider switched on… Barack Obama wins… world food price crisis… Culture: Slumdog Millionaire wins Best Picture Oscar… Business/Economy: iPod sales hit 55 million… Lehman Brothers, Iceland bank collapse… Interest rates 0.5%... 240,000 Americans lose jobs… Bernard Madoff arrested…OECD recession… Property: Largest drop in US home sales… Freddie Mac bought out… 590,000 Brits emigrate… 3.1m US foreclosures… Zoopla founded…
SEPTEMBER 2014
2009
The world: Population of Africa hits 1 billion… swine flu pandemic… Air France 447 crashes into Atlantic… Michael Jackson dies… EU Treaty of Lisbon signed… Patrick Swayze dies… OPP editor’s son Dylan born… Deadly Australian bushfires… Culture: Barcelona wins treble… Lady Gaga’s Poker Face is best selling single… Business: G20 agrees $5trillion stimulus package… US, Canada, Japan, Germany, France, UK no longer in recession… Property: Dubai requests debt deferrment… 3.8million US foreclosures, but house prices begin to rise…
2010
2011
The world: Estonia joins EU… Arab Spring protests in Oman, Yemen, Syria, Morocco… President Mubarak resigns… Battle of Tripoli, Gadaffi is killed… subsequent energy crisis… Japan tsunami… Prince William marries Kate Middleton… First artificial organ transplant… Anders Breivik kills 77 in Norway… Occupy Wall Street protest… Elizabeth Taylor, Steve Jobs die, Osama bin Laden killed… Culture: The Artist wins best picture Oscar… Last Harry Potter novel published… Game of Thrones airs on TV... Business: First commercial flight of the 787 Dreamliner, made from a carbon composite… Portugal bailed out… Greece bailed out again… US sovereign debt downgraded… Italy back in recession…
2013
The world: Meteor hits Russia damaging 4,300 buildings… Egyptian President Morsi deposed in coup… Argentinian become Pope Francis… Croatia joins EU… alShabaab attack on mall in Nairobi… Typhoon Haiyan hits Philippines… Hugo Chavez, Margaret Thatcher die… Prince George is born… Culture: Bayern Münich win treble… Andy Murray first Brit male Wimbledon winner since 1936… Business: Greek Eurozone crisis… garment factory collapses in Bangladesh, killing 1,129… tax dodging of major corporations exposed… Bitcoins… US airlines merge… Obamacare launched… Property: Concerns grow over empty Chinese properties…
2014
2012
The world: War starts in Syria, massacre of women and children in Houla… US Ambassador killed in Benghazi, Libya… India power outage leaves 620million in the dark… Hurricane Sandy kills from Caribbean to Canada… President Obama re-elected… Culture: London Olympics (cost £8.9billion)… Katy Perry divorces Russell Brand Business/Economy: European unemployment highest ever… Encyclopedia Britannica ends printed version… UK double dip recession…
Politics/world affairs: Latvia adopts euro… Ebola virus spreads… annexation of Crimea by Russia… Malaysian airlines MH370 disappears… ISIS takes over much of north-west Iraq… King Juan Carlos abdicates… Israeli ground offensive in Gaza… Malaysia Airlines Flight 17 shot down over Ukraine… US air campaign against ISIS…. Culture: Germany wins World Cup in Brazil… Business/Economy: UK economy reaches pre-crisis level… Property: OPP’s first Singapore event… UK prices rise 10% in year to June, led by London at 20%… Battersea Power Station phase 1 sells out…
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The world: Haiti earthquake kills 316,000… Winter Olympics in Vancouver… 8.8magnitude earthquake in Chile… President of Poland killed in Russian plane crash… mudslides in Madeira… Icelandic volcano grounds flights… Deepwater Horizon… Aung San Suu Kyi released… Mohamed Bouazizi sets fire to himself in Tunisia, starting Arab Spring… Culture: Katy Perry marries Russell Brand... Business: US national debt hits $14.3trillion, iPad launches… Eurozone crisis begins: Greek debt downgraded to junk… Greece bailed out… Ireland bailed out… Property: Burj Khalifa is highest building in the world (829.8m)…
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10 YEARS OF OPP Xavier Wiggins
10 years of OPP Xavier Wiggins xavier.wiggins@opp-connect.com
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avier Wiggins is one of the most experienced and well-connected people in the overseas property industry. He is also OPP’s founder and CEO. Here he takes us through it from the beginning... The overseas property sector was, in 2004, and remains today, a multibillion dollar cottage industry. OPP
growth, going from 0 to 30 shows a year in three years. Then Blendon asked me to take over newskys.co.uk. Salespeople then loved event leads, but when we passed 3,000 internet leads to one Spanish company they didn’t even speak to them! I decided that the only way for it to work was to act
Palace – miles from anywhere, on a hill in North London, because we didn’t want people just nipping in for an hour. People quickly got the concept and we headed off into those happy, happy days of ‘06 and ‘07 when everything seemed to go right. But now is a highlight too: our
WHERE DID PROFESSIONALS GET THEIR INFORMATION PRE-OPP? I HAVE NO IDEA like an agent; pre-qualifying clients and passing them to developers and agents. But that was at odds with the independence of a publisher so I conducted a management buy-out. Having spent a fortune on Newskys I had to make some money quickly so I took on various consultancy clients, including a certain MRI Overseas Property where we created an exhibition model that worked rather well. They were only one of 30-40 marketing clients at peak but when MRI grew from 10 to 1,100 staff, mainly thanks to the very simple marketing model, we were noticed. Which led to thoughts about a trade magazine, and OPP, in 2004. Where did people get their trade information pre-OPP? I really have no idea, but it was instantly popular. I still love seeing the magazine arrive from the printer every month. Other highlights? The first OPPLive launched in 2005, held in Alexandra
internationalization; opening global offices; the Gala Dinner back at the Natural History Museum last year. Even better, the future looks superb. We are about to launch OPP Match, which I am confident will take the industry by storm. It’s a “why has no-one done this before?” moment, keeping me awake at night for all the right reasons. As an industry we are advancing in many areas, such as marketing and product innovation, but why is the industry still so unregulated? Will that ever change? OPP connects people, both with our team of journalists creating original, independent property news, and commercially via our marketing department. We offer guarantees. We deliver a bloody good service. We change businesses and often lives. That is a massive claim but I’ve seen it again and again and I intend to see it many more times over the next ten years.
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was formed to bring it all together and help people learn about how people “over there” do things. Connections are essential in this business – and OPP has been there for the past 10 years to make that happen. We needed to know then – and we need to know now – a hell of a lot about buyer markets and destinations. Before 2004 I was in sales. Things looked up when I left Liverpool for London in 1995 to take a job on the FA Cup Final programme. As a big football fan that was a bit of a dream job. It lasted a day. I joined Blendon Communications and was asked to re-launch Homes Overseas magazine, which was being incubated after the previous recession. My boss and mentor, Derek, told me to go to Benidorm and Torremolinos and “see who’s still around”. Happy days for a young exec! After the magazine came the shows and six happy years of
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10 YEARS OF OPP Interior Design
Interior Design Lesley Zaal Founder of Etcetera Living, Dubai
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ounder of Etcetera Living and wife of Zaal Mohammed Zaal, chairman of Al Barari in Dubai. www.albarari.com The big new thing in 2003-2004 was shabby chic. We did some bedrooms here which were a combination of shabby chic and French Provençale; furniture painted grey, that sort of thing, and no-one had done that in Dubai before so it seemed crazy! It became very popular – still is for young girls in this part of the world – but not many do it now. I was on the first course that the interior designer Kelly Hoppen ran in London and that’s what really got me fired up to start my business in 2003, just before OPP. We were also just starting on architectural designs for Al Barari, so I was looking at the plans from the point of view not only of an interior designer but also of a
kept ticking over. We had lean times but it was never an overwhelming concern. I never had to fire anybody. Back in 2004 people in Dubai didn’t really worry about interiors so much because they were renting. Now they own their homes and are much more sophisticated. There is a new generation here who love interiors and fashion, so they want their homes to reflect that and also reflect their position and status. They all travel and stay in luxury hotels so they know the best names. Honestly, go to Borders bookshop in Dubai and all the magazines are interiors! It has gone mad! Today the trend is for a more pared down look and clean lines. They would rather pay for quality – not necessarily for fashion designer brands, but something that looks beautiful and will last. I am going to Maison & Objet in Paris this
can look like stone, marble, motherof-pearl, capiz shell wallpaper, with actual capiz shells in it. The choice is incredible and so exciting because you can keep these clean lines and then put something amazing on the wall and that brings a whole theme together just by an accent of wallpaper. Interior design has always excited me but especially now. If someone is on a tight budget it doesn’t mean their home can’t look a million dollars, it just means you have to be careful in how you choose the pieces. In each area you need a ‘wow’ piece – a special chair or a wallpaper or an amazing light or a piece of antique furniture. Something that focuses your eye. Find the one thing you really really like and everything else falls in to place. Even in a £65million apartment in One Hyde Park in London there is still one single thing that you focus on.
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GO TO THE BORDERS BOOKSHOP IN DUBAI AND ALL THE MAGAZINES ARE INTERIORS!
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mother with young children and how homes actually function. Often architects and interior designers get so involved in the design that they forget about functionality. We had a quiet period two years ago, like everyone, but we were lucky because we had contracts that were signed up before, and even then we still had clients so we
month and I know I will see much more clean lines. Even the 1920s look is back now, which I love, but interestingly the furniture is becoming much more simple. Wallpaper has come back massively. It is huge now and not at all like the floral stuff that your grandmother would have had! Wallpaper today is just amazing: it
Another change from 2004 in Dubai is the better use of outdoor space and so much more variety of plants. It used to be just date palms or bougainvillea but now you can have a beautiful garden or apartment terrace. I love to sit out in a garden at Al Barari with our landscape designer – my daughter – and plan a design.
10 YEARS OF OPP Regulation
Regulation John Howell john.howell@jhco.org
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n the ten years since the first copy of OPP landed on the desks of our delighted readers, a lot has changed in the legal world. Picking out the most significant changes proved quite a challenge. With the glorious benefit of hindsight, we can see this whole 10-year period has been centred,
EB5 program, launched in 1990, but during the last ten years, and especially since the crash, countries all over the world have decided to encourage wealthy foreigners to invest in them by rewarding the investors with a residence visa – the famous ‘golden visas’ . This may well come back and bite them, both
to domestic buyers and attractive to foreign residents and investors. The process continues. Brazil is contemplating tougher laws – at the same time as Mexico is looking to further relax its rules. For mortgages, from 2007, when mortgages were freely available and the lifeblood of our industry, we
THE TREND WORLDWIDE HAS CLEARLY BEEN TOWARDS INCREASING RESTRICTIONS in terms of reaction from the public and in unexpected costs. The right to own property is being extended to more countries, most notably Cuba. In 2011, Cuba announced a law allowing citizens and permanent residents to buy and sell their own real estate. This is a huge social change, probably with far reaching impact. In other places, the right of foreigners to own property has been extended. For example, in Turkey, a 2005 law allowed foreign buyers from certain countries to own property anywhere in Turkey and, in 2013, that right was extended to buyers from all countries. At the same time, in other countries, restrictions have been imposed. Governments across Asia Pacific, in particular, have been trying to strike a balance between ensuring that residential property remains both affordable
have moved into an era with strict restrictions on lending. Yet there is still money for the purchase of vast numbers of foreign properties. The buyers, however, are looking rather different from the buyers we saw ten years ago. Around the world, governments – desperate to bring in additional income – have introduced tougher tax laws for the foreign owners of property. After all, you don’t lose votes by taxing foreigners! Even countries that have not changed their rules are applying their old laws more aggressively. These twin traits are likely to continue far into the future. The Kyoto Protocol came into effect in 2005. This contemplates CO2 reductions of 80% against 1990 levels of greenhouse gas emissions by 2050. This will have a huge impact on the international property industry. See the Big Issue article on pp14-19.
