Property Life Magazine February March 2014 by Panashco Media Pte Ltd

ASIA’S NO.1 PROPERTY & LIFESTYLE GUIDE • DISPLAY TO MARCH 31ST 2014

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THE

M E D I T E R R A N E A N

ISLAND ICONS

ISSN 2251-3949

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PLUS! NEW ZEALAND North vs South • THE CANDY REPORT Southeast Asia Spotlight • PHUKET 28 Million reasons to buy • FUTUREWATCH New urban trends • VLADI MARVELOUS Asian interest in private islands

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THE TEAM MANAGING DIRECTOR/PUBLISHER

ALEXANDER KNIGHT alex@panashcomedia.com MANAGING EDITOR

STEVEN MALLACH steve@panashcomedia.com CHIEF OPERATING OFFICER

TREVOR WATLING trevor@panashcomedia.com DIRECTOR, KEY ACCOUNTS

MIRIAM RAHAMAN miriam@panashcomedia.com

MANAGING EDITOR’S NOTE

ART DIRECTOR

ARIF VILLANUEVA ADIL arif@panashcomedia.com DESIGN ASSISTANT

Welcome to 2014 – The Year of the Wooden Horse. What a year it’s going to be. There is every indication that Asian investment in Europe is heating up still further, while the frosty weather recently experienced across the United States has not deterred investors from taking a long hard look at real estate that ranges from houses in Detroit that are available at bargain basement prices or the new wave of investment that surrounds oil from shale extraction in the U.S. I’ve recently had an extremely interesting conversation about Asian interest in private island sales (more inside the mag) from residents of countries as diverse as Thailand, Singapore and of course mainland China. But it’s not all one-way traffic – there are investors from the Middle East, Russia, Europe and the United States lining up for property in almost every Asian and Southeast Asian country. The reasons for the investment surge are as diverse as the nationalities of the investors – commercial interest, leisure opportunities, education, retirement – the list goes on. It’s becoming apparent that the only constant is change. As the years roll by we see changes that affect almost every facet of our lives – from from the types of cars that are on our city streets, to the properties that spring up seemingly overnight across the urban landscape. We seem to have less time, but more opportunity to choose how to use that time. We complain about the burdens of responsibility, yet think little of stepping onto a budget airline and disembarking in a foreign land, hundreds or even thousands of miles from home. And this is the beauty of how the world has evolved over the last two decades. This year will see more change, and more challenge. Here at Property Life all that we can try and do is provide you with the information you need to make sense of property and property related issues in this everchanging world.

ROMEL BELGA PAULINE DYCOCO production@panashcomedia.com SENIOR EDITOR

VITTORIO HERNANDEZ editorial@panashcomedia.com EDITORIAL ASSISTANT

JONALYN FORTUNO editorial@panashcomedia.com UK SALES

MARK MARTIN mark@panashcomedia.com OFFICE MANAGER

NORIANTY ASMAT norianty@panashcomedia.com CONTRIBUTORS

KRITI JINDAL SCOTT O. TALBOT JAMES NORMAN NAMTA GUPTA CIRCULATION AND DISTRIBUTION

SASHA RITZER circulation@panashcomedia.com

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Panashco Media Pte Ltd is registered in Singapore 201127591R. Copyright © Panashco Media Pte Ltd 2014. All rights reserved. Any content of Property Life may only be reproduced, in any shape or format, with the expressed permission of Panashco Media Pte Ltd. For reprints please consult the advertising department. While every care has been taken in the production of this publication, the publishers take no responsibility for any views expressed, errors, loss, or omissions that may occur. Currencies quoted are for information purposes only – and are accurate as we went to press. Printed at Times Printers, Singapore.

STEVE MALLACH MANAGING EDITOR PROPERTYLIFE

MICA: 165/04/2012 • ISSN 2251-3949 KDN PERMIT NO.: PPS 1819/09/2013 (025545) Property Life is distributed at PropertyGuru events.

Contents FEBRUARY • MARCH 2014

19 THE MEDITERRANEAN ISLANDS

The Mediterranean has been the stage on which traders and adventurers from the Roman Empire and ancient Greece as well as Phoenician seafarers plied their trade across centuries. Today the Mediterranean Islands are the playgrounds of the rich and famous and a favoured leisure destination for holidaymakers from across the globe. It is also fast becoming a focus for property investment. In this issue we look at how the global economic crisis and an appetite for the Schengen Visa are bringing boom times to the Med.

THE GREEK ISLANDS

THE SPANISH BALEARIC ISLANDS

CORSICA

Sun drenched seas and sunsets on whitewashed walls are popular images of the Greek Islands, however there’s a lot more to learn about the potential of islands such as Crete and Corfu as a property investment destinations.

The Balearic Islands are an archipelago of Spain in the western Mediterranean Sea. Home to some of the most famous of the Mediterranean islands such as Majorca, and Ibiza the Balearics have much to offer the savvy property investor.

Birthplace of Napoleon Bonaparte, Corsica has a rich and sometimes turbulent history. Today nature lovers flock to the island. We ask if there is more room for property investment?

THE ITALIAN ISLANDS

CYPRUS

MALTA

Closer to Africa than to Italy, Sardinia is one of the most popular holiday destinations in the Mediterranean. Neighbour Sicily boasts some of the most scenic and unspoiled beauty in the Mediterranean – but are there dangers for the unwary investor?

Some detractors accuse Cyprus of being a Mediterranean outpost of England. The truth is that Cyprus can deliver both exceptional scenery and great value for the property investor – and the best thing is that property is available far from the teeming hordes of sun burned and staggering day-trippers.

The Maltese archipelago lies at the centre of the Mediterranean, 93 km south of Sicily and 288 km north of Africa. With over 7,000 years of rich and varied history the islands offer property investors a warm climate, architectural and historical monuments and the opportunity to enjoy a classic Mediterranean lifestyle.

THE CROATIAN ISLANDS

THE TURKISH ISLANDS

Populated since the time of the ancient Greeks the Croatian archipelago is the second largest group of islands after the Greek isles. An alternative property investment destination, the Croatian archipelago is attracting more attention from investors seeking value for money.

As an alternative to the traditional investment destinations in the Mediterranean the Turkish Islands, including Marmara offer picturesque interiors with mountain views and pine forests, combined with world-class beaches. How do these islands stack up against the other investment opportunities in the region?

Invest from

£42,500

Student Property

Assured rental yields of up to

10% NET

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”

Contents FEBRUARY - MARCH 2014

20 90 92 96 F E AT U R E S THE PASSPORT INVESTMENT MARKET IN EUROPE

PRIME PHUKET

ISLAND STYLE TAX HAVENS

FUTURE WATCH

NORTH VS SOUTH

VLADI MARVELLOUS

Island property investment checklist – getting the most out of an offshore investment.

James Norman of The Henley Group examines some of the most popular island tax havens.

Weighing up the potential - the property investment shootout between Auckland and Christchurch in New Zealand.

CANDY & CANDY The Global Prime Sector Report on luxury residential enclaves – how does Asia shape up?

The ultra lux property market in Phuket has been in the doldrums for some time – but does a new listing signal a renaissance of one of Asia’s investment darlings?

The cities and homes of the future are going to be very different from today’s urban spaces. In some cases the future is already here – Property Life looks into the crystal ball.

The demographics of Asia are changing at an unprecedented pace. A new breed of middle class and ultra high net worth investors are looking at non-traditional investments – including private islands. We talk to one of the world’s largest Private Island agents to get the inside story.

ON THE COVER

100

DETRIOT DAYS

106

RETIREMENT INVESTMENTS

Detroit is the spiritual home of Motown and iconic American muscle cars – has this city also got what it takes to provide property investors with superior returns?

Property life takes a look at some of the most desirable retirement destinations in the world and why lifestyle is increasingly important when making retirement choices.

REGULARS 02

MANAGING EDITOR'S NOTE

NEWS - BY THE NUMBERS

INTERNATIONAL NEWS

RISING STARS

ISKANDAR UPDATE

HOME LIFESTYLE

102

COMMERCIAL PROPERTY UPDATE

108

AFTERWORDS

Port of Naxos showing traditional Cycladic cubic houses. Naxos is the largest island in the Cyclades group of Greek islands in the Aegean Sea. The island features fertile valleys, lush green gorges, stunning seascapes and traditional villages perched high on mountain tops.

NEWS

FEBRUARY • MARCH 2014

BY THE NUMBERS

GBP

£19.9 billion

This is the amount, equivalent to USD $32.63 billion, of commercial property transactions that took place in Central London in 2013, bringing investment activity to its highest level since 2007. It is a 47% improvement from the GBP £13.5 billion (USD $22.14 billion) logged in 2012. Bill Tyser, head of City Investment of real estate services firm Cushman & Wakefield which made the report, said the outlook for Central London’s commercial property sector in 2014 “is positive with continued international capital inflow coupled with a strengthening UK institutional investment demand.”

EURO

WWW.PROPERTYLIFENEWS.COM

€1,593

That, or its equivalent of USD $ 2,170, is the current average asking price per square metre of flats in Zagreb, the capital of Croatia. It is down by 5.5% compared to the past 12 months, ending September 2013, according to the property website CentarNekretnina. A survey by Global Property Guide identified Croatia as one of the nine housing markets in 41 countries last year where house prices are declining. But Croatia’s market is actually 2-speed, the guide said, with most of Croatia suffering from depressed property prices, but the Adriatic Coast the toast of foreign investors.

Top 5

Growing

global cities demand

for table

According to the Association of Foreign Investors

grapes

MEMBERS of the Association of Foreign Investors in Real Estate (AFIRE) picked 4 US cities out of a list of the top 5 global cities they considered as best places to invest in property. The selection was made during the 22nd annual survey among the AFIRE member firms that have an estimated USD $2 trillion or more in real estate assets under management globally. James Fetgatter, chief executive of AFIRE, noted that the increasing interest of members beyond the traditional powerhouse cities of New York, Washington and San Francisco, is a recognition of the additional investment opportunities for foreign investors.

lead Sunraysia to expand its vineyard real estate in Australia

The top 5 cities are:

❶ London

❹ San Francisco

❷ New York

❺ Houston

❸ Los Angeles

Four first-tier Chinese cities with total land deals worth USD $82.5 billion in 2013 DESPITE THE COOLING MEASURES imposed by the Chinese government on its property market, land deals continued to be made. In fact, four first-tier cities had set records in land deals that breached the CNY 501.4 billion yuan (USD $82.5 billion) mark in 2013. That level is 2.5 times the figure for land transactions in 2012. Zhang Dawei of Centaline Property in Hong Kong said the boom in land transactions is because of insufficient tough government measures to control the housing market. The four hot cities for land deals are:

❶ Shanghai ❷ Beijing

❸ Guangzhou ❹ Shenzhen

SUNRAYSIA, growers of table grapes in Australia, is expanding its vineyard real estate because of the growing demand for this fruit in the Asian market. Among the doors that had opened to Sunraysia to export table grapes are China, South Korea and possibly Japan. While table grape production is booming, it is the opposite for wine grape production which is suffering from a profitless season. The company’s produce is also popular among local consumers, especially residents of Melbourne, Sydney and Brisbane who have been feasting on Menindee grapes from Queensland. Australia’s table grape belt, whose land prices are expected to improve with the anticipated higherdemand for vineyard real estate, are centred in Mildura and Robinvale. It extends into the subtropics and the dry, desert climate of Alice Springs.

NEWS

FEBRUARY • MARCH 2014

Vietnam’s Da Nang City:

Asia’s next luxury hot spot EFFORTS OF DEVELOPERS TO PUSH the Vietnamese city of Da Nang as Asia’s next luxury hot spot are paying off. Expected to rival 5-star resorts in Thailand and Indonesia, there are signs the market is picking up for the 19-mile stretch of beach on the South China Sea. So far, 5 of 8 oceanfront villas in Danang Beach Resort’s latest phase had been sold out the past three months for USD $1.6 million to USD $2.8 million, disclosed Matthew Koziora, sales and marketing director of VinaCapital Real Estate. The most luxurious units in the 642-hectare resort boast of 5 to 7 bedrooms, large ter-

races for indoor and outdoor activities and multiple private swimming pools. Real estate companies said the Vietnamese government is considering changing property ownership laws for foreigners which would take effect in July 2014. The amendment would allow foreigners to ink a 50year lease with the option to extend it for another 50 years, or a 70-year lease with no extension. Current laws limit property purchase by foreigners to chief executives of a local company or spouses of Vietnamese residents, according to Stephen Wyatt, country head of Jones Lang LaSalle Vietnam.

PWC’S TOP 5

preferred real estate investment destinations Gautam Mehra, executive director of PwC India, explained the slippage of Indian cities in the rankings to “the negative impact of the combination of market, currency, regulatory and political risk which continue to result in a general sense of nervousness and the tendency of foreign investors to stay on the sidelines.” Making up the top 5 are the mature markers of:

❶ Tokyo ❸ Jakarta ❺ Sydney

❷ Shanghai ❹ Manila

12.82 MILLION SQM In 2013, that was the area of new homes sold in Shanghai, China, up 36.6% from the previous year, according to the latest report of the Shanghai Uwin Real Estate Information Services. Sold at an average price of 24,177 yuan (USD $3,983) per square metre, it represents an annual growth of 7.6% for home prices in this Chinese global city. Jenny Wu, director of residential sales for the East China operations at DTZ, a property services company, explained the robust Shanghai property market to very strong demand, which is a sign of recovering confidence in the property market despite tightening measures imposed by the local and national governments. In spite of property curbs expected to remain in place in the first 6 months of this year to prevent rapid price growth, Wu said the market anticipates strong momentum to extend for another 6 months.

250,000 Facebook is the most popular social networking site in the world. N-Play - the leading provider of real estate applications on FB, said about 250,000 real estate agents, spread across different parts of the U.S. are included in its flagship service, the Real Estate Agent Directory for Facebook. The application was launched in Q4 2011, with 120,000 agents added since December 2012. But those are only the agents registered with N-Play’s directory. It plans to reach the 300,000 mark by Q2 2014. N-Play estimates about 1 million real estate agents in the U.S. have active FB accounts which they use for business.

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DESPITE INDIA BEING A HIGH RETURN MARKET, the country’s global cities are not on the top 5 list of multinational accounting firm PricewaterhouseCooper’s preferred real estate investment destinations. Among the factors cited in the report behind the exclusion of Mumbai or Bangalore are India’s ongoing economic slowdown and the steep fall of the rupee, the Indian currency. However, 4 Indian cities made it to the top 25. These are Bangalore (20th place), Delhi (21st), Chennai (22nd) and Mumbai (23rd).

BY THE NUMBERS

NEWS

FEBRUARY • MARCH 2014

Voteof confidence

Royal Dutch Shell, the world’s second largest company by revenue, is to retender one of the biggest corporate contracts of all time, as the company explores vast asset sell-offs in an attempt to stem a tide of red ink across its balance sheet. SHELL HAS ISSUED A REQUEST FOR INFORMATION to a select few agents, and will soon invite firms to pitch for the brokerage, consultancy, professional services, project management and estates management contract covering Shell’s 700m sq ft global estate, excluding petrol stations. Jones Lang LaSalle currently holds the existing contract, which it was awarded in 2003 having been selected from 38 property advisers and management consultants. In EMEA alone Shell’s real estate spans 150m sq ft, comprising 4,000 leased and owned assets in 53 countries, including commercial, industrial, residential, agricultural land, former operational land,

leisure and hotel facilities, operational plants and depots with supporting infrastructure, such as pipelines. The firm’s EMEA estate is valued at around $25bn, with an annual spend in the region of $2bn. The new global contract is expected to run for four years, with an option to extend for a further two. Royal Dutch Shell has started one of the largest asset disposal programmes to offset the spiraling costs of the major’s continued investment in oil exploration in harder to reach places. According to a Shell spokesperson “The RFI relates to the market testing of our Real Estate consultancy/contractual contracts. This is done on a regular 4-6 year basis.”

Costly investment

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Shell needs to dispose of property assets due to the increasing costs of oil exploration. Image: Creative Commons

for Philippine property PHILIPPINE PROPERTY DEVELOPMENT will continue to expand this year despite an expected slowdown in most of Asia, real estate services company CBRE Philippines said during a press conference in late January. “The Philippine sector will continue to accelerate in 2014… elsewhere in Asia, markets have slowed down,” said Rick Santos, Chairman of CBRE Philippines, told reporters at a recent briefing. “No longer is the Philippines an underestimated market, investors now see the sweet spot that is in all property fronts,” he added. Metro Manila alone will add 531,000 square meters in office space, with the majority coming from Quezon City, CBRE Philippines vice chairman Joey Radovan said at the same briefing. Despite the additional supply of office space, occupancy will remain at record highs as the outsourcing sector continues to eat up space, he noted. Last year, the Makati central business district registered an occupancy rate of 97.99 percent Santos noted that the depreciating peso and a huge English-speaking labour force add up to a winning formula for the Philippines, he added. “The country’s outsourcing industry will still be one of the best in Asia and as more occupiers relocate to the country, we see expansionary growth in Metro Manila’s fringes and provinces,” Santos said. Santos explained that restrictions in real estate investments in China, Singapore, Hong Kong and Malaysia will also result in funds flowing into the Philippines’ high-end residential sector. “We expect 2014 to be an unprecedented year in real estate investments for the country,” he said.