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intellectually and chronologically, on the crash of 2007/2008. Lawmakers all over the world scrabbled to pass emergency measures and lawyers battled to apply the new and existing laws to deal with situations they never thought they would see. There is a lot more regulation of our industry in 2014 than there was in 2004. Singapore, Turkey and others have restricted the right to sell property to fully licensed, regulated estate agents. Many other countries have imposed restrictions on the marketing and sale of investment property. These trends are likely to accelerate over the next few years. Just as important as the extent of regulation is the increasing willingness of regulators to act. People who don’t follow the rules are facing tough sanctions. Residence by investment started with the United States’
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10 YEARS OF OPP Advertising
Advertising Duan Coetzee Chairman, Admakers, duan@admakers.com
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en years ago was pre-iPad, Facebook, Twitter, YouTube and smartphones. Flip open Nokias were the state-of-the-art phone. Some CEO’s still didn’t know how to send an e-mail and a website was a novelty for most. In real estate, the newspaper was the most important lead generator and a television campaign or a presentation video was a real luxury. During the boom, property was so easy to turn a profit that even my hairdresser became a ‘developer’. The 2008 downturn shook out the lightweights (and some arrogant heavyweights), which was good for AdMakers (www.admakers.com) as companies that had taken marketing in-house came back to us to help them trade out of trouble For the lower end of the market and resales now, portals control the market. At the luxury end, however, especially high-end real
beats personal contact, an exclusive database and a variety of media. Social media doesn’t work for high ticket items like real estate, jets and yachts/boats. Our clients prefer to be private. Most of them are not on Facebook and they don’t Tweet. There have been dramatic changes to advertising in print, TV, radio etc. Viewers can skip advertisements on TV, which is a crisis for that industry. It’s quicker and more convenient to follow the news on your iPad than to buy the newspaper. But the drop in newspaper circulations and television viewership hasn’t been as dramatic as predicted. You can’t replace a good drive-time radio show. The effectiveness of ‘new’ media has reduced dramatically over the past few years; much more dramatic than the drop in effectiveness of more traditional media. Not too long ago a ‘clickthrough’ rate of 2.5% was the average for online advertising
magazine is going to be around for a few months or even a year, while the banner ad is gone in a flash. In addition, any average designer can design a good web site at minimal cost, so the online environment is certainly less exclusive. Ironically, advertising costs in traditional media have not being adjusted down to reflect lower circulation figures. Newspapers now contend that their ‘readership’ per paper has gone up although circulation is down, backing that up with bogus research. Of course an excellent website is a non-negotiable nowadays, and if I am looking to buy a luxury home in a specific area I will be ‘Googling’ it. Good movie-making in terms of advertising will be the next big thing. At AdMakers we are investing heavily in that. Video streaming will be huge in future in the higher end market because advertisers
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THE DROP IN NEWSPAPER AND TELEVISION VIEWERSHIP HASN’T BEEN TOO DRAMATIC
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estate projects, traditional media still dominates. Anyone can make a cheap development look okay in an online listing, so having a wellexecuted marketing plan involving TV, YouTube, brochures, high-end CGIs, smart sales environments – and the ability to touch and feel the product – becomes a sign of quality. At the high end, nothing
banners. That has now reduced to less than 0.5%. And whereas almost everybody has access to the internet and can click on a banner ad, which makes targeting challenging, not everybody has the budget to buy a good glossy magazine. On the internet one cannot control the advertising environment as well as in conventional media. And that nice
are not restricted to the old 30 or 60 second commercial like they are on television. You can make a great movie about your product with Hollywood production values and storytelling, and if it’s good enough, millions will watch it. So yes, the market has changed a lot but I think the blending of new and old media is where it is at.
10 YEARS OF OPP Construction
Construction Reyes Coll Taylor Wimpey España
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eyes Coll, Taylor Wimpey España. taylorwimpeyspain.com The real estate market was of course completely different in 2004. There was stronger demand, mortgages were more available, prices were rising every year, and there were higher margins for developers. Since then, many
with two bathrooms, communal pool and gardens and parking space. Being close to the beach and airport and amenities is always high on buyers’ checklists. Foreign buyers are generally choosing to buy a brand new home, rather than renovating an older property – although of course that
aluminium windows preferably) are very important. Terraces have got larger. A common request is for a communal pool and gardens but with a large terrace. That way holiday home owners get the benefit of their own large space to eat and sunbathe and relax. But when they arrive for their
FOREIGN BUYERS ARE CHOOSING TO BUY A NEW HOME NOT RENOVATE AN OLD ONE depends on how beautiful the older property is! Interiors are much more modernlooking and have changed along with how families interact and live their lives. With furnished kitchen it is all about clean, light and modern. Silestone (a kind of quartz) and compact resin worktops are very popular. From an architectural perspective, kitchens tend to open directly onto the living areas now; nobody wants to be stuck in an enclosed kitchen on their own, especially on holiday. People want open kitchens and island units you can sit at. Enclosed, formal dining rooms are also less popular. People want to eat informally and in a more relaxed setting, maybe in front of the TV. That’s a reflection of the way we use modern media, and indeed great WiFi coverage is an absolute essential for modern families. Living rooms with masses of light streaming in (through double-glazed
weekend away they don’t have to worry about the state of the grass or whether the pool has gone green. It makes a home easier to rent out too. To that end people also want good storage. The paraphernalia of holidays is so bulky that you need large cupboards to store the deckchairs etc. Fitted wooden wardrobes are another must-have. From a green point of view, solar thermal systems are both eco-friendly and a source of cheap power. Energy saving measures such as double glazing and good insulation is important. Some of the changes of the past 10 years have been imposed on us from government, especially the European Union standards on build qualities. Also, the Código Técnico de la Edificación (CTE) requirements cover security, structures, fire legislation, accessibility, noise protection and energy saving among others.
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builders have disappeared and there are hundreds of thousands of empty properties in some parts of Spain – though not in the beautiful tourist resorts where people want to buy. Demand has decreased all round, but new nationalities are buying in Spain, notably from Russia, Norway and the Middle East. We’ve all had to adapt to the new buyers, in terms of how we communicate with them, both with more languages and better use of the web, portals, online newsletters etc to obtain leads. But good properties in good locations, appropriate priced, are still selling well, and the other positive is that they are primarily to cash buyers Another difference is how discerning clients are now. For a builder, that is ultimately very rewarding. We want to build quality! So what is seen as quality in 2014? The most popular unit is a two or maybe three bedroom apartment
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10 YEARS OF OPP Portals
Portals Simon Baker CEO, Property Portal Watch
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he start of property portals was around 1996. After the dot.com crash of 2000-01 people said, “well, portals are an interesting niche but they’ll never replace newspapers”. Then from 2005 things really changed. By 2007 mature countries like in Western Europe, Australia and North America portals were running around like mad, building content as the internet took off as the prime way of searching. That’s when we saw the emergence of RightMove, realestate.com.au, immo24, seloger etc as clear leaders. They had lots of content, arranged in a systematic way so people could search. They built a brand around that – though not necessarily monetising it yet. Then from 2008 onwards came the monetisation phase. Prices went up, traffic went up, they started to make lots of money and are billion dollar business now.
£1billion competitor to a £2billion RightMove. Then we had that time where in a bad economy people still have to sell their homes but they don’t want to spend the money on print, so they spend it online. The eyeballs had moved online but the laggards in real estate hadn’t. They had to be pulled online kicking and screaming. The most recent developments have been: 1. Mobile. You don’t need to be sitting at your computer, you can be anywhere anytime with your 4G network. 2. The brands became household names. 3.The prices of listings went up because they had market power while print continued sliding into oblivion. 4. New markets evolved – South America, SE Asia, etc. For the future? Now that the
are the two bits of data that people want. Commercial property will get drawn more into the digital age and developers will embrace digital more and more. Cross border transactions will become easier; customers will have access to listings in their own language, with more information. Will agents be able to fight back, like they are in the UK with Agents’ Mutual? Getting all those independent agents working together will be like herding cats, and Agents’ Mutual will still have to make enough money for marketing. What will their site have that the brand leaders don’t already have? Why will the eyeballs leave RightMove and go there, when RightMove has been throwing millions and millions of pounds of marketing at them over the years? The real answer for agents who say the leading portals are too
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THE EYEBALLS HAD MOVED ONLINE BUT THE LAGGARDS IN REAL ESTATE HADN’T
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In parallel with that you had the upstarts, like Alex Chesterman with Zoopla. He said “you know what, there is room for two in the market and most of these smaller guys don’t what they are doing – they just didn’t get the scale, they should have merged” – so he went gobble gobble like Pac-Man and pulled off a few miracle deals, creating a
listings are all digital, the question is: what can you do with them? It is going to be a case of everything is available all the time everywhere. More mobile, more wearable devices. Exactly in what form I don’t know, but it will all go back to two things: what is for sale and how much? And what is not for sale – but what’s it worth? These
expensive is to systematically experiment as to where the value lies. Don’t just complain! They put money on RightMove because they get the leads, but what’s the price per lead? How do those leads convert into sales? Most don’t do that work so they can’t work out if they could be on cheaper sites for the same outcomes.
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10 YEARS OF OPP Alternative Investments
Alternatives Guy Tolhurst guy@intelligent-partnership.com
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n 2004, investments in land and property weren’t viewed as alternative and certainly weren’t on the regulatory radar. We had direct investment opportunities – typically into land and property – and unregulated funds (UCIS) into land, property, commodities, forestry and agriculture across a varied risk spectrum. With little regulatory oversight, they could be marketed freely to retail investors. Until late 2007 it didn’t take much for people to put their cash into property. Financial advisers focused on mainstream funds and property agents on land and property. Commissions were an obvious incentive and pre-2008, I estimate more than 80% of investments were made with cash. Offerings were simple and structures were easy to understand: they didn’t require fixed terms, guaranteed returns, defined exits and interest on deposits etc.