Shell Ready to Sell

INTERNATIONAL NEWS

FEBRUARY â&#x20AC;˘ MARCH 2014

London overtakes New York

as the most expensive city in the world

Knock on effects

WWW.PROPERTYLIFENEWS.COM

London is recognised as one of the hottest property markets in the world - but will sky high living costs affect the rental market?

ew York City has been dislodged as the most expensive city in the world by London. In its latest report, cost-ofliving experts Expatistan. com cited the high cost of petrol and rent, and even coffee and movies as the reason why the British capital topped the list. New York is just fifth on the list, while there are 3 other U.S. cities on the top 20. Besides London, 8 other European cities are on it, while there are only 3 Asian cities, including Singapore, which is in 7th spot. Finally, there are 3 Australian cities on the roster. The basis of the website in ranking the cities is information from about 200,000 respondents spread in 1,600 cities on the average price of beverage, food, accommodation, grocery items, electronic gadgets, rent and other everyday items. The index gets to be updated every time a user inputs a new price for any city. Gerardo Robledillo, the websiteâ&#x20AC;&#x2122;s founder, said the site receives 500 to 1,000 new prices daily.

INTERNATIONAL NEWS FEBRUARY • MARCH 2014

8 9

7 5 Among the commodities where the gap between London and New York prices is felt is petrol where a litre is GBP £1.5 (USD $2.46) in the British capital, while it is just about GBP £0.60 (USD $0.98) in the Big Apple. The gap is closed when it comes to rent, which averages about GBP £2,500 (USD $4,103.60) in London, while it is about GBP £2,400 (USD $3,939.50) in NY City. THE TOP 20

Likewise, the price difference is just slight for a cup of coffee between the two global cities, while the disparity is again felt for the price of two movie tickets at GBP £22 (USD $36.11) in London and GBP £16 (USD $26.26) in New York. When London is compared to Singapore, the website estimated that it is 17% more expensive to live in the former compared to the latter on the average. On specific commodity or services groups, food is 46% more expensive in London, housing by 14%, clothes by 7%, transport by 13% and entertainment by 14%. The only one cheaper in London by 2% is personal care.

１ LONDON

6 LAUSANNE

11 SYDNEY

16 HONOLULU

3 GENEVA

8 PARIS

13 BRISBANE

18 MELBOURNE

5 NEW YORK

10 COPENHAGEN

2 OSLO

7 SINGAPORE

4 ZURICH

9 SAN FRANCISCO

12 HONG KONG 14 THE HAGUE

15 STOCKHOLM

17 AMSTERDAM 19 TOKYO

20 WASHINGTON D.C.

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FEATURE

FEBRUARY • MARCH 2014

Rising Stars New developments

The development is a short distance away from Tiong Bahru and the Bukit Merah Town Centre, as well as Dempsey Hill and the popular Holland Village. With 1, 2 and 3-bedroom units, Alex Residences offers panoramic view of Singapore’s northern Botanical Gardens / Good Class Bungalows greeneries, Singapore’s southern coastline and the magnificent city skyline. Prices for the units in the 1st phase are at an average of $1,650 (USD $1,300) per square foot.

High end

Below: Alex Residences - Alexandra Road / River Valley, Singapore.

“Over the past couple of years the Alexandra/ River Valley area has undergone a complete gentrification into a choice residential enclave where property investment had yielded good returns and rentals are strong. said Danny Yeo, Group Managing Director, Knight Frank Singapore. ALILA DALIT BAY SABAH A new eco friendly hotel and villa development in Sabah managed by Alilah Hotels and Resorts is planned for occupation in 2016. Sales and marketing in Malaysia is being handled by Tekun Cemerlang Sdn Bhd. The development will be managed and operated by the international award winning boutique hotel and resorts operator, Alila Hotels & Resorts Ltd. which manages unique city hotels and resorts in Indonesia, India and Asia.

WWW.PROPERTYLIFENEWS.COM

ALEX RESIDENCES Singapore Land Ltd (SingLand) has announced the development of a 40 storey residential condominium a stone’s throw away from Redhill MRT station. Sales commenced in November 2013. Knight Frank is one of the appointed marketing agents. The 429-unit condominium is located in one of the most sought after residential districts – the Alexandra Road/River Valley area – right next to Tanglin and Jervois residential district where many high-end condominiums, luxury homes and embassies are located. The strong popularity is due to its city fringe locale and 5-minute drive to Orchard Road, the Central Business District, Marina Bay, VivoCity and Sentosa Island.

Invest in British history

From only £10,000/USD $15,391

10.4 % projected yields

Education investments are a contemporary, ethical alternative that provide a secure teaching platform for future generations. Scarisbrick Hall would like to offer investors the opportunity to be a part of the school’s expansion, development and growth. The opportunity will be for investors to purchase shares in the historical grade 1 listed building, the hugely successful Beautiful Beginnings Nursery, TCM (Teaching, Coaching and Mentoring) extracurricular activity division, state of the art sporting facilities, international boarding facilities and the new 6th form college.

Investment highlights: Grade 1 listed historic investment Min. £10,000/USD $15,391* investment for share purchase £34.5M to purchase 49% shares Min. 3-year investment - dividends paid on and after year 3 10.4% p.a. projected yields Asset secured investment Sipp approved investment Excellent yields over a medium to long-term period *Price based upon an exchange rate of 1.54 USD

REQUEST YOUR FREE INVESTMENT BROCHURE NOW www.buyassociation.asia/scarisbrick/propertylife Tel: +65 6534 9390

FEATURE

FEBRUARY • MARCH 2014

specification bathrooms and butler amenities. The Villas are planned within an enclosed forest landscape with timber walkways, natural flowing streams, koi ponds, water lilies and other vegetation. Access to the Villas will be on foot or by way of golf buggies, which will ensure a quiet and private environment. THE CHEDI ANDERMATT RESIDENCES Discerning Asian buyers will have an exclusive and rare opportunity to purchase a Swiss residence at The Chedi Andermatt, a luxurious 5-star contemporary hotel and residences development managed by Singapore-based General Hotel Management Ltd and nestled in the quaint Alpine hamlet of Andermatt.

Ultimate choice

Top - Ayana Residences, Bali. Bottom - Chedi Andermatt Residences accommodation.

The Chedi Andermatt Residences is available for sale with no restrictions for foreign buyers, making this the ideal investment for Asian buyers interested in owning a home in one of the world’s most exclusive enclaves. Opened on December 2013, The Chedi Andermatt is a luxurious 5-star contemporary hotel and residences development in the heart of the Swiss Alps. The property includes 64 elegant hotel residences, 42 apartment residences, thirteen lavish penthouses featuring indoor-outdoor fireplaces and spectacular views of the Urseren Valley and nearby peaks. The fully furnished one and two-bedroom residences range in size from 110 – 306 square meters, and the lofts and penthouses range from 221 to 655 square meters. In summertime, flowering meadows provide ideal walking, hiking and mountain biking routes for residents and in the winter, the world famous snow-covered mountains offer incredible pistes. Andermatt is centrally located in Switzerland with convenient connections to major

WWW.PROPERTYLIFENEWS.COM

The new development is designed as an eco-luxury, sustainable and lifestyle resort development comprising of a Hotel with 152 bedroom suites, all with a stunning view of the South China Sea and an approximate beach frontage of 18 acres of foreshore, white unspoiled sea front and 74 units of one and two bedroom luxury villas, with direct access to the beachfront and a lagoon with panoramic views of the Mengkabong River, a mouthwatering prospect for those who might be interested in getting to know one of the less developed corners of Southeast Asia. The Hotel will be located on the beachfront property and comprises of a seven-storey building with a basement. The ground floor space is of a double height volume so as to accommodate the planned amenities and facilities at the mezzanine level. The ground floor level has been designed towards an “open space concept” and emphasis of a high level of natural airflow within the floor space and the natural landscaped outdoor areas. The Villas each enjoy a private walled compound with swimming pool and deck, full

FEATURE

FEBRUARY • MARCH 2014

AYANA RESIDENCES BALI An exclusive eco certified cliff-top gated community, AYANA Residences in Jimbaran, Bali will consist of 115 luxury apartments and villas and Club House. The low-density 6.5 ha development adjacent to AYANA Resort and Spa Bali, will be part of a 77 hectare integrated resort property offering majestic views across the Indian Ocean and access to 1.3 kilometers of private coastline including secluded white-sand beaches.

Alila Dalit Bay

152 bedroom eco lifestyle resort.

A number of unit sizes are available under Indonesian strata title ownership, including the Bougainvillea Tower one bedroom units from 105 - 131m2, two bedroom units from 221 352m2 and penthouses from 592 - 698m2. The monthly maintenance fee will be approximately IDR 40,000 (USD $3.34) per sqm per month Amenities include a movie theatre, fitness center, lounge, library and swimming pool. Residents will also have access to a yoga area and extensive botanical gardens, as well

as access to the Club House located within the AYANA Residences complex. Residents will also have access to AYANA Resort and Spa’s restaurants, cafes and bars and the Spa. The design of AYANA Residences is inspired by the gardens of Bali found in temples and terraces and traditional courtyard homes. The focus is on sustainable, environmentallyfriendly design, with locally sourced materials throughout gardens and buildings. The gardens of AYANA Residences have been designed by St. Legére Design International Ltd, a Hong Kong-based landscape architecture and planning firm responsible for some of Asia’s most beautiful properties. For AYANA Residences, Dennis Selinger and his team combine modern style with traditional Tri Hita Kirana – the Balinese belief of balance between man, god and nature.