Investors were seeking performance, while developers, project and land owners, starved of traditional funding, searched for new sources of capital. Soon, retail investors were targeted and in early 2009 SIPP money started flowing into alternatives. This, and the regulatory interventions that followed, led to their peak in 2012 and fall in 2013. The meteoric growth in alternatives wasn’t fuelled by advisers. By mid2012 we estimate 70% of alternative investments were being made via a SIPP and more than 65% of this was on a non-advised basis via unregulated agents. From 2010 to 2012 the sector was incredibly buoyant with over 500 agents. By the end of 2013 we estimate that 750+ alternative investment products, from student property to burial plots and everything inbetween, had been marketed to retail investors. Most products had
flow of inappropriate capital into alternatives; the market was taken advantage of and the regulator issued proposals in 2012 to restrict the sale of non-mainstream pooled investments to retail investors. The grey area surrounding what was and what wasn’t covered was enough to deter the majority of investment providers, and the clamp-down on inappropriate pension transfers cut off the main distribution channel. Tackling the abundant flow of capital into alternatives via SIPPs was next. Proposed increases to capital adequacy requirements for holding non-standard investments and a series of visits from the FCA have left few SIPP operators able or willing to allow alternative investments in 2014. Today we estimate there are fewer than 200 agents, with the vast majority of investment opportunities no longer available to retail investors. Is this better than where we were in
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FROM 2010 TO 2012 THE SECTOR WAS VERY BUOYANT WITH OVER 500 AGENTS
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So what’s changed? Firstly the global downturn in traditional assets. As low-risk, safe-haven assets like cash, property and equities came under the spotlight, more sophisticated investors sought alternatives to provide diversification. The market reacted in mid-2008 with direct investments into hotel rooms, agricultural land and forestry.
fund-raising requirements in the millions and some larger projects raised £100million+. We could be looking at £3bn to £5bn invested into real asset alternative investments since 2008. This number didn’t go unnoticed by the regulator, especially with investment failings in 2012 and 2013. The regulator should be commended for stemming the
2004? We certainly have more clarity and can expect greater transparency and fewer investment failures. The problem with blanket regulation is that it also captures genuine opportunities. Over the next 10 years investors will naturally seek out new ways to invest and the industry will undoubtedly evolve and innovate to meet those needs.
10 YEARS OF OPP Sustainability
Sustainability Gordon Miller gordon@sustainworldwide.com
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ordon Miller is a writer, consultant and co-founder of Sustain Worldwide Green construction was a minority interest in 2004, the realm of visionaries, eccentrics and “hippies”. In the UK the paradigm shift followed the 2006 Stern Review, which legally committed the nation
contractor – has to engage with the green agenda. Builders have to meet a raft of environmental resource and energy reduction targets, landfill avoidance quotas, water usage metrics and so on. Taxes and fines are levied if they don’t. Meeting compliance regulations and not getting fined have been
I was writing regular property-based articles for them). Their argument was “my readers are not interested in green”. In 2007 and early 2008 they were more receptive but then, the global economic crisis happened and green dropped off the editors’ agenda. It’s never really recovered. Conversely, the trade press covers
UNLIKE CONSUMER PAPERS, TRADE PRESS COVERS SUSTAINABILITY IN DEPTH the sticks. The carrots have been “favourable” contract awarded for developers building sustainability exemplars. Consumer expectation and risk mitigation to exposure is also driving companies to engage with sustainability and social justice issues – not so much in 2004. The positives since 2004 are a slowing in CO2 emissions (though not a reduction). New homes are cheaper to light and heat than they were. The negatives: meeting sustainability standards has become a tick box exercise, driven by government targets that are not holistic, while in our sector, the public is not really engaging with the green agenda. Despite media coverage, most house buyers still don’t consider how their homes are built and powered. I began writing about sustainability in 2006. Initially, it was difficult to convince newspaper editors to commission me (although
sustainability, energy, resource efficiency and climate change in depth. So, I have adapted. I now write predominantly for a trade rather than consumer press, work as a consultant advising companies on their sustainability communications strategy and how this dovetails their overarching communications strategy. Sustain Worldwide, the organisation I co-founded in 2010, couldn’t have existed in 2004. Sustainability is becoming mainstream; in 10 years’ time it will be the norm. Compliance is forcing business to go green or be legislated out of business. Many companies I speak with, especially SMEs, are practising sustainable initiatives already but haven’t realized they are, so they haven’t communicated them to their employees, customers or the press to generate positive PR. Don’t hold back on understanding and engaging with (and communicating your) sustainability.
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to reducing carbon emissions by 80% by 2050 compared to 1990 levels. The construction industry (which accounts for 40% of emissions) must now act through a series of increasing targets in areas such as energy performance. In practice, homes built today must be at least 40% more energy efficient than they were in 2006 and commercial buildings “nearly zero carbon by 2019”. EU countries, by and large, have committed to similar standards and targets. The US has a strong green building lobby while in Singapore and Malaysia high standards are being set by several developers. So, the landscape has changed immeasurably in the past decade and rapid technological innovation has accelerated the shift. Solar panels are cheaper to produce, buy and install. Today, every company in the construction sector – developer or a
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10 YEARS OF OPP FX
FX Charles Purdy charles@smartcurrencyexchange,com
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o much has happened in the world of overseas property in the ten years since OPP and Smart Currency first started in the overseas property business. For those too young to remember, there was a time when people seemed willing to get on a plane, get off at the other end in some distant land and, without a second thought, buy a property. Properties were plentiful, finance was readily available and prices were going one way and that was up. Then came the financial crisis. It first stuttered into life here in the UK with queues forming outside the bank Northern Rock, who had run into “liquidity” problems. This immediately undermined sterling which collapsed across the board. How many of us can remember when sterling could be exchanged for more than €1.50/£1 and US$2/£1? Then the liquidity
rates were cut across the board to record lows. The US, UK and Eurozone pumped money into their economies – the first two in the form of quantitative easing which was “invented” for the crisis – and the three currencies all weakened. But not all major currencies were similarly afflicted. The commoditybacked currencies such as the Australian, Canadian and New Zealand dollars strengthened significantly, benefitting from the high growth economy of China and its insatiable demand for hard commodities such as iron ore, or soft commodities, such as dairy products. Six years on, a bit of stability has returned to the markets. The UK and US economies are now growing and unemployment is falling. Both positive signs, which are supportive of their respective currencies. They are also reducing their programmes
bottom of the bad debts sitting in the banks. They also now have the Ukraine problem and the tit-for-tat sanctions with Russia which has brought any nascent Eurozone recovery to a shuddering halt. Inflation is also worrying low. So not a great situation for the euro or for the rouble. The renminbi is now coming more to the fore. For many years it has been very closely controlled by the Chinese but there is now a drive to make it more freely tradable. This will not be a quick process but given the size of the Chinese economy it will be a very powerful force in the world of currency. Although I think we are over the worst, I think a comment I saw in the press recently sums up how uncertain the recovery for the world economy still is: “With the economic contraction in Japan, the dovish surprise by the Bank of England, a
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A BIT OF STABILITY HAS RETURNED TO THE MARKETS SINCE THE FINANCIAL CRISIS
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problem spread and the rest of the western world went into financial meltdown. A whole raft of US and UK financial institutions needed emergency government funds and certain euro-based countries, such as Ireland, Greece and Cyprus, needed to be bailed out by their partners in the Eurozone. Interest
of quantitative easing. There is even talk of increasing interest rates, but still no timescales. The Eurozone is in a very different position. Although they did take various measures to keep things going through the crisis they haven’t been able to tackle some of the structural issues and only now appear to be getting to the
poor US retail sales and a shocking fall in in Chinese loans, hikes in benchmark interest rates seem to a distant possibility in some of the world’s biggest economies”. Far from a pretty picture. It highlights that we are still a long way from currency stability and high growth – the world in which OPP and Smart Currency started.
10 YEARS OF OPP Real Estate Funds
Real Estate Funds David Wise Chairman, AREF
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avid Wise is Chairman and Investment Director, Association of Real Estate Funds (AREF). 2004, in terms of fundamentals of the property market, wasn’t so different to today. It was a relatively good time to be investing in commercial property and
transparency. That makes people wary, but they are looking overseas for diversity and, increasingly, faster-growing markets like Asia. That wasn’t the case in 2004 and neither was the very, very significant wealth coming from Asia into the UK. Indeed that has been one of the big drivers of the UK
class – everyone from large to small investors are involved. In the UK we are behind that. It is almost an emerging investment class for the large scale investors in the UK, who have traditionally been frightened off by the politics; politicians being disposed towards heavy regulation. However, that is
THE PROPERTY FUND INDUSTRY COVERS A BIG RANGE OF PEOPLE AND VEHICLES economy; money coming in at very favourable exchange rates. It is one of the advantages of us not being in the euro that the exchange rate has taken the pain rather than the man in the street. A fund effectively offers professional property management via a collective investment scheme. Normally I work with large institutional investors putting in £20million to £50million; because they recognise that a professional manager can do something they can’t do. There is a lot of stuff that is very big and lumpy and it isn’t easy for amateurs to operate. Then again, you will have the man in the street going into very big, highlyregulated retail funds at £1,000 a time, so the property fund industry covers quite a broad church and a big range of vehicles. Residential funds in Europe and the US and many other parts of the world are a very mainstream asset
changing quite rapidly now. Regulation has increased in the past decade, as with anything finance-related everywhere in the world. The upside is that all the legal constraints to owning property can be quite challenging for smaller investors, pushing them in the direction of a fund where someone else has legal responsibility for the gas safety checks and the stuff that can keep you awake at night. There has been a change in use of some property – less demand for retail in secondary or smaller towns for example – but then again, within the logistics and delivery sector there is increased demand. While more people may work from home, they still need a base; it just doesn’t work if you are all wired up and on conference calls. It’s an evolution, but there is still demand and that’s one of the challenges you have to keep ahead of in this game.
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people were starting to take up the opportunities in the asset class much as they are now. Sure, people have concerns today and need to see rental growth, but in terms of market fundamentals it’s remarkably similar. The big difference is the huge number of international transactions today. How global is it? If you wind the clock back 10 years, I don’t think you could disassociate how the UK property market worked from how the funds market worked. They were intrinsically linked – and both funds and the commercial property market would be very UK-centric. It was very rare for UK investors to venture overseas. Since then this has changed to the extent that it is now very commonplace for UK investors to be looking for returns overseas, though they tend to be quite cautious about doing so – the market overseas can be less easy to operate in terms of liquidity and
43
10 YEARS OF OPP Technology
Technology Francine Carrel francine.carrel@opp-connect.com
S
ince air travel took off (sorry) – since the advent of safer sea voyages, even – the oftrepeated phrase has been that the world has got smaller. Information that once took months to travel between continents took weeks, days; eventually, hours. In the last decade, though,
of people with useful content or mundane gibberish, depending on your social media guy. Especially useful for those of us working cross-borders has been the introduction of Voiceover Internet Protocol (VoIP), which enabled invaluable tools such as Skype. The way we browse the web has
impressive concept of augmented reality. What started out as a set of cool gimmicks at exhibitions is turning out to be seriously interesting to property professionals. You can print a brochure that, when scanned with a certain app, will come to life – allowing potential partners or
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EVERYONE WHO DOES BUSINESS IS AWARE OF THE POWER OF THE INTERNET
44
even hours became an archaic measurement. A piece of wisdom or warning can now be passed throughout the business community – and, more dangerously, through the public’s newsfeed – in a matter of minutes, depending how well it’s packaged. Though the internet was around in 2004, it was pretty different: Facebook had only just started up, Google wasn’t a verb yet and apparently people still used Lycos (I had to Google that). YouTube and Twitter didn’t exist. A lack of Instagram filters meant that pasty people stayed that way. Now, everyone who does business is aware of the power of the internet. “Going viral” can be a blessing or a curse. YouTube’s meteoric rise has completely transformed the way we access video content. LinkedIn provided us with interactive CVs. Twitter lets us update thousands
also changed dramatically. Apple launched the first iPhone in 2007, ushering in an era of touchscreen smartphones and tablets. Widespread 2G, 3G and now 4G means that you’re seldom without at least some internet access. People browse property portals before even getting out of bed. Apps have been developed that use GPS to help house-hunters figure out which properties are for sale as they walk down a street. All this from a handheld device! The production of Google Glass means that, in a step further towards total integration, people will soon be walking around with the internet on their face. The ability to record whatever you see is going to be very useful to developers (live updates from onsite) and agents (enabling walkthroughs without having to ship a customer out). Tying into this is the increasingly
customers to view a development in 3D. Linked to Google Glass, Geo Location Augmented Reality could take property portals to the next level as available units highlight themselves before a user’s eyes. Moving into more solid territory, 3D printing has been a boon to architects and developers – it’s cheaper and quicker than traditional model making. There have even been experiments printing out sections of housing. The development of drone photography has allowed beautiful sweeping footage of a property or effective surveying of a potential site. Several companies have also produced cameras that can scan a room and produce a 3D model. Property professionals have seized every one of these new technologies and used them creatively and profitably. Who knows what the industry will be taking advantage of by 2024?
10 YEARS OF OPP Developments We Have Loved
10 years of stunning homes Resorts TUSCANA This $100million Orlando resort was developed by Feltrim and featured on A Place in the Sun in 2012. It has 290 two- and threebedroom condos and features amenities from swimming pools to spa services. In the last three years, Tuscana has achieved occupancy of over 75% each year. www.feltriminternational.com/ listings/tuscana-resort
ALL THE USUAL FACILITIES PLUS SOME MORE UNUSUAL ADDITIONS LIKE A HONEY FARM
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TAMBABA RESORT This resort in Joao Pessoa secured Invest in Brazil the gold OPP Award for Excellence – Best Developer International – in 2010. It has custom villas ranging from the simple single-storey Villa Picasso to a more stately- four-bedroom Villa Dali. All the usual facilities plus interesting additions such as a multi-faith worship area and natural flower honey farm. ww.tambaba-resort.co.uk
46
51º SPA RESIDENCES Perched in Switzerland’s Valais region, this project is named after the highest temperature of the thermal water for which the area is known. Residents can enjoy in-home thermal spas and wrap-around terraces, as well as a “private wine cave”. Swiss Development Group worked with Marc Michaels Interior Design on the development. www.51degrees.ch
SEPTEMBER 2014 MELIÃ TORTUGA BEACH The Resort Group Plc’s first venture into Cape Verde (they now have four projects completed or ongoing) boasts 286 hotel suites, apartments and villas. Beach bars and grills right by the water make for a stunning view of the sunset. www.tortugabeachresort.com SONG SAA The private island of Song Saa, Cambodia, saw its first phase sell out in two months. It manages to combine luxury and sustainability – the smaller of the two islands contains 27 villas, while the larger is home to a sanctuary for flora and fauna. The views are superb and the over-water restaurant, serving Khmer cuisine, is a quirky highlight.
City life 432 PARK AVENUE Construction started in 2012 under developers CIM Group and Macklowe properties. When completed (mid-2015), this New York behemoth will be the tallest residential tower in the Western hemisphere, standing at 426.11m and comprising 84 stories. Residences range from studio flats to a massive six-bed penthouse with a library. www.432parkavenue.com SANS SOUCI HOTEL & RESIDENCES Originally constructed in 1871, this Vienna building was transformed by Yoo and Norbert Winkelmayer into a hotel including 15 luxury residences. The style is “30s retro” and the price tags are extravagant (apartments started at €500,000 for a one-bed) but Yoo’s reputation made them a sure-seller. www.sanssouci-wien.com
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BURJ KHALIFA The Burj Khalifa is the world’s tallest manmade structure. Ground broke in 2004 and, though its construction was delayed due to Dubai’s catastrophic crash, it received a host of awards upon completion in 2010. The tower holds 900 apartments as well as offices, restaurants and swimming pools. www.burjkhalifa.ae
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10 YEARS OF OPP Developments We Have Loved TURNING TORSO Turning Torso, in Malmö, Sweden, is the tallest building in Scandinavia at 190 metres and 54 storeys. Designed by Spanish architect Santiago Calatrava, it is based on a sculpture of the same name. It contains 147 apartments with around-the-clock concierge service. A similar structure, though taller, is the Cayan Tower in Dubai. www.turningtorso.se
Grand Designs THE PALM JUMEIRAH Instantly recognizable, this artificial archipelago was created by land reclamation in Dubai. Developer Nakheel, which is owned by the UAE government, announced the handover of the first residential units in 2006. Controversy surrounded the project during crisis-caused delays and the difficulties of construction. www.jumeirah.com
THE PALM JUMEIRAH BY NAKHEEL WAS CREATED BY LAND RECLAMATION ELIT GRAND PALAS In development by Delmar Construction Company, in Kurtköy, Istanbul. Winner of the 2012 International Property Awards’ “Best international architecture multiple residence” award, this project will have 532 apartments and a massive 4,500sqft inner courtyard as well as a sauna and swimming pools. www.elitgrandpalas.com
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Something different
48
ZANDSPRUIT Zanspruit have brought luxury into the wilderness with their range of build-to-order, customizable homes near Johannesburg. They picked up two gold OPP Awards for Excellence – Best Developer Africa and Best Affordable Developer – in 2013. Homeowners can look forward to seeing giraffes and zebra in the untouched safari estate. www.zandspruit.co.za
SEPTEMBER 2014 Water Tower of Living This 1931 water tower in Soest, the Netherlands, was converted into a modern home in 2004. Dutch architects Zecc Architecen, won great reviews from industry professionals for this unique development, which spans nine storeys. The interior design is industrial but modern, with a lot of steel, concrete and glass. www.zecc.nl
THE INTERIOR DESIGN IS INDUSTRIAL BUT MODERN, WITH A LOT OF STEEL AND GLASS VM APARTMENTS The VM apartments in Copenhagen, Denmark, were designed by JDS Architects and Bjarke Ingels group. The two buildings, built in the shape of a ‘V’ and an ‘M’, have a combined 230 apartments, all designed to catch the sunlight. Completed in 2005, the project is a little jarring to look at – but those balconies were designed to give each resident light, privacy and views. Additionally, the corridors in the building are short and receive light from both ends, like bullet-holes. www.jdsa.eu
CONTAINER APARTMENTS ARE BECOMING COMMON FOR AFFORDABLE HOUSING
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CITÉ A DOCKS Designed by Cattani Architects, these 100 apartments are made from recycled shipping containers. The student housing, in Le Havre, France, has minimalist interior design but added insulation and soundproofing. This architectural trend is becoming more common as many countries clamour for affordable housing – another nice example is Keetwonen in Amsterdam, which is the world’s biggest container city. Completed in 2006, Cité a Docks has also been popular with students, most of whom have reported good value for money and decent insulation.
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LOOKING FOR A PROVEN & SECURE OPPORTUNITY FOR YOUR CLIENTS? ECOHOUSE GROUP ARE PROUD TO INTRODUCE THEIR LATEST DEVELOPMENT UNDER THE WELL KNOWN GOVERNMENT BACKED PROGRAM - MINHA CASA, MINHA VIDA (MY HOUSE, MY LIFE). Low entry level investment from £21,000 • Market-leading yields of up to 17.5% per annum • Capital plus returns paid in just 12 months • Funds secured through escrow facility managed by independent lawyers • Fixed exit strategy • Smart and secure opportunity with award winning developer. We take pride in our client relations and provide our Agents with a dedicated Agent Manger, full product training given, full due diligence pack with support documents and contract samples and top quality white label marketing material, including web banner, mailers and brochures. FOR A BROCHURE AND MORE INFORMATION, SPEAK TO ONE OF OUR SPECIALISTS TODAY.
T. +44 (0) 203 540 2200 E. info@ecohousegroup.com W. www.ecohousegroup.com
MORTGAGES Italy
Mortgages in Italy Can a foreigner obtain a mortgage in Italy? Type of mortgage
Available
Interest rates from
Max LTV
Lending
Maximum term (Years)
Maximum age at repayment
Repayment
Yes
3.1%
80 %
From €100K
25 years
70
Yes
4.85%
70 %
From €100K
20 years
70
Yes
2.65%
80 %
From €100K
25 years
70
Yes
4.85%
70 %
From €100K
20 years
70
No
N/A
N/A
N/A
N/A
N/A
Purchase
Yes
2.65%
80 %
From €100K
25 years
70
Remortgage
No
N/A
N/A
N/A
N/A
N/A
Equity Release
No
N/A
N/A
N/A
N/A
N/A
Buy to let (assessed on rental income)
No
N/A
N/A
N/A
N/A
N/A
Self Certified
No
N/A
N/A
N/A
N/A
N/A
Fixed Interest Variable Interest Hybrid (part fixed, part variable) Interest only
What is the lending criteria?
This depends on the individual mortgage provider. However, typical lender requirements for Italian mortgages can be found below: Affordability requirements: The cost of the applicant’s existing liabilities and new mortgage should not exceed 30% - 45% of their gross income. Employment history: Minimum three months required. Self employed history: Minimum 24 months required. Regions accepted: All Italian regions considered. Property types accepted: Freehold properties only. Applicants accepted: All nationalities considered. These mortgages are only available to individuals.
Further information
Currency options for mortgage payments: Euros only. Some lenders will require you to open up a bank account with them in order to make the mortgage payments. Securing a mortgage offer can typically take between four and six weeks.
www.opp-connect.com/ category/data-and-reports
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The OPP monthly mortgage report is brought to you by Connect Overseas, international mortgage advisers. They are based in the UK but deal with mortgages in over 50 different countries around the world. See www.connectoverseas.co.uk. They can be contacted by email at info@connectoverseas.co.uk or by telephone on +44 (0)1708 676134.
This guide was accurate at the time of production.The mortgage market changes all the time. For more industry reports see:
51
Agents needed to sell best property deals in Portugal!