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airports in Zurich (1.5 hours), Basel (2 hours) and Milan (2 hours) and a private airfield in Buochs (45 minutes). The world-famous Glacier Express railway passes through Andermatt, connecting the city to both Zermatt and St. Moritz. The cities of Lucerne and Lugano are only an hour away.

COMMENTARY

FEBRUARY • MARCH 2014

THE PASSPORT INVESTMENT MARKET

IN EUROPE

btaining permanent residency or a passport from European countries through real estate investment is today a popular option – but is this opportunity all that it seems? Property investors fit into a number of categories when you break down the key motivator for making an investment decision.

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Who would you be?



I am a savvy investor looking for good capital growth and rental yields



My child is attending an Education Institution in a city / country



I am an ‘Passport Investor’ and wish to retire in a new city / country



I am an ‘Passport Investor’ seeking employment and live in a new city / country

Or you may be a combination of 2 or more of the above.

If you are looking for a ‘Passport Investment’, there are a number of countries offering great package deals for real estate investors. The rules differ from country to country, as does the amount of the investment and the length of the visa you will receive but the basic principle is the same.

Struggling european economies are following trends by influencing investors from China and South East Asia to invest in their economies through property investment by offering the equivalent of a green card or passport upon arrival (‘Passport Investor’). Since 1993, I have attended and presented at a tiring 400 plus property exhibitions in every Asian country. I am amazed how the impetus of these events has moved from pure investment opportunities to a combination that now includes immigration and ‘Passport Investments’. I liken this experience to attending my local fresh fruit and vegetable market and the stall attendant offering me life insurance. Attend any property fair and exhibition in Asia and you will surely find Spain, Portugal, Greece, Cyprus and others with local real estate agents out in full force earning up to a 15% fee. This is very concerning not only that developers are prepared to pay such high sales commissions to sell you a property, my biggest concern is that selling agents overnight, are now immigration experts and advisors. If you are considering a European lifestyle or investment, treat it like any other business decision and obtain independent professional advice.

Whilst your real estate agent will assist you in what to purchase, the safety measures everyone should follow include: an independent property lawyer + an independent immigration consultant + an independent mortgage broker (if required). The under lying theme here is ‘independent’ ... professional consultants that are expert practitioners in their field, the alarm bells will ring loud and clear if some issue of your decision is in trouble. In 2013, I attended approximately 20 international property exhibitions wherein over 70% of the exhibitors represented a European country. The most recent event was December in Shanghai. The invitation only, luxury property show was over flowing with wealthy Chinese investors and onlookers with exhibitors from most corners of the world. A notable observation was the value of some of these properties on offer, most in excess of USD 5,000,000. Castles, Mansions, Islands, Historical Villas, Rural Land, Penthouses and a limited number of what I would consider good investment opportunities under USD 1,000,000. No surprise, the main pitch to the Chinese investors browsing the hundreds

By Scott Talbot

COMMENTARY

FEBRUARY • MARCH 2014

There is no doubt that holding a European passport is very attractive. Retirement on a Mediterranean Island sounds perfect to me banking bailout crisis and many investors that had a false sense of security lost money in their own bank accounts. Don’t forget, the goal of these types of real estate and investment opportunities is to lure foreign investment and to strengthen battered European economies. The minimum outlay ranges from €250,000 (about USD $340,000) to €500,000. If you are a Passport Investor lured by the prospect of being able to travel freely throughout most of Europe your investment choice should be based on lifestyle choice, not your expectations of a Singapore style quick gain you will make from property. While the property market is recovering very slowly from the 2007 crash that tipped the region into a deep recession, the right

property investment, circumstances and purchase price should be secure and will satisfy your ‘motivator’ (retirement, child education or relocation). If your motivation is employment, join the job queue - the unemployment rate in some of these countries is in excess of 20% of the population. In conclusion, Europe is a fantastic place to live, rich in culture, history and diversity. The flip side of this opinion is that there are many real estate opportunities and bargains that have not been seen in my lifetime. If Europe is your desire, do your homework, get the ‘independent’ advice and you will almost certainly do well. Economic cycles are just cycles, the current economic turmoil will correct itself and prosperity will return in the future.

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of opportunities was the ‘Passport Investor’ opportunity. It is the opinion of many old school advisors and experts that whilst the ‘passport investment’ motivator is a good enough reason to invest for many however, selling agents have a duty of disclosure to caution clients on investment expectations. If you have money to spare and want to live in the European Union, be prepared for some economic challenges with your property investment returns. For example, In September 2012 at a Marina Bay Sands Property fair, I watched a talented seminar speaker attempting to coax Singapore investors to the Cyprus bank deposit ‘Passport Investor’ scheme nothing less than a disaster due to the 2013

19 SCOTT O. TALBOT Scott O. Talbot is the Managing Director of UCHK Consulting Limited and one of Australia’s most respected international businessmen, community leaders and philanthropists. He has over 25 years of experience in strategic property investment, business development, politics and philanthropy.

UCHK Consulting Limited provides high-net-worth foreign property investors approved investment opportunities information and logistics. http://property.org.au/

COMMENTARY

FEBRUARY • MARCH 2014

Island Style

Tax Havens A By James Norman

The Organisation for Economic Co-operation and Development (OECD) identifies 3 key factors in considering whether a jurisdiction is a tax haven. The first factor (1) should first be confirmed, if this is the case, the other 2 factors should be analysed; ❶ Nil or Nominal Taxes ❷ Protection of Personal Financial Information ❸ Lack of Transparency

THE EXTENT OF TAX HAVENS A 2012 report from the Tax Justice Network estimated that between USD $21 trillion and USD $32 trillion is sheltered from taxes in havens worldwide. This equates to approximately 6-8% of total global investments under management. This lost tax revenue could move many of the worlds’ governments currently in debt, to net creditor nations.

US LEGISLATION FATCA (Foreign Account Tax Compliance Act) was introduced to target individuals (US citizens and US permanent residents residing

outside the US) who evade paying US taxes by hiding assets in undisclosed foreign bank accounts with balances of more than USD $50,000, usually in tax havens.

KEY ISLAND TAX HAVENS Cayman Islands

Many tax havens exist in the Caribbean, including Antigua, Barbados, Bermuda and the Bahamas, however the most famous of them all are the Cayman Islands. The territory is comprised of three islands - Grand Cayman, Cayman Brac and Little Cayman, south of Cuba and northwest of Jamaica. The Cayman Islands is one of the world’s most popular destinations for investment funds to organise for tax purposes. The island nation of 53,000 people has no income tax and with an average income of around USD $57,000, Caymanians have the highest standard of living in the Caribbean. Alongside no income tax, there are no taxes on profits or capital gains or any withholding taxes charged to foreign investors.

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tax haven is a country that offers foreign individuals and businesses little or no tax liability in a politically and economically stable environment. Tax havens also provide little or no financial information to foreign tax authorities. Individuals and businesses that do not reside a tax haven can take advantage of these countries’ tax regimes to avoid paying taxes in their home countries. The use of havens is believed to date back to Ancient Greece, where some of the Greek islands were used as depositories by sea traders of the era to place their foreign goods to avoid taxes imposed by the city-state of Athens on imported goods, demonstrating that their use is almost as old as taxation itself. Different jurisdictions tend to be havens for different types of taxes and cater for a diverse range of individuals or businesses. Within this article I’ll explore some of the key island havens across the globe, identify their features, legislation and the potential changes in future status.

20 British Virgin Islands

Home to over 41% of the world's offshore companies.

COMMENTARY

FEBRUARY • MARCH 2014

There are no estate or death duties payable on real estate or other assets held in the Cayman Islands. As a result, the Islands are the fifth-largest banking centre in the world, with $1.5 trillion in banking liabilities.

Isle of Man

No tax liability on investment income or capital gains make this a popular offshore destination.

British Virgin Islands A British overseas territory located in the Caribbean east of Puerto Rico. Similar to Cayman, the British Virgin Islands has a thriving economy, with a per capita average income of around USD $38,500. Financial services associated with the territory’s status as an offshore financial centre contribute 52% of the Government’s revenue most from licence fees for offshore companies, with more raised directly or indirectly from payroll taxes relating to salaries paid within the trust industry sector. In 2000 KPMG reported that over 41% of the world’s offshore companies were formed in the British Virgin Islands.