PGI Portugal have a number of exclusive projects to sell in the Algarve and Lisbon directly from the banks and developers. Through our relationships with the bank’s top administrators, we have negotiated exclusive conditions to ensure that the clients are presented with the best financed deals on the market! The banks have also recommended us to various developers to help sell their products, in most cases with the bank providing special conditions to assist. PGI Portugal are now looking for good agent partners who are active, hard working and professional and who would like to participate in a very positive and exciting market. Buy for €6k
Up to 100% mortgages
A summary of buying conditions for the clients…
w Genuine discounted prices of up to 50% off market peak prices w Up to 100% mortgages w Buy a property with just €6,000 w Mortgage rates fixed at 2.75% for 5 years w Properties from €99k
50% discounts
w Fully furnished opportunities w Algarve and Lisbon properties w Golden Visa residency scheme in place w Top lawyers and fiscal advisors
BE A PGI AGENT! CONTACT US NOW! T: +44 (0)333 8000 008 E: enquiries@propertyglobalinvestments.com W: www.propertyglobalinvestments.com
FX REPORT Chinese renmimbi Words | Charles Purdy, Director of Smart Currency
Chinese renmimbi W
hat a difference a year makes. Since the 2007 financial crisis the trajectory of the Chinese renminbi had been largely one way against sterling, with sterling losing over 40%. But since our comment on the renminbi last year, the trend has reversed and we have seen sterling gain nearly 15%. Admittedly there has been some sterling weakness in the last month or so but this is a remarkable turnaround after so many years of “sorrow”. There seem to be two key reasons for this. The UK economy has taken a turn for the better with growth approaching 3% on an annualised basis, inflation pushing up towards the Bank of England’s target rate of 2%, unemployment falling towards 6% and there even being talk of increasing UK interest rates soon. It’s a similar story for the US dollar. The second is that this contrasts favourably with what is happening in China. Although China’s economies’ growth rates exceed those of the UK and the US, there are worries that growth in China
USD per CNY
is not as robust as it has been and that there needs to be a rebasing of the economy away from one led by high levels of capital expenditure to one focused more on consumer spending. Another key development is that the Chinese are slowly but surely developing the renminbi as a freely tradable currency. This is not going to be a quick process but the first steps have been taken, with London being selected as a key financial centre for holding offshore renminbi. We have also seen a significant increase in the number of companies that can receive renminbi payments in China. So what does this mean for the renminbi? Shorter-term I don’t see either sterling or the US dollar
A key development is that the Chinese are developing the renminbi as a freely tradable currency appreciating or depreciating that much against the renminbi as the UK and US economy’s return to normality. Longer-term, most commentators still see the renminbi as being overvalued; which would mean that as the renminbi does become more freely tradable we should see the renminbi appreciate against both the US dollar and against sterling.
Get your live quote today or discuss your property business and impact of the foreign exchange – call the partnership team at Smart Currency on +44 (0)207 898 0541
GBP per CNY
EUR per CNY www.opp-connect.com
53
BUSINESS Terrible photographs
Words | Christopher Nye
Terrible Real Estate Photos
Andy Donaldson Author and blogger terriblerealestateagentphotos.com
Andy Donaldson’s blog, Terrible Estate Agent Photos, is what the internet was invented for; and now it is a book. You have to wonder, what are some of our fellow professionals on?
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How did it start?
54
Like most people in London, I have stayed in endless flats and about three years ago I was spending much more time on property websites. and kept coming across these photographs which were making me and my partner laugh. We starting sharing them with friends on Facebook and they got a good reaction so I started a blog. Within a month it went viral and I was reading about it in mainstream newspapers. It just tapped into a common experience. Now that we are all looking for properties online we
are more reliant on an estate agent’s ability to take photographs and we are coming across these
I get images sent from all over the world... I have to stress that they are all genuine listings horrendous images that don’t say anything about the property itself, or bizarre images where
they haven’t given the family long enough to clear out of the way, or there is an animal in the photograph. Now I get images sent from all over the world and I have to stress that they are all real photos from genuine listings.
Which countries are the worst? The UK and US are the richest sources but Ireland and France send in the weirdest images. And I have had quite a few from Kazakhstan, where people spend a lot of money on their properties with varying results, shall we say.
SEPTEMBER 2014
1.
2.
3.
Which country has most toilets in living rooms?
4.
This is a photograph of what I can only describe as a domestic horse.
France.
What’s your favourite? That has to be the horse, it was just incredible. That was from a farmstead in Ireland – evidently they just let the horse roam free and that included roaming into the kitchen while they were taking the photograph.
What is agents’ biggest sin?
Design trend: Kitchens are increasingly being built to accommodate those of us with particularly fast metabolisms. It has never been more important to wash your hands before preparing food. If the agent had subsequently decided to open the attic hatch, one suspects the following few seconds would have been spectacular.
Has a photo made you want to call the police? Yes! I was sent a photo of what was clearly a large and successful cannabis farm in someone’s house, and the agent had just taken a photo of it and listed it because he clearly didn’t know what it was. But a newspaper got there first. I also get a lot of images sent in that feature sex toys in bedrooms. For reasons of decency I don’t publish those.
Terrible Estate Agent Photos by Andy Donaldson is published by Square Peg, £8.99
www.opp-connect.com
Where no one has taken any care at all. Unmade beds, clothes on the floor, people wandering into shot, filth, that sort of thing. It really doesn’t take long to tidy something up. Also, people who take pictures of themselves inadvertently. How difficult can it be just to briefly check the digital image? Then there are the ones who, with no training, try to be creative with a house that isn’t very nice and create photographs that are bizarre rather than attractive, like putting lipstick on a pig.
For Sale. Owner last seen removing his jeans before jumping out the window.
55
BUSINESS High Concept
Global rentals This month’s new business concept aims to rewrite the rules of vacation rentals with their platform CEO Thors
THIS MONTH: Weholi
ten Wietin
g
The elevator pitch: Part of the attraction of owning a second or third home is earning back some revenue from that property. Weholi is a model that allows people with vacation ownership to rent/exchange or sell it globally, without booking fees or commission.
How will that help our readers? Firstly, it will help real estate agents to sell that advantage to their clients – that they can easily and cheaply sell the extra weeks they have available, supplement their income channels with Weholi without employing agents and third parties. For developers and resort owners we have a professional membership available.
How does it work? The person that owns the property pays no commission or charges on rental, but they do pay an annual membership – from €79 to €199 depending on the number of weeks, or number of properties they want to advertise. So if an overseas buyer owns a holiday home, and they want to rent it out for 10 weeks of the year, they would take out a platinum membership which would cost €199 and that is all they would pay. If a developer wanted to rent out 30 properties he would take a professional membership, but if a client who bought one of those properties wanted to use Weholi they would go on as a private member. The site is in English and German.
What do you offer above existing rental? The key is: there are no charges, booking fees, increased percentages or commissions, no middle man. So the income that you want to generate from your property? You will get 100% of that. The person booking your holiday home will book with you directly; and pay you directly. It is all transparent and very effective.
What kind of property? We want to be as discerning as we possibly can be, while offering realistic value for money and facilities for families. We have a verification process we go through when dealing with a resort, and when it’s a private owner we would have to base that on the feedback from our members who have stayed there. If we have received negative feedback we would remove the property.
What areas? Every area. It’s a global platform, which is a huge advantage to any property owners. Regardless of where they are in the world we will promote them globally and, with financial fluctuations, there are huge benefits. For example, we list properties in South Africa; the pound-rand-rate is very good, so a person in South Africa can rent it to someone in the UK and both will feel like they’re getting a really good deal.
Who are Weholi?
CEO Thorsten Wieting says: “ We had noticed a gap in the holiday ownership market, and we realised the needs of owners weren’t being fully met, hence we created Weholi. The shareconomy is huge in today’s market place and, as we know, with a new generation comes a new usage mentality, We wanted Weholi to be in synergy this, while offering a great user experience, and to assist in offering wonderful vacation opportunities to a global market place.” www.weholi.com, contact@weholi.ch
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The CEO and COO are a married couple, German and Swiss, from internet marketing and real estate backgrounds. We have been working on the platform for more than a year and launched in mid-August.
57
COUNTRY REPORT Mexico
Mexico
M
exico is a country of contrasts. Opulence and poverty are often neighbours; the landscape varies from dry desert to speciesrich forest. Its cities combine modernity and a great deal of history. The country’s culture has experienced a big transformation in the last few decades as more and more people become urbanized – nearly half the population now live in cities. But there’s still a big focus on tradition, even in business.
The food and drink, of course, enjoys worldwide fame. Tequila and tortillas have been successfully exported to the rest of the world, but for the real thing you still have to visit the country. Mexico has long been a prime destination for overseas buyers, especially from the US. The country became extremely popular with holiday-makers in the 50s/60s – to the extent that some parts of Northern Mexico almost felt like the States. As it became more popular it became more expensive, so Americans
started looking farther afield in South America, but they’re still buying extensively in Mexico. The country has experienced a lot of bad PR due to the regions infested by drug cartels and blighted by violence. Nearly 50,000 people have died in drug related violence since 2006. Despite this, there are plenty of areas in Mexico that are safe and desirable for foreign buyers, Towns like Lake Chapala (Jalisco) and Ensenada (Baja California) are particularly popular with retirees – safe, peaceful and with a good climate.
GEOGRAPHY MEXICO Sonora
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Monterrey
58
Centro Merida Mexico City
Area: 1,964,375sqm Similar to: Saudi Arabia, Indonesia Coastline: 9,330km Highest point: Pico de Orizaba, 5,636m Capital: Mexico City, population 88.5m Other cities: Ecatepec, Guadalajara, Puebla, Juarez, Tijuana (all around population 1.5m) Climate: Hot and humid, especially in coastal areas. Regions at a high altitude have more spring-like weather and become cool from December to March. The rainy season runs from May to September. Looks like: White-sanded beaches, cactus-studded deserts, snow-peaked mountains, urban sprawl – there’s a lot of variety.
SEPTEMBER 2014
THE ECONOMY GDP: $1.845 trillion (11th in the world) GDP per capita: $15,600 Inflation: 4% Tax as % of GDP: 21.9% Currency: Mexican peso
CORRUPTIONS PERCEPTION INDEX: 106 OF 177 COUNTRIES HUMAN DEVELOPMENT INDEX: 61 OF 71 COUNTRIES
EXCHANGE RATES:
EASE OF DOING BUSINESS INDEX: 53 of 189 countries Starting a business
48
Dealing with construction permits
40
US$1
MXN 12.97
Registering property
150
€1
MXN 17.66
Trading across borders
59
£1
MXN 22.19
Enforcing contracts
71
AU$1
MXN 12.19
Getting credit
42
CNY
MXN 2.1
Protecting investors
68
INR 1
MXN 0.21
USD / MXN 15
14
13
12
11
JAN 2004
JAN 2006
JAN 2008
JAN 2010
JAN 2012
JAN 2014
US dollar per Mexican peso has historically had a big effect on the number of Americans buying in the country. The peak of 14.33 pesos-to-the-dollar in 2009 came with a rise in US buyers – and the resurgence in 2011 did the same. The dollar is slightly down at the moment, but not significantly enough to seriously impact the market.
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10
59
COUNTRY REPORT Mexico
PEOPLE Population: 120,287,000 Urban population: 78% Population density: 58 per sqkm Average age: 27 Ages: 0-15: 30%, over 65: 6.9% Life expectancy: 75 Languages: Spanish only 92.7%, Spanish and indigenous languages 5.7%, indigenous only 0.8%, unspecified 0.8% Religion: Roman Catholic 82.7%, Pentecostal 1.6%, Jehovah’s Witnesses 1.4%, other Evangelical Churches 5%, other 1.9%, none 4.7%, unspecified 2.7% Politics: A federal republic. Dominated by three parties: the National Action Party (PAN), the Party of the Democratic Revolution (PRD) and the Institutional Revolutionary Party (PRI), currently in power under President Enrique Peña Nieto.
Tourism INTERNATIONAL TOURIST NUMBERS TOTAL INTERNATIONAL ARRIVALS IN 2013: 23.7MILLION 25
MILLIONS
20
1.4%
15 21.6
22.9
22.3
23.3
23.4
23.4
23.7
2007
2008
2009
2010
2011
2012
2013
10
05
00
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TOURISTS FROM COUNTRY OF ORIGIN
60
USA 55% CANADA 13.6% UK 3.5%
SPAIN 2.4% BRAZIL 2.3% OTHERS 23.2%
SEPTEMBER 2014
TRAVEL TIMES FLIGHT DURATIONS TO MEXICO CITY: Los Angeles
4 hours
New York
5 hours
Vancouver
6 hours
Rio de Janeiro
9.5 hours
London
11 hours
Paris
11 hours
Moscow
13 hours
Auckland
13.5 hours
Beijing
15 hours
Sydney
16 hours
Hong Kong
17 hours
Dubai
17.5 hours
Singapore
20 hours
Residential MARKET Groups:
Portals:
Association of Mexican Real Estate Professionals: www.ampi.org Mexican Resort Developers Association: www.amdetur.org.mx
Lamudi.com.mx AdondeVivir.com
Useful websites: Government of Mexico: www.directorio.gob.mx INEGI (Geographic, demographic and economic information): www.inegi.gob.mx Official tourism site: www.visitmexico.com
Residential Property Facts RESIDENTIAL PROPERTY FACTS $2,635
Rental Yield:
7.76%
Rent/month:
$2,045
Income Tax:
3.36%
Roundtrip Cost:
7.89%
Cap Gains Tax:
25.00%
Landlord and Tenant Law:
Pro-Tenant
Source: Global Property Guide
www.opp-connect.com
Price (sq.m):
61
COUNTRY REPORT Mexico
Property Developments Naucalpan Trevox 223 This project, which won Architizer’s A+ award for best residential low-rise, used a 40-year-old house as its base to create independent housing for each member of a family. Bronze Reflecta glass was used to prevent overheating and offer privacy. www.craftarquitectos.com San Jose del Cabo Puerto Los Cabos This 2,000-acre marina project contains a number of different types of villas, as well as beaches, golf courses and mountain views. A pedestrian village is due to start construction this year, and new villas are still going on the market. www.puetrolocabos.com Cancun Villa del Palmar Built in 2010, the Villa del Palmar comprises three towers of nine storeys, with 415 units – including suites, apartments and villas. It also has gourmet restaurants, plenty of pools and offers watersports activities. Particularly popular with American holiday makers. www.palmarcancun.com
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Housing market
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The Mexican housing market is a fairly stable one. Speculators don't drive prices up and, therefore, buyers seldom have to worry about the dramatic crashes that plague other parts of the world. Prices tend to rise only a little above inflation, in contrast to many Western nations. That doesn't mean it was unaffected by the global financial crash though – especially in the case of crossborders sales. Around 5% of residential property is owned by international buyers and the number rises to something more like 25% in touristic areas, particularly beachfront properties. The United States are by far the biggest overseas buyers of Mexican property, and their economic downfall led to a slump across the coastal areas favoured by "place in the sun" hunters. These areas are experiencing recovery, though, especially with the prospect of Article 27 being amended. If the amendment goes through, overseas buyers would be able to purchase property in coastal areas with far fewer restrictions – currently, international investors generally buy through trusts. Veracruz is a shining example of an improving coastal region, with sales increasing rapidly. Construction is a booming sector in the country, especially since 2013 saw the so-called "Norm 26" initiative launched in Mexico City with the objective of boosting affordable housing. Around 742,000 new units are expected to be built by 2025, providing an interesting opportunity for investors.
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LEGAL News
LEGAL News
The East needschanges to get Our Middle round-up of legal stricter, andbut Venezuela finds taxwhile hikesEgypt in Spain speedier struggle with newFrance regulations processes in US, and India BAHRAIN CHINA REDUCED REGISTRATION REGISTRATION LAW CHARGES DELAYED – AGAIN A much-anticipated on On 20 May, Bahrain’sregulation Shura real estate registration into China was Council ratifi ed a motion reduce not issued by the end of June 2014, charges for the registration of as wasacquired planned.real Local experts newly estate. Thetold the Global Times that the regulation amendment, bringing buyer’s would be from released bythe theproperty end of fee down 3% of this year at the earliest. news value to 2%, is hoped to The stimulate has come as a disappointment to real estate growth. those who were hoping that the Furthermore, an incentive new law would stabilize market designed to push buyersthe to pay and go some way to preventing quickly was approved – if the corruption, said local press. payment is made within 60 days The bill, which has been the buyer will receive a 15% discussedon since 2007, has been discount registration fees. amended several times as more [Source: Oxford Business Group, than 10 government departments www.oxfordbusinessgroup.com] are involved in the issue of property rights. China is currently aiming BRAZIL to roll out a unified property REGISTRATION FOREIGN registration system OF by 2016, making it fully operational by 2018. CAPITAL
CYPRUS MISINFORMATION SURROUNDS SETTLEMENT
activities, provided that they belong Bank will resolve their case toAlpha individuals or corporate entities may be inorfor disappointment, domiciled incorporated abroad.” said international property law Foreign capital must be experts Maxwell Alves. While a registered by means of an settlement has been reached in Electronic Statement of Registration some cases, the law firm says – Foreign Direct Investment Module that the “big publicity campaign” (RDE-IED), on the Central Bank on the case could be misleading. Information System (SISBACEN). settlement a For “The the purposes of involves the Electronic specific group which is not in Statement of Registration, foreign the same category as most direct investment is defi ned as other victims,” the firm said permanent holdings in Brazilian in a release. “Furthermore, companies or, in accordance with other claims about settlements common market practices, longreached appear to be no more term ownership by non-resident than a rehash of what been investors; individuals or has corporate going on for over a year now.” entities residing, domiciled or Maxwell Alves saidthrough the muchincorporated abroad, lauded case last month, which ownership of shares or stock in saw the High Court in England Brazilian companies, or investments Cypriotauthorized defenders to inarguing foreignwith companies Alpha Panareti and Alpha Bank operate in Brazil. over who had jurisdiction, The statement implies that ended with companies only Heads receiving of Terms the Brazilian of Agreement being reached. the investment and/or the This means only thatforeign they have representative of the agreed a way forward. investor are responsible It’s forbeen the hailed as a breakthrough in registration. [Reported by: Daniela negotiations but, saySolicitors, the firm, it’s Antunes, Maxwell Alves “hardly a breakthrough www.maxwellalves.com] for the thousands waiting”.
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According to the Foreign Capital Law, “Foreign capital is considered to be any goods, machinery or equipment that enters Brazil with no initial foreign exchange Thousands ofintended Cyprus-buying disbursement, for Britons expecting much production of goodsthat andthe services, publicized settlement between and any funds brought into the the Alpha claimants and country for Panareti use in economic
TO RENEW LICENSE A new property law aimed at
improving investors’ rights RERA, authority of looksthe setregulatory to be announced soon the Dubai Land Department (DLD) in Dubai. The long-awaited has passedlegislation a ruling stating Tanweer will bethat every broker must pass test of announced “soon”, saysthe Majida the Dubai Real Estate Institution Ali Rashed, the head of the Real (DREI) renewing their Real Estatebefore Investment Management Estate Brokerage License. and Promotion Centre of the
francine.carrel@opp-connect.com john.howell@opp-connect.com
More updates are available in our news section at www.opp-connect.com
Brokers were informed of the rule change an official notice Dubai Landvia Department (DLD). delivered to all agencies The industry has beenand waiting offices in Dubai. Thelaw letter said that 18 months for the to be RERA won’t be accepting renewal passed and legal experts gave requests unless thedraft application their views on the to the is sent in to them with the results of Land Department last year, the DREI test. reports the National website. No Brokers will have to available take the specifi c details were exam one month before but Ms Rashed says it istheir ready licenses expireexamined or be sentbyon a and is being mandatory course. The higher authorities. Thetest DLDcosts first AED 700 to take, while the course announced in October 2011 has anitenrollment fee of AED 2,500. that was employing experts to Registration for the test examine and improve theand real course be done throughlaw theby estatecan investor protection DREI website. the end of the year, but to date nothing has been finalized. [Reported by Adrian Bishop, Editor EGYPT of OPP Connect.]
GOOD NEWS FOR FOREIGN CAPITAL FRANCE CHANGE IN CAPITAL GAINS TAX
President Francois Hollande has announced a change in the capital gains tax system on second home sales to provide more fluidity in the French property market. The taper President Abdel Al-Sisi so relief system is toFattah be changed has issued an amendment that from 2014 the requiredtotime theownerships mortgage law which means of before a property that, for the first time, companies is completely exempt from capital with foreign will bedown able gains tax willcapital be 22 years, to provide mortgage finance in was from the 30 year system which Egypt. The amendment is being ratified in September 2012. introduced in a bidPartner to provide Nicholas Leach, at Athena more low-income housing the Advisors, commented, “Thisfor could country. According to the new law, be considered as a bit of a U-turn companies with foreign capital by the government, reverting towill besystem treated in theissame way those a which similar to as that with Egyptian capital. Presidential when Sarkozy was in power. Last spokesman Ihabtax Badawi toldput local year’s property changes
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DUBAI TANWEER LEGISLATION TO DUBAI BE ANNOUNCED BROKERS MUST TAKE EXAM
Lawyers and accountants around the world tell us about new developments in the law. If you know of any interesting changes to the law or taxation in the country where you live or do business, contact
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LEGAL News press that the move would be followed by measures allowing mortgage financing to become available for those who need it.
GREECE ILLEGAL AGENTS OUTNUMBER LEGAL
According to data from the Hellenic Federation of Realtors (OMASE), the number of illegal agents in Greece is actually higher than that of the legal ones. Official estate agents in the country number around 4,000, according to the organization, but there are an estimated 5,000 people working as agents without being properly registered. This means the state is losing out on millions of euros in tax, reported Kathimerini. The OMASE General Secretary Lefteris Potamoianos told the paper that the number of illegally operating property professionals had soared since the global financial crisis.
INDIA REVISED REGULATION BILL IMMINENT
organize public hearings and seminars over the summer, seeking input from the public. Premier Yihuah said that the MOF will submit an amendments bill for review by the cabinet by the end of 2014.
UK FCA MAY RESTRICT MORTGAGE CHANGES
TAIWAN PREMIER SEEKS FAIRER TAXATION
Taiwan will introduce real estate transaction tax reforms in a bid to “promote equitable taxation and social justice”, Premier Jiang Yi-huah said at a conference in Taipei. Under the country’s current system, capital gains from property transactions are taxed separately and calculated on the declared value of a property, which is based on the assessed value of the land alone – usually well below the unit’s actual worth. The profits will now be levied based on the market value of properties, and will be included in individual consolidated income. Premier Yi-huah noted that primary individual residences and farms would be excluded, and said that special rates could also be introduced, dependent on the length of ownership. The move comes as part of an effort to reduce speculative market activity and make housing more affordable in the Taipei area. The current ratio between home prices and annual income is 15:1 – the aim is to reduce it to 10:1. The Ministry of Finance will
The Financial Conduct Authority (FCA) is considering implementing restrictions on the changes lenders can make to mortgage contracts. The FCA is looking to assess the fairness of the current regulations. To that end it is now inviting stakeholders (including advisors) to suggest how the fairness should be assessed. The discussion paper, which is available to view at fca. org.uk, states: “We recognise that for the mortgage market to be sustainable there are valid reasons why firms build flexibility into their mortgage contracts and why they might seek to use that flexibility. “We are concerned, however, that in some instances consumers might not have been reasonably able to anticipate these changes when they took out their mortgage and that the proposed changes may, therefore, be unfair. “ The authority may also introduce new rules about the information that companies must provide to consumers. In August, the FCA upheld a ban on a former mortgage adviser and insurance broker from working in financial services after they discovered he had carried out a number of offences – including fraud. The FCA said this reflects its objective to provide appropriate consumer protection.