Channel Islands

Isle of Man A self-governing British Crown Dependency, located in the Irish Sea between the islands of Great Britain and Ireland. Home to approximately 82,000 people, the Isle of Man is a lowtax economy with no capital gains tax, wealth tax, stamp duty, or inheritance tax and has a top rate of income tax of 20%. Offshore banking, manufacturing, and tourism form key sectors of the economy. The Isle of Man is one of the wealthiest nations in the world (8th), above the Channel Islands (9th) and the Cayman Islands (10th) in terms of Gross National Income (GNI) per head. The island enjoys exceptional political and economic sta-

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An archipelago of British Crown Dependencies in the English Channel, off the French coast of Normandy. They consist of two main islands; Guernsey and Jersey, 6 smaller inhabited islands and approximately 11 uninhabited islands. The islands claim that their tax independence dates as far back as the Norman Conquest. Today, Guernsey and Jersey remain among the worlds key tax havens, on par with Cayman Islands or Bermuda. With a combined population of approximately 164,000, the island is fast becoming home to some of internet retail’s biggest names who are setting up to do business there (due

to an unusual tax-free retail status). Tesco, Sainsbury and Play.com are all reported to have operations on one of the Islands and many smaller businesses conduct e-tailing from there. Jersey has tightened up its rules on qualifications required take advantage of this tax benefit. Some retailers have tried to establish a minimal presence, simply sending goods via the Jersey postal system in an attempt to win Goods and Services Tax (VAT) exemption.

bility, boasting a history of over 1000 years of continuous parliamentary government, the longest unbroken period of government in the world. In matters of direct taxation and fiscal affairs, the Isle Of Man is independent of and not subject to laws passed by the United Kingdom Parliament and there is no obligation to bring its tax system into line with those of the European Community Members. As a result of no tax liability on investment income or capital gains, the number of individuals placing offshore investments in the Isle of Man continues to increase - particularly those seeking pure capital growth, pension planning for retirement or the latest portfolio management strategy. This feature allows individuals to receive tax-free growth on capital in one of the worlds’ most secure offshore investment centres. Of all the major offshore centres, the Isle of Man is one of only a few that has a statutory compensation scheme – the Isle of Man Life Assurance (Compensation of Policyholders) Regulations 1991. In the event of insolvency, policyholders are entitled to claim compensation of up to 90% of the surrender value of the policies under the compensation scheme. This protection operates globally no matter where investors reside. In conclusion, tax havens (if used correctly) present many legitimate opportunities to minimise or even eliminate taxes paid on business activity or personal investment gains both now and in the future.

21 JAMES NORMAN James has over 10 years’ experience in finance – having worked in foreign exchange, risk management, insurance, investment management and financial advisory. He holds a degree in Economics and Finance and is a licenced financial advisor in Singapore. James has a broad knowledge of retirement and education planning, tax efficient investments, life insurance, foreign exchange and estate planning and is regularly asked to provide market commentary for media publications. Feel free to contact James to arrange a free financial review.  jn@thehenleygroup.com.sg | +65 9668 3820

The latest holiday lifestyle concept, Anantara Vacation Club, a unique Shared Ownership concept, has kicked off in Asia with Resort Living in Phuket on Thailand’s Andaman coast, Koh Samui in the Gulf of Thailand, Bali in Seminyak and China on Sanya’s peninsula. Anantara Vacation Club offers a points based multiple destination flexible Shared Holiday Ownership option for discerning consumers wishing to holiday in Asia and beyond. The Club Resort Collection initially comprises luxury private villas and apartments on the islands of Koh Samui and Phuket, Bali As the Club grows, addirional resort locations will be added to the Club

Resort Collection. Over the next three years, it is projected to add more than 200 holiday apartments and villas into the Club and to expand its marketing reach to more places in Asia and the Middle East. In Addition to utilising the Club Resorts our Elite Club Points Owners will enjoy the opportunity to stay at Anantara Hotels, Resorts & Spas worldwide under the Club Escapes flexible use arrangements. The Club Points Owners’ holiday options are further enhanced by an affiliation to Resort Condominiums International (RCI) which opens up access to over 4000 resorts worldwide. Harold Derrah, CEO of Anantara Vacation Club said, “The Shared Ownership industry is

Today the regulations involving vacation clubs and real estate trusts are quite sophisticated. The Anantara Vacation Club (AVC) plan was designed for ultimate consumer protection and flexibility. The AVC Points Club’s legal structure is similar to a

real estate trust, in that Club Points Owners are held by a Trustee for the Club and its Club Points Owners. AVC Club Points Owners benefit from being able to transfer their Club Points to heirs of third party purhcasers. According to Michael Kosmas,

relatively underdeveloped in the Asia Pacific region. During the past 11 years it is estimated that more than US$150 billion of resort Vacation Ownership has been sold on a global basis, however this amount is estimated at only about US$2.1 billion in the Asia Pacific region. There are almost seven million existing Shared Ownership consumers on a global basis, with approximately 250,000 owning in the Asia Pacific region. Anantara Vacation Club is positioned to take the lead in providing a luxury brand with an affordable ownership model, to accommodate the more flexible holiday habits of demanded by today’s consumers,” said Mr. Derrah.

VP Marketing Alliances, “AVC Points Owners’ use and enjoyment of the Club Resorts are protected by the trust structure. However AVC Points Club is not designed to be a financial investment. It’s a vacation lifestyle investment!”

MEDITERRANEAN

ISLANDS

ACCORDING TO SOME PROPERTY INDUSTRY PUNDITS THE DAYS OF THE GREAT MEDITERRANEAN FIRE SALE MAY BE COMING TO AN END. HOWEVER, ANY RECOVERY IS LIKELY TO BE SLOW AND THERE ARE STILL BARGAINS TO BE HAD FOR THOSE WITH AN APPETITE FOR THE TRADITIONAL SUN BLEACHED WALLS AND WARM WATERS OF THE MED.

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MEDITERRANEAN

n the late 90â&#x20AC;&#x2122;s a tragedy of classical Greek proportions struck countries across the Mediterranean region. Oversupply, unsustainable lending practices, shoddy building materials, code violations and good old-fashioned financial sleight of hand all contributed toward a death spiral for Mediterranean property in several countries. The global financial crisis was the last act of the tragedy. Investors deserted in favour of traditional European safe havens like London. The Med market seems to be staging a comeback on a foundation of more fiscally responsible lending and tighter governance of developers. Of course even during the darkest days of the financial crisis there were pockets of resilient residential property where prices, although not exactly buoyant were at least insulated from the worse of the financial fallout. Some of these pockets were to be found on many of the islands that are scattered across the Mediterranean. From the Balearic Islands of Mallorca and Ibiza to the Greek

Islands of Santorini, Corfu and Mykonos and the enclaves of Sardinia, Cyprus and Malta - the premium property segment was largely spared the malaise that crept across the European mainland. The island properties remained attractive due to above average investment returns and the buoyant holiday market and in many cases attractive tax incentives for buyers. Although these incentives shielded these properties the global financial crisis the lack of ready credit and belt tightening by potential buyers has to a certain extent depressed prices. Now a new wave of property investors from the East are casting their eyes towards Europe in ever greater numbers. Wine farms, golf estates and landed property are firm investment and leisure favourites. It seems only a matter of time before the islands of the Mediterranean see enormous investment from pan Asian buyers. In this feature Property Life will be examining just what makes these islands such attractive investment destinations. There are over 200 islands in the Mediterranean so it hardly needs to be said that an ex-

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GREEK ISLANDS

amination of all of these is far beyond the scope of this feature. We have selected those islands where property investment has been shown to provide consistent returns. However, as with all investments the advice of an expert investment and legal specialist should be sought prior to making any decision on a property purchase. The European press is constantly reminding readers of the potential pitfalls of investing carefully conserved savings in Mediterranean property. The laws relating to ownership and title deeds can be convoluted, as can the tax implications of owning a property. For many the maintenance of a property on a Mediterranean island can provide its own set of challenges. When all is said and done investing in property in this region is not without its challenges. The potential payoff is however worth the extra time and effort that is required to ensure that the decision to purchase is correct. Lower cost of living than European capital cities and a quality of life that many residents and property owners claim is amongst the best in the world are real incentives.

BALEARIC ISLANDS

SOVEREIGNTY

Greece - Presidential Parliamentary Democracy

SOVEREIGNTY

Spain - Devolved government in a constitutional monarchy

AREA

131,957 km2

AREA

4,992 km2 (1,927 sq mi)

POPULATION

11.306.183 (2010 estimate)

POPULATION

1,106,049

MEDITERRANEAN

CORSICA

SICILY

SOVEREIGNTY

Independant

SOVEREIGNTY

Autonomous region of Italy

AREA

8,680 km2

AREA

25,711 km2 (9,927 sq mi)

POPULATION

314,867

POPULATION

5,043,480

SARDINIA

MALTA

SOVEREIGNTY

Autonomous region of Italy

SOVEREIGNTY

Independant

AREA

24,090 km2

AREA

316 km2

POPULATION

1,637,193

POPULATION

452,515 (2011 estimate)

CROATIAN ISLANDS

TURKISH ISLANDS

SOVEREIGNTY

Croatia

SOVEREIGNTY

Turkey

AREA

56,594 km2

AREA

783,562 km2

POPULATION

4,284,889 (2011 estimate)

POPULATION

76,667,864

A GREEK ISLAND

ODYSSEY

THE GREEK ISLANDS HAVE LONG BEEN FAVOURITE LEISURE DESTINATIONS FOR TRAVELLERS FROM ALL CORNERS OF THE GLOBE. BUFFETED BY THE WINDS OF THE GLOBAL FINANCIAL CRISIS TOURISM TO THE ISLANDS HAS SEEN NUMBERS DWINDLE IN RECENT YEARS AND PROPERTY VALUES ACROSS GREECE HAVE TUMBLED. By Vittorio Hernandez

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There have been reports that Engel & Völkers (one of the world’s leading providers of premium residential and commercial real estate and yachts) has been actively looking at further building a portfolio of quality properties suitable for the growing number of Chinese investors interested in the Greek offer of a Classical style

Hora is the biggest village on Serifos Island in Greece and epitomises Greek island architecture.

residential permit. These permits are issued in exchange for property investment of over Euro 250,000 (around USD $328,000). This so called ‘Golden Visa’ would allow these investors a gateway to other Schengen countries across Europe without bureaucratic obstacles. It seems that the time may be right to evaluate the property investment opportunities of not only the Greek mainland – but also the sun drenched Greek isles. Let Property Life be your guide.

ccording to data from the Greek central bank, released in 2013 prices tumbled 28 percent from their peak in 2008 when the country’s economic contraction started to bite. However, tourism and property prices are staging a recovery – and at the same time growing interest from Asian property investors in the Mediterranean islands may be an indication that the ownership profile of those investing in the islands is changing.

Luxury in

Crete

This 5-star luxury designer villa will be built right on the seafront and overlooks the bay of Chania on the island of Crete. This exclusive address will not only boast an incredible location with spectacular sea and sunset views of natural beauty but equally a modern contemporary design From the high quality of the construction to the modern interior design, this exclusive VIP villa will clearly be the ideal retreat for a demanding clientele! The villa is 280m²and features 4 double bedrooms with en-suite bathrooms, 2 living areas (one of which is easily converted in to a fifth bedroom with a unique sound-proofed sliding wall) NOTICIBLE FEATURES: • • • • • • • • • • • •

Covered Parking Direct Beach Access Electric window shutters Electronic entrance gates Fitted bathrooms Fitted designer kitchen Fitted wardrobes Full insulation Fully landscaped gardens Insect screen in every room Italian/Spanish floor tiling Large balcony

• • • • • • • •

Mountain View Outdoor BBQ Outdoor shower Private parking area Private swimming pool Stone boundary walls Sun terrace Underfloor hot water heating

€1.950.000

www.propertylifenews.com/luxury-property-crete

V I L L A S E R E N E

GREEK ISLANDS

CORFU

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on-Greek nationals of the European Union can buy properties in Greece freely, but there are a few restrictions if the buyers are non-EU nationals. These include no acquisition of property near military bases and national boundaries, particularly those close to the Turkish border. Some islands require special permission to purchase, which is issued by the local council and it is not usually granted to non-EU nationals. However, the precarious state of the Greek economy has prompted the authorities to launch attractive incentives for investment on Greek soil, including Greek Islands. Following the global financial crisis in 2008 demand for property plummeted. The national government began to actively solicit the business of non-EU investors to buy property worth a minimum of EUR €250,000 (USD $341,910) in exchange for a five-year renewable resident visa. Being owners of Grecian property would make these foreign investors subject to real

estate tax which is 0.20% to 1% of property value at the start of the calendar year for EUR €200,000 to €5 million (USD $273,582 to $6.8 million) and 2% for properties worth more than EUR €5 million. The property is also liable for local real estate duty payable to municipal authorities, with rates varying between 0.025% and 0.035% of the assessed value. Corfu is particularly known for its long history of hospitality to foreign residents and visitors as evidenced by the North East coast which has been extensively developed by British holiday companies. The area features large luxury holiday villas with package holiday resorts on the north and east coasts, while on the opposite end of Corfu is Kavos, a resort area that also caters to tourists. The island, until the early 20th century, was the haunt of European royals. Today, it attracts middle-class families, mostly from UK, Scandinavia and Germany. Developments in Corfu tend to be villas and apartments. Existing properties may require a cash payment when buying, however the alternative is off plan purchase. The Corfu Travel Guide provides examples such as Villa Danai Corfu, Villa Adonis and Villa Basillis. The purchase of villas off-plan can be expensive - Roula Rouva Real Estate & Property Lettings, for instance, listed a property in Pelekas Central in West Corfu with an off plan house at EUR €650,000 (USD $889,000). The return of investor confidence in

Elegant capital

Corfu Town is today one of the most elegant island capitals in Greece, since it was spruced up for the EU summit in 1994.

Greece is evident in new developments. In Corfu, US-based private equity NCH Capital announced at the end of 2013 the construction of a EUR €23 million (USD $32 million) hotel, marina and private homes. Construction starts in 2015. While Europeans were the traditional property investors prior to the global financial crisis the situation today has changed. With many wealthy Chinese snapping up properties in Europe and the US, it was only a matter of time before these buyers began to focus on property in the Greek islands. According to Athens Mayor, Georgios Kaminis some Chinese businessmen have started investing in hotels and undeveloped land on Greek islands such as Corfu – a trend that many property experts expect to continue in the medium and long term. Most of the Corfu properties listed on Global Property Guide are house-and-lot packages, but there were a few lands listed with sizes ranging from 4,000 to 5,000 sqm that had price tags of EUR €110,000 (USD $150,500) to EUR €240,00 (USD $328,367), yield an approximate per sqm value of EUR €27.50 (USD $37.62) to EUR €48 (USD $65.67). Three –bedroom villas, which are the typical sizes of homes for sale in Corfu, range in price from EUR €200,000 (USD $273,582) for a 169 sqm villa to EUR €230,000 (USD $314,711) for a 340 sqm villa, all in Kassiopi, yielding per sqm rates of EUR €1,183 (USD $1,619) and EUR €676 (USD $926).

CHINESE INVESTORS IN SEARCH OF CORFU QUALITY

GREEK ISLANDS

CRETE

rete is not only one of the most popular holiday destinations in Greece, accounting for 15% of all tourist traffic to the country most of whom arrive via the sea port and airport of the city of Heraklion, it is also fast becoming a haven for property investors. These investors are mainly northern Europeans who seek holiday homes or permanent residences on the largest and most populous islands of Greece and are particularly drawn by the island’s mild climate. Most of these investors are British expats as well as Germans, Dutch, Scandinavians and other EU residents. The British are drawn to property investments in Chania, Rethymnon, Heraklion and Lasithi. Like in Corfu, villas in Crete are available off plan, starting at EUR €234,000 (USD $319,628) on a 1,260 sqm of land. Two-bedroom villas are more common in Crete, where the prices are lower than then one bedroom units that characterize entry level property on other Greek islands. These two bedroom units start at EUR €135,000 (USD $182,700) in Houmeri to EUR €225,000 (USD $304,600) in Hersonissos. The website Apropertyingreece.com advises investors in search of value to consider Chania and Rehtymnon which are currently the most popular areas for property in the island. For those buying in Rehtymnon an undeniable attraction is the fact that rental income in the area has proved to be extremely

to the fragile ecosystems of the island and its waters. The island’s pristine natural beauty and diverse landscape could also fall victim to the increased number of commercial developments which would accompany the building of a high volume trade port. When buying property in Crete, prospective investors are drawn to the simplicity of the traditional mountain communities and agricultural settlements, which are untouched by western developments - as evidenced by the presence of animal herds still being tended by shepherds and men in traditional dress. Word of mouth has effectively played an enormous role in promoting Crete’s beauty and the ease with which EU nationals can purchase property. This has led to a real property boom in the island. The website west.crete.com estimated price appreciation at a healthy 20% a year. The portal added that because Crete is still in its early days of development as a haven for foreigners seeking second homes and retirement options, home prices should keep trending upwards over the next few years, especially for properties with good views across the islands untamed natural interior. Crete is an anomaly to a certain extent as property returns are not necessarily dependent on views across the Mediterranean.

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Go west

Travel west for quieter, less commercialised resorts and villages at either end of the island. The high mountains of the interior are still barely touched by tourism.

resilient year round. Return on investment is also attractive since Crete is still a relatively young property market (the door to property ownership opened to foreigners in 1993) and excellent resale values are still possible as the market matures. Because of their location on the northern coast, the Venetian-influenced towns of Chania and Rethymnon also offer some of the best beaches and countryside in the island and are still unspoilt by the ravages of tourism. Although tourism is a key revenue source for Crete, due to the difficult economic situation in Greece, the national government (through the Ministry of Mercantile Marine) is reportedly ready to back up the agreement among Greece, South Korea, Dubai Ports World and China to build a large international container port and free trade zone in the southern part of the island near Tympaki. This would involve the expropriation of 850 hectares of land to build a port that could handle 2 million containers annually. However, the plan has been delayed due to the expected environmental, economic and cultural impact of such a venture. The development may be a mixed blessing for the island. On the one hand the new port could boost property prices in Crete if more and larger cruise ships call on the island. On the other hand, unless properly handled container ports can be both an eyesore and potentially damaging

MILD CLIMATE DRAWS EUROPEAN PROPERTY INVESTORS

GREEK ISLANDS

Prime real estate

MYKONOS

The most popular, the most high profile and the most expensive of the Cyclades, Mykonos sees millions of tourists a year.