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The Indian government is set to bring out a revised real estate regulation bill, said Urban Development, Housing and Urban Poverty Alleviation Minister M. Vankaiah Naidu. The Minister has met with Confederation of Real Estate Developers’ Associations of India (CREDAI) and other industry
bodies to discuss the bill. He told reporters that, “The earlier bill has lapsed. I am now having interactions with real estate stakeholders and states also. We will incorporate their views and bring out a revised bill.” He didn’t elaborate on the bill’s details, however. The current Real Estate (Regulation and Development) Bill, 2013, was introduced by the UPA Government in August 2013, with the aim of protecting home buyers and creating a mechanism to settle disputes.
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Portugal Buying Guide, part of the Overseas Guides Company, is delighted to announce the opening of new offices in the Algarve, in partnership with Smart Currency Exchange. The Portuguese property market has been on the up recently, with a 60% increase in enquiries over the past quarter alone. The second in our growing network of international offices will offer dedicated onthe-ground resources for our business partners, with one- to-one guidance and expertise for your clients to buy safely in Portugal. Find out how we can help you grow your client base and help them buy successfully in Portugal. Email partners@overseasguidescompany.com or call 00 351 932 277 565.
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BUSINESS Exhibitions
OPPLive China Our Beijing show is being held at the China World Hotel on Thursday 23 October and Friday 24 October Registration open!
R
egistration for the inaugural OPPLive China overseas property business-tobusiness show in Beijing opened on 19 August. There’s not long until the event, so visit www.oppconnect.com/register-4/
Get in the know Our seminar programme is extensive and includes sessions for both exhibitors and Chinese agents – all of them in both Madarin and English. John Howell, editorial director of OPP,
announced: “The day before OPPLive, we are running a special seminar programme for our exhibitors to help them get the most out of their time in China. We will be covering such vital topics as ‘overcoming the cultural barriers to doing business in China’ and ‘marketing successfully to the Chinese’.”
Pinnacle presents Already well-known across Asia, Pinnacle MC Global will be showing off a new product in Beijing: Angelgate, a development in the heart of Manchester, UK. The 344 luxury apartments, aimed at the buy-to-let market, look likely to appeal to Chinese agents. “It’s obviously very exciting
to move into a new area,” they told OPP, “we look forward to continuing our work in this exciting region.” www.pinnaclemcglobal.com www.angelgatemanchester.com
Mina masterminds meetings Take advantage of our exclusive Meeting Bureau. Mina Mu, marketing and operation executive at OPP, explained: “It’s so important to meet the right people, the decision makers, when expanding to a new country. We make sure that your time and expense has gone to the best use by organising these meetings before the show, meaning you’ll be making the most useful, profitable contacts you can.”
OPPLive London Our long-established London exhibition will take place at Novotel London West on 27-28 November 2014
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D
Glamour and glitz If you’re coming to OPPLive London, there’s a good chance you’ll be attending the lavish Gala Dinner, at which we’ll be celebrating the best and most innovative in our industry
Network and learn As always, OPPLive will be the perfect opportunity to connect with other decision-makers in the overseas property industry – and the best place to catch up with the issues that affect our sector.
John Howell says, “Probably the two most vital items on a packed seminar programme are a session about the rapidly changing international rules on data protection (and their impacts on electronic direct mail) and the lunchtime debate on sustainability.”
from feltrim... Feltrim will be showcasing their Tuscany Preserve development in Central Florida. The gated community of 500 homes also features a clubhouse with a gym, tennis courts, basketball courts and a swimming pool. Two-bed units start at $154k; three-beds from $185k; four-beds from $220k. www.feltrimgroup.com
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on’t forget to register for OPPLive London 2014 – visit www.opp-connect.com/ opplive to sign up now. Registration numbers are already streaming in, and the numbers don’t look like they’re slowing down.
by presenting the OPP Awards for Excellence. This year, it’s even more convenient; the Gala Dinner will be under the same roof as the exhibition. Reuben Gurunlian, sales manager at OPP, said, “This year we’ve got even more entrants than usual. The calibre of the entries will make for an exciting competition – and some hard decisions for our independent judges.” www.opp-connect.com/about-theawards
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EVENTS Preview
Two special events Usually we focus on exhibitions and events with mass appeal. This month, we also bring you two unusual, important, but more specialized events Property Portal Watch Conference & Masterclass Where: Barcelona When: 1 – 3 October 2014 Two events in one, from the brilliant team at Property Portal Watch. The 13th Property Portal Watch European Conference will be held in Barcelona from 1-3 October 2014. If you really want to understand how portals work, what they can do for you and what their future holds, this conference is for you. At this conference you will have the opportunity to meet 200-300 of the world leaders in the field of portals, to network and to learn huge amounts about how portals are (and will be) changing our future. The theme of the conference is highly relevant to many of us: “What’s next for property portals?”. The seminar programme, with some top-notch speakers, threatens to inform and inspire in equal measure. As if this wasn’t enough, the day before the conference (30 September) Property Portal Watch is
Simon Baker, founder of Property Portal Watch running its first masterclass. Run by property portal guru Simon Baker, this will look in depth at three of the main operational issues in this sector - industry sales & marketing, consumer sales and product development. €850 for both events, €600 for just the conference. www.propertyportalwatch.com
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FIABCI Young Members Conference
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Where: Bochum, Germany When: 26-28 September 2014 FIABCI – the international association of real estate professionals – has a student section. FIABCI is an organisation offering a unique combination of solid training and learning opportunities and the chance to network with other professionals around the world. Joining as a student (someone in full time education studying a real estate related course at a university or college) gives a number of benefits including very cheap membership, access to the FIABCI scholarship fund for study aid, the opportunity to take part in international work placements and the opportunity to attend the special FIABCI student conferences and events. This FIABCI conference is designed, as they put it, “To allow students to learn about real estate business in other countries, to exchange information, to socialize and to enhance international networks”. The conference, to be held at the EBZ Business School in Bochum, Germany is organised by FIABCI Deutschland but it is open to all students who are FIABCI members and will be run in English.
industry owned in the en -r ld or w e ar FIABCI
This is an event where the networking opportunities are as important as the formal sessions but the seminar programme contains much of interest, including an introduction to the local real estate market, an update about innovative IT solutions and presentations from students themselves. Cost of the conference: two nights with full board/ single room: €128 per person. Two nights with full board/double room at €98 per person Contact: www.fiabci.org or tel:+33 201 73 79 58 32.
EVENTS Preview
Where will you be? Real estate events of September & October 2014 Investir USA Expo RIO DE JANEIRO
millionaires in China – and OPPs have started tapping into the market more and more. The show will take up 3,000sqm, with 100-120 exhibitors and an expected total of 35,000 visitors, of which 5,000 will be invitationonly Very High Net Worth Individuals. www.beijingexhibition.com
Second Home International Belgium
Investir USA Expo, at Transamerica Prime Barra, 395 Av. Gastão Senges, Barra da Tijuca, Rio de Janeiro, begins with a business-tobusiness welcome reception on 8 September, before the show officially opens. The third show includes 20+ exhibition spots for USA real estate companies, immigration attorneys, banks, mortgage, tax law and accountancy, builders and more. More than 2,000 attendees are expected, nearly half of whom will be real estate professionals looking for networking opportunities. 25% of consumers are looking to spend up to $200k on real estate, while 5% are after something more impressive with a budget of $1million plus. www.invertirusaexpo.com
09-10 SEPT
GRI Europe Summit
INTERCONTINENTAL PARIS LE GRAND 17-18 GRI Club Meetings bring together senior real estate investors, lenders and developers to SEPT network, find partnerships and do business. Each event hosts intimate group discussions in which everyone is invited to participate on an equal basis. The Europe Summit 2014, in Paris, has an impressive list of confirmed participants including the MDs of Wells Fargo, Pramerica, Hypothekenbank and Goldman Sachs. Discussion topics include the current optimism in European real estate – and whether it will last – and sustainability and energy efficiency. www.globalrealestate.org/europe2014
BEIJING EXHIBITION CENTER 18-21 The Beijing International Property Expo is the biggest international property event in north SEPT China, according to the organizers. They target wealthy Chinese investors, offering up real estate, land and immigration investment projects. As the website points out, there are currently around 180,000
The International Property Show
SANDOWN PARK RACECOURSE 27-28 The International Property Show is a UK consumer-based exhibition established in SEPT 1995. Though focusing mainly on the traditional markets of Spain, France, Portugal and Cyprus, the show will also make room for developments from Dubai and South-East Asia – as well as some domestic properties. Visitors can talk to experts to get guidance on buying abroad, and take advantage of discounted flights for inspection trips. For exhibitors, an impressive marketing plan is in place and there will be plenty of opportunities to network. www.internationalpropertyshow.com
A Place in the Sun Live
BIRMINGHAM NEC 03-05 The well-known British exhibition is back in Birmingham this October. Organisers, who OCT had a successful spring show at the London Olympia with over 6,000 visitors, are expecting over 5,500 at their slightly smaller autumn event. The visitor profile shows an average budget of £164k, with an encouraging 92% of visitors planning to buy within 24 months. Over 150 exhibitors will be attending, showcasing properties from £20,000 to over £1million, they say. As usual, the exhibition will include pavilions/zones for France, Florida, Italy and Portugal, with specialised
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Beijing International Property Expo
BRUSSELS EXPO 26-27 The Second Home International shows focus on the over-40s market, usually dual-income SEPT families with grown-up children. Although, as the name suggests, they mainly tap into the second home market, the organizers have also started looking more to permanent emigrants and investors. The traditional markets of France, Spain, Italy, Portugal and Turkey did well – as expected – last year and it’s likely that Spain in particular will excel this autumn as exhibitors gear up to showcase discount properties. The United States has also seen a rise in interest from Belgian buyers and it will be interesting to see whether that trend continues this year. www.secondhome-expo.be
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EVENTS Preview buying advice. For the property professional, this is one of the UK’s top chances to network with others from the industry and get a feel for the market. www.aplaceinthesun.com/exhibition
Second Home International
JAARBEURS UTRECHT targeted at the over-40s market, this 03-05 Largely Netherlands show usually attracts a OCT healthy audience of keen second-home buyers. Property professionals attending will include local and international property agents, holiday home developers, banks and insurance companies. Visitor profile: Average amount of investment is €229,000 38% of visitors plan buying within one year 75% earn two times above the (Dutch) average income 63% buy a second home for holidays 41% buy a second home for rental purposes 30% buy a second home for permanent living 23% buy a second home for investment Top 5 most popular countries: 34% France, 30% Spain, 22% Italy, 17% Germany, 15% The Netherlands www.secondhome.nl
Asia Pacific Tourism Destination Investment Conference
SUNTEC, SINGAPORE 21-23 These conferences gather stakeholders in tourist destinations to discuss the best OCT practices in “destination master planning”. The programme explores policy incentives, strategies and partnerships to encourage infrastructure development, concept creation and accommodation planning for upcoming destinations. It also features major development projects in Asia that are investment ready. Attendees will include real estate professionals from most walks of the industry, as well as urban planning authorities, airlines and hotel brands. The Singapore event is expecting 500 attendees. www.ihif.com
OPPLive China, 23-24 October, 2014
The Property Investor Show
EXCEL, LONDON two busy days at the ExCeL exhibition 10-11 Over centre, a large visitor audience – comprising OCT private buyers of UK and international property, portfolio landlords and property industry professionals will gather under one roof. Around 40% of the exhibition is dedicated to international property – from Spain and the US to Mauritius and the Far East. Some of the leading names in UK and international property will be attending. In addition to the traditional bricks and mortar, the Property Investor Show has an array of alternative investments, FX companies and landlord services. More than 100 exhibitors are expected and there will be around 70 seminars on varied topics. www.propertyinvestor.co.uk/london
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Moscow Overseas Property & Investment Show
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TISHINKA EXHIBITION CENTRE The Moscow Overseas Propetry & Investment 10-11 Show, run by aiGroup, was launched in 2007 OCT and has since seen great success in its twiceyearly exhibitions. Around 190 developers, agents, brokers, banks and management companies will exhibit products from close to 40 countries in the 2014 autumn exhibition. The Bulgarian Property Salon is a special event within the show, which aims to arrange direct contact between potential investors into Bulgarian real estate with the product providers. There will be 60 exhibitors in this section alone, with a lot of holiday homes complimented by golf resorts and some commercial property. www.investshow.ru
CHINA WORLD HOTEL, BEIJING OPPLive has been bringing together the top names in the international property industry since 2005. In that time the event has led to countless business partnerships and profitable opportunities for its delegates and exhibitors. OPPLive China 2014 will attract property agents, emigration agents, developers, financial advisors and other industry professionals from China who want to meet and do business with other agents, developers and professionals from around the world. This year, the main focus of OPPLive China is on helping visitors get a fuller understanding of the overseas investment environment and international immigration policies – plus the real estate products available to meet their clients’ needs. Exhibitors will have the opportunity of displaying their projects, promoting their company and talking to key decision makers in companies keen to help them sell. Plus, they will learn about some of the cultural, practical and legal issues involved in doing business in China. For both local and international visitors, there will be invaluable formal and informal networking opportunities and a large-scale conference dedicated to helping them begin or increase their international business operations. www.opp-connect.com/opplive-china
THE BUYERS ARE BACK, BUT ARE YOU READY FOR THEM? This October and November, OPP brings you TWO global B2B property shows
23RD & 24TH OCTOBER 2014
27TH & 28TH NOVEMBER 2014
/// CHINA WORLD HOTEL, BEIJING
/// NOVOTEL LONDON WEST
We all know about the incredible opportunity to sell property to Chinese buyers, but we also know it can be a hard place to do business. OPPLive China is the shortcut to market for developers to find Asian agents.