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ike Santorini, Mykonos island – “The Island of the Winds” is part of the Cyclades Islands. Large numbers of tourists provide much of the island’s revenue. Visitors are drawn to the Mediterranean destination by cosmopolitan nightlife, unspoiled natural beauty and the many international celebrities that flock to its shores every summer. However, Mykonos has a reputation as more than just a resort island - it is a place where even the casual visitor can become immersed in a combination of culture and modern vibrancy. The island aslo features landmarks that have become synonymous with the Mediterranean lifestyle. These include a municipal library housed in an 18th century mansion, 16th century windmills and the Little Venice village. Citing annual reader surveys in numerous travel magazines, Mykonoshouseforsale. com noted that the island is seen as the most magical island in the world, no doubt due to the great natural beauty which is complemented by very friendly residents and a safe, relaxing island experience. The island provides a completely relaxing stay, whether for few days, weeks of R&R or a decision to make Mykonos a base for exploring the Med on a long-term basis.

Home prices in Mykonos usually start at EUR €110,000 (USD $150,300) which will get the buyer a one or two-bedroom villa. As the island continues to attract visitors and foreign property buyers, including those from Eastern Europe and China, more property developers are building housing projects based on ever increasing levels of interest and seemingly limitless business opportunities. In fact, despite the double-digit fall in home prices in mainland Greece, property prices in Mykonos and other holiday islands remain steady – showing no signs of plummeting off a fiscal cliff nor ascending to the heady heights that could signal the onset of a property bubble. Mykonos properties have enormous potential as buy-to-let units. Tourist numbers are expected to grow in the short to medium term, following the takeover of GB Airways by budget airline EasyJet in December 2013 and the increase in value for money flights to Greece and airports in close proximity to Mykonos. According to John Batty, Managing Director of Aegean Blue, a Greek property specialist the recent introduction of the first structured property products in Greece – which offer a comprehensive package of services such as guaranteed rental income for the first years,

furnishing packages and several exclusive services such as spas, marina and sports facilities is a sign that Mykonos is literally becoming hot property. With Greece taking steps to recover from the effects of the financial crisis, brokers and consultants in Athens seem convinced that real estate will play an increasingly strong role in the country’s economic recovery. Even wealthy Greeks who left the country at the height (or depth – perspectives vary) of the global financial meltdown are talking about returning. Those eyeing a property on Mykonos may be in luck since some properties on the island are selling at around 30% of their book value in response to the financial pressure, according to Kosta Kazolides, a London-based investor. Living on Mykonos or other Greek islands is also a value-for-money proposition, with the cost of living around 30% to 40% lower than the average in the United Kingdom, while property prices are less than half that of more established markets like Spain and Cyprus. No monthly council tax bill, receiving a pension paid in Greece and the use of a well-regarded health service all add to the attraction.

THE ULTIMATE GREEK ISLAND

GREEK ISLANDS

Crisp white

Santorini is one of Greece’s most important producers of excellent table wines. The crisp dry white is a perfect accompaniment to the fresh seafood served in the many restaurants on the island.

SANTORINI

PERFECT ISLAND GETAWAYS FOR PROPERTY INVESTORS the Mediterranean was thought by ancient philosophers to be the home of the legendary Atlantis. Viewed from the cliffs of Santorini it is a sight that according to the guidebooks “stays in your memory forever.” Other plus points of the island are a low crime rate, relatively low cost of living, beautiful beaches and fresh produce for those in search of a healthy diet. Santorini has attracted not only property investors but also artists who find their inspiration on the island - leading some of them to open studios and shops here. Initially, it was difficult to find a property for sale in Santorini because much of it has been reserved for children and grandchildren of local families. The property was held extremely tightly – often in the same family across multiple generations. However, foreign and local developers soon provided developments to satisfy international demand, and started to offer new homes that today begin at prices EUR €2,500 (USD $3,411) per square metre but go as high as EUR €9,000 (USD $12,277) per square metre if the property is located on a cliff, especially the traditional cave homes in Imerovigli,

Phira, Firostefani and Oia. A two-bedroom villa in the Kaman area would cost about EUR €185,000 (USD $250,500). At this price the purchase still represents excellent investment potential purchase - home prices appreciate fast, between 20% and 50% in the last few years. To further boost the attractiveness of Santorini as an investment haven, the island’s international airport takes in direct, low-cost charter flights from UK, plus there are regular ferry services to and from Athens and high-speed catamarans from Crete. But because of the growing demand for property in Santorini, in some areas, prices have risen by up to 300% in the last 5 years and in worse cases, 100% in just 12 months, disclosed Ruben Garcia of Iberian International, a real estate company. One trait of popular Santorini homes is that most of them are in harmony with their natural surroundings. While renovating these sites could add to the cost of the property since building materials must be transported to the site that are often out of the way, the money and effort are worth it.

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agged as the world’s top island for 2011 in Travel+Leisure Magazine and the world’s best island in the same year by BBC, Santorini relies heavily on tourism for revenue. European property investors, especially British property investors, have continued to invest on the island and have settled in areas such as Phira, Oia, Emporio, and Therasia. The levels of investment have been steady year on year ever since the Greek government liberalised property ownership laws in the early 1990s. The reason for the continued interest in the island is not just due to the relaxed property ownership laws - Santorini’s heady combination of sun, sea, history, culture and cuisine continues to lure holidaymakers and investors alike. And a new wave of Asian investors, with ample funds to buy a piece of the island is ready to take advantage of some of the lowest property prices in years. While Greece is itself is an attractive place for a second or even primary home, Santorini’s has a layer of mystique, which acts as a magnet to investors and visitors. The unforgettable Caldera basin, created 3,500 years ago and now filled by the sparkling waters of

GREEK ISLANDS

RHODES

A RARE WONDER IN A GLITTERING SEA

he Colossus of Rhodes was one of the Seven Wonders of the World and stood guard over the harbor of ancient city of Rhodes over two thousand years ago when travellers arriving in the city by sea could marvel at its majesty. Unfortunately the statue was toppled in an earthquake around 226 B.C. Fortunately this Greek island has what it takes to attract tourists and property investors even without one of the Seven Ancient Wonders. Rhodes, a World Heritage Site is home to growing list of new developments, like the new Cybarco complex at Pano Lahania, where units are selling from EUR €120,000 (USD $164,176) for two- and three-bedroom homes. Owning a home in the largest of the Dodecanese Islands is a popular lifestyle investment choice due to the island’s abundant beaches, fertile wooded valleys, rich culture and ancient history. To fully appreciate the wonders of Rhodes, one should visit the Acropolis of Lindos that features Doric architecture, Hora for glimpses of the island’s Ottoman past and the Jewish Quar-

ter for a taste of unhurried life. Property experts such as Savvas Savvaidis, head of Savvaidis & Associates, in an update for Global Property Guide reported growing interest in the island from potential investors who have been on standby mode for the past few years. After hedging their bets for some time, most of them said they could no longer wait for the crisis to blow over completely and would be moving swiftly to take advantage of the sometimes bargain basement prices for property on islands such as Rhodes. As a result, by the end of 2012, house sales were up 20% compared to the previous year, a development that took many of the property pundits by surprise. Despite these higher sales volumes, prices have declined by an average of 20% over the past two years. Even in the face of renewed interest from domestic and foreign investors Rhodes is still considered a buyer’s market, with the differential between requested price and actual sales price ranging from 5% to 15%. Savvaidis added that in some cases the difference was even larger – in the region of 20%.

Besides having an eye for a bargain, buyers of properties in Rhodes are increasingly sophisticated in their decision-making process. Those wishing to take advantage of the current opportunities on the island would be well advised to make use of a property specialist in order to identify specific types of property that offer good returns. Many buyers prefer homes close to the sea, particularly those on the East side of the island. However, the more romantic ones opt for the west side of Rhodes or the Medieval City or the far-off communities. For those is search of a unique property, rather than the more pedestrian villas stone built houses in villages offer exceptional value for money. The price tag of a stone house in the Medieval City begins at EUR €70,000 (USD $95,260), but buyers should set aside an extra EUR €30,000 to €50,000 (USD $40,826 to $68,045) for renovation. escapeartist.com Gives an insight into what attracts both tourists and property investors, the crowning glory of Rhodes - more than 300 sunshine days to enjoy the crystal clear beaches.

Rich history and modern developments

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The crusading Knights of St John used Rhodes as their main base from 1309 until 1522. Today numerous sandy beaches have attracted considerable resort development.