OPPLive London is dedicated solely to those involved in the industry. The show is aimed at developers seeking agents, master agents seeking sub-agents and people wanting to sell residential real estate.
We are confident we can beat even the success of our Singapore show in April, which attracted 1,000+ professional visitors over two days. OPPLive China will include a large-scale conference, a full seminar programme in Chinese and English, plus innovative networking opportunities.
Register today for your complimentary ticket. Info below GO TO WWW.OPP-CONNECT.COM/REGISTER-4/ AND USE PROMO CODE CHINA14
London will also include a large-scale conference, packed with informative and entertaining seminars from top-level speakers, to help international companies increase or begin their business operations.
Register today for your complimentary ticket. Info below GO TO WWW.OPP-CONNECT.COM/LONDON14/ AND USE PROMO CODE WEB14
TO BOOK A STAND AT EITHER EXHIBITION PLEASE CONTACT REUBEN GURUNLIAN:
+44 (0)203 540 2224 reuben.gurunlian@richmondgreengroup.com
Why choose SouFun International?
We are the No. 1 overseas real estate platform in China. You want another reason? We cover 30 countries and regions USA, Australia, Canada, Germany, Malaysia, Britain, Japan, Spain‌ We serve over 200 developers and real estate companies SouFun is devoted to building a one-stop platform for the purchase of overseas property
We are here for you | Contact us now: word.soufun.com
+86-400-890-0000 Ext.197145
usmarket@soufun.com
E Block, 5th Building, Hanwei International Plaza, Fengtai District, Beijing, P.R. China 100070
BUSINESS Benchmarking survey
OPP business healthcheck The annual OPP benchmarking survey: where we can all discover how the industry is performing Time to blow your own trumpet (or not!)
W
e’re no strangers to data at OPP. Our team of writers keeps tabs and reports on property price changes, transaction volumes, asking prices, prices per-square-metre (and foot), land prices, build costs, tourist numbers and quality of life indexes, in dozens of countries, regions, cities and resorts, by the month, the Q, the H and the
Silence is not golden. It’s lethal. We need to know how our industry is performing
How it works You go to www.opp-connect. com and follow the link to OPP business health check. Your underling/intern/spouse makes you a nice cup of tea (UK) or coffee (elsewhere) You spend 10-15 minutes filling it in You get a code to receive this magazine free for three months You are entered into a competition to win a free ad page in this magazine, worth £2,050. After the closing date you get the full report into how the overseas property industry is operating globally. Why should you go to the trouble of filling it in? Because
otherwise you won’t get the full report and you will not be able to compare your performance against others. Data we collect covers business confidence, staffing, salaries for all areas of the business, profits, commissions, licensing, how far regulations are being followed, where clients are coming from, what they’re spending. From it, we can build up a picture of how successful agents from countries A to Z are, in selling property in countries 1 to 100, to customers from Melbourne to Manchester. A big industry needs big data.
One company that enters will be selected at random by the computer to receive a full page advert in this magazine, worth £2,050.
Random data from last year’s survey: 60% of a salesperson’s income came from commission 75% said they’d be employing more staff next year Only 8% had over 100 employees More than 25% did NOT have all of the qualifications and licenses needed to do their work! 77% expected better sales numbers this year
www.opp-connect.com
annum. Let’s just say, if data was music we would have a brass band playing in our office, all day. Yet when it comes to data about our own industry... ...the not so sweet sound of silence. Silence is not golden, it’s lethal. We need to know how our industry is performing as a whole. Wouldn’t it be useful to know how
your business is doing compared to your competitors? Are you paying too much or too little to your staff? Are you the only sucker following the regulations? Do other firms have the confidence to take on more staff? How much are they paying themselves? Are companies opening in new countries? Which ones? Where are the buyers coming from? What sort of profits are they making?
All results are kept in the strictest confidence. The reports we produce will only contain anonymous data
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BUSINESS Next month
Coming next month in BUSINESS
AROUND THE WORLD
… SELLING
DESIGN
South Korea
Where to advertise
Golf course design
Selling to Millennials
We take an in-depth look at one of Asia’s biggest success stories – who buys there, where, why and when?
Advertising has undergone about as much of a transformation as property in recent years. So where are we now? Internet, social media, print or good old TV?
The advantages and implications of including a golf course in your development. What do they cost, what do they add and what is a signature course exactly?
The generation that came of age around 2000 is struggling to get on the property ladder, let alone buy a holiday home. What can we offer and where are the ones with money?
Sub-Sahara Africa With the astonishing growth of its economies and investment from Asia, what opportunities does Africa offer?
Oman Our new, monthly look at a part of the world you might not have considered, checks out Oman, UAE’s neighbour
FUNDS
PLUS ALL YOUR USUAL…
MEET THE BUYERS
Residential funds
Western Europe
There appears to be a new appetite for funds, both from the clients who want to invest in them and from developers who want to operate them. John Howell investigates, and we look at some new funds
Our tour of the world’s property buyers arrives at Western Europe. How do you sell to the British, the Irish, the French, Swiss, Germans and Spanish; and have they got any money anyway? (A hint: yes)
• News & comment • Branding ideas • Mortgage report • Currency report • Business and training • Correspondents’ reports • The OPP Interview • Statistics and data • Show previews, reviews
F R E E H O L D A PA R T M E N T S AVA I L A B L E F O R S A L E • Sun Gardens Dubrovnik is an award winning resort recognised both in development and hospitality and tourism sectors • Rental management track record generating income for owners to help off set costs of ownership • Fully managed apartments operated under license with Radisson Blu • Apartments fully furnished to international standards • Attractive mortgage terms available
For further details contact: 00 385 (0) 20 361 650 | residences@dubrovniksungardens.com | www.dubrovniksungardens.com
BUSINESS The life of a ...
…property counselor My wife jokes that I commute to work via commercial airline, and she’s not far from the mark! Meetings, mentoring and plenty of air-miles – it’s non-stop
JOHN A. KILPATRICK Greenfieldadvisors.com +01-206-623-2935
www.opp-connect.com
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’ve been with Greenfield, a 38-year-old global property consulting, research, and advisory firm, since 1998, and Managing Director since 2004. I lead a team of talented professionals in Seattle and Atlanta, but I tend to be the one who spends most time meeting with clients and partners. I personally keep the airlines, hotels, and rental car companies in business. If I’m on the road, the day almost certainly begins early and ends late with meetings – serious, working meetings, down in the weeds about complex valuation and modeling problems. Paper cups of coffee and sandwiches from the nearest deli are usually the closest I get to a five-star restaurant. By the end of the day, everyone’s exhausted and the idea of cocktails and evening entertainment go by the wayside in favor of room service as I prepare for the next day’s meetings. My home base is in Seattle, but thanks to video conferencing and a well-developed IT system, our two offices are fully integrated. Office days really focus around three things. First, we produce intensive and detailed analysis and consulting reports for clients, usually dealing with property or property-related
securities valuation. A single report may deal with billions of dollars/ pounds/euros of investment or litigation. Each project is a group effort entailing the coordinated effort of dozens of staffers. My own involvement permeates the report, from the initial scope-of-work, thru the integrated analyses to the final determinations and opinions. At the end of the day, I have to make sure each report is in my own words and my own “voice”, which is
Mentoring our team is the one aspect of my job from which I get the biggest personal rewards a critical component of higher-end projects. Second, I spend a fair amount of time – although never enough – simply working with and mentoring our team. Our typical staffer is in his or her 30s, and we aggressively hand off responsibilities to younger team members. We recognize the importance of people-capital at Greenfield, and I deeply regret the
lack of time to work one-on-one with our team members. Finally, I spend a significant amount of time on “rainmaking”, the art of helping our firm identify and secure future clients. Our firm doesn’t actively advertise; rather we promote ourselves by contributing to the academic and practitioner literature, particularly in the valuation arena, and staying active in numerous professional and scholarly organizations. This, plus careful use of our web presence and targeted communications to likely clients, allows us to keep the name Greenfield on the desks of the right people. Note that one thing I did not list was administration. Early in my leadership at Greenfield I realized that day-to-day administration of the firm would eat away at the mission-critical tasks. I depend on a very senior leadership team to make sure the ship stays on course. If I had more time, where would I spend it? All of the above. Our clients expect our end products (reports, and frequently court testimony in complex property cases) to be in my words and voice. But mentoring our team is the one aspect of my job from which I get the biggest personal rewards.
villa on the med, forget about the sea, jump in our private pool happy
find your happy www.rightmoveoverseas.com