GREEK ISLANDS

OTHER GREEK ISLANDS SECOND-TIER ISLANDS BENEFIT FROM POPULARITY OF BIGGER ISLES

Finding what island to visit or invest in depends on the buyer’s aim and personal inclination. To guide potential tourists and investors, Lonely Planet has a 7-point guide on picking the right Greek island. Crete, Lipsi, Kefallonia, Skiathos, Mykonos – These islands have stunning and sun-kissed beaches that also feature a Venetian castle, nudist colonies and gay and lesbian groups. Best for beaches:

Best for History: Rhodes, Delos, Corfi, Pat-

mos – Among the attractions of these isles are a 14th century palace, ruins of shrines to Greek gods and the grotto where St. John wrote the Bible’s Book of Revelations.

Best for walking: Crete, Naxos, Alonnisos,

Skopelos – While on foot, you will encounter windmill-dotted plateaus, canyons, wild goats, forested river and ancient temples, Hellenistic towers and Byzantine temples.

Best for responsible travel: Zakynthos, Chios, Crete – These islands offer glimpses of the endangered sea turtle as well as organic farms and secluded mountains. Best for cycling: Evia, Kos, Thasos – To be found on these islands are meandering country roads, forested trails and bike rental places. Best for diving and snorkeling: Karpathos, Milos, Paros, Kastellorizo – For the adventurous who would enjoy organised dives in sea caves where you could have face-to-face encounters with deep-sea fish, dolphins and monk seals. Best for food and drink: Lesvos, Samos, Corfu, Folegandros, Crete – These places ooze with olive oil, ouzos, matsata, astakomakaronada and other Greek cuisine.

Which Greek island is right for you?

Golden opportunity

The islands of Greece boast rich cultural heritage, world renowned cuisine and fabulous choice of investment destination - along with the chance of a Golden Visa.

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he popularity of the main Greeks islands has also rubbed off on the second tier of emerging islands of the northern Aegean Sea such as Skopelos, Skiathos and Samos. Skopelos is where the film version of Mamma Mia was shot and has lured retirees and holiday home buyers. Among the choices of these investors are the apartments at Skopelos Village built by Aegean Blue. A one-bedroom flat has a starting price of EUR €97,000 (USD $132,665). At Samos Island, Barrasford and Bird is developing a resort and spa at Halcyon Hills that guarantees buyers rental returns when completed. The developer is offering a fractional ownership term or time-sharing from EUR €19,641 to EUR €39,287 (USD $26,864 to $53,735) - which are only 1/8 or ¼ of the property. Homesoverseas.co.uk pointed to the Greek Saronic Islands of Hydra, Spetse, Poros and Aegina as worth keeping an eye also because these emerging markets, besides making available smaller homes, offer good potential to buyers. When it comes to islands, Greece has so many of them, estimated to range from 1,200 to 6,000. The number of inhabited islands is between 166 and 227.

V I L L A E T R U S C A

Luxury in

Crete

A luxury villa of unique modern design, making an ideal permanent residence or holiday home. This villa can be built on multiple locations in the area of Chania on the island of Crete. The Etrusca villa comprises spacious living areas on three floors and a total of 240sqm. It has 4 double bedrooms and 4 bathrooms, one with an oval spa bath and also features a walk-in wardrobe, games room/gym, an office, a utility room and storage area. The villa design incorporates a distinctive curved frontal aspect featuring natural stone, which adds unique charm. Adjacent to the villa is a large private swimming pool with extensive sundecks, complete with shower, BBQ and shady gazebo/pergola. NOTICIBLE FEATURES: • Beach nearby • Electric underfloor heating • Fitted designer kitchen • Fitted wardrobes in bedrooms • Full insulation • Fully landscaped gardens • Garage • Grass lawns • Insect screen in every room • Internal Light Fixtures • Italian/Spanish floor tiling • Large balcony

• Marble-capped terraces • Mountain View • Outdoor BBQ • Outdoor shower • Private parking area • Private swimming pool • Solar water heating panel • Storage Room • Sun terrace

€1.350.000

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BALEARIC

ISLANDS ‘GOLDEN VISA’ OFFERINGS AND HISTORICALLY LOW LEVELS OF INVESTMENT FOR PROPERTY IN MANY MEDITERRANEAN COUNTRIES IS POWERING A WAVE OF INVESTMENT INTEREST FROM BOTH MIDDLE EASTERN, RUSSIAN AND CHINESE PROPERTY INVESTORS. By Jonalyn Fulo Fortuno

ince October 1 2013, any nonEU national coming to Spain with more than €500,000 (USD $674,000) to invest has been automatically granted a residency permit. It has become clear that access to these residency permits, and the attendant availability of a Shenghen visa is viewed as a great investment incentive. Traveling on a Schengen Visa means that the visa holder can travel to any (or all)

member countries using one single visa. The low property prices in Spain, and its Balearic islands, which suffered from a glut of unsellable property during the credit crisis and high levels of repossessions, combined with the ability to secure EU residency has boosted tourism in recent months as potential buyers flock to the mainland and its offshore possessions. Aside from the undoubted attractions of Spanish residency the Balearic Islands (con-

sisting of Majorca, Minorca, Ibiza and Formentera) feature spectacular scenery, a rich history and cultural attractions. These islands have retained their charm even in the face of hoards of tourists that descend on the island chain from April to October each year. A new wave investment is buoying up prices on the islands - but is it still possible to get in, if not on the ground floor of the investment rush, then at least at the Mezzanine level? Property Life takes a look.

Pocket sized ports and mega resorts, private coves and clubbing - there's something for everyone in the Balearic Islands.

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Diverse investment climate

RĂ&#x2030;SIDENCE

TERRAZAS COSTA DEL SOL

Own a holiday home in Spain and earn rental income of 4% net per annum Excellent opportunity to invest in a leaseback in Spain - Andalusia The Pierre & Vacances Terrazas Costa del Sol resort is a new-build development offering a relaxing setting on the Costa del Sol with the most prestigious golf courses and commercial facilities nearby. Just a few steps away from the beach and 5 minutes from Sotogrande, the resort enjoys a privileged location combining a seaside investment with a well-developed transportation network.

Terrazas Costa del Sol apartments Inspired by the traditional Andalusian villages, the finely decorated and air-conditioned apartments are ranging from one to three bedrooms. All feature a large private terrace where one can enjoy breath taking panoramic views of the Costa del Sol and the rock of Gibraltar. Whether you want to plan for retirement, develop your investment portfolio or own a holiday home without any of the hassles associated to it, Pierre & Vacances offers solutions to all your needs. Marketing Agent:

Developed and Managed by:

Built around a main square dominated by patios, fountains and palm trees, the villages offers many leisure activities for the family. CEA Licence No: L3009712B

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BALEARIC ISLANDS

FORMENTERA A PIECE OF PARADISE

are the traditional shelters for boats and the old-fashioned whitewashed villages. The island is able to retain much of its original character, thanks to the local authorities’ efforts to keep most parts of the coastline pristine. A preference for bicycles and scooters has contributed to slowing both the pace of development and the pace of daily life – the unhurried pace of Formentera adds to the charm. Exploring the island on foot is also a potentially rewarding prospect for tourists, particularly for those in search of adventure off the beaten track. Secluded coves and beaches will reward those who have the patience to find Formentera’s hidden nooks and crannies. For those who want to visit the popular attractions, rent a scooter and head to any of Formentera’s unique attractions, such as the Pilar de la Mola lighthouse and the Playa de Llevant (one of the most peaceful beaches on the island). Although these attractions may not match the frenzied excitement of nearby Ibiza their charm should not be underestimated –

Far from the crowds

The economy of Formentera is tourism-based, taking advantage of some of Spain’s longest, whitest and least-crowded beaches.

Conclusion There are of course certain pitfalls when investing in the Balearics. If you’re looking at property in the region make sure that you consult with professional legal and financial advisors. The care and time expended surmounting investment challenges is more than made for by the fact that the archipelago is a safe investment haven that ensures capital growth in a stable market. The Telegraph notes that foreign ownership of properties in the Balearic chain has grown 100% since 2008, when the Spanish property market was barely afloat due to the global recession. Figures from Spanish National Statistics Institute also showed that property sales in the Balearics grew by 32.2% year on year during 2013, while property prices logged a 4.8% rise in the third quarter of last year, thanks to the healthy buying appetite of foreign investors. Prices have not yet returned to their highs and there is certainly a window of opportunity for investors. *The Balearic Islands are an archipelago of Spain in the western Mediterranean Sea, near the eastern coast of the Iberian Peninsula.

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ormentera is impossible to access directly via traditional commercial flights and can in fact only be accessed via a ferry from nearby Ibiza. However, the extra effort involved in travel to this, the smallest of the Balearic* islands (and amongst the most laid back) should not deter those in search of a place to gently recharge tired batteries. Formentera is by no means a Balearic backwater, which tourists should skip when holidaying in the Mediterranean region. Much like Menorca, Formentera is a top-notch destination for those who want to get away from the hustle and bustle of a crowded metropolis. As one of the Mediterranean’s remaining unspoiled paradises, Formentera is blissfully free of the more unattractive kinds of ‘cheap and cheerful’ beachfront developments that mar the beauty of other islands in the Med. Strictly enforced building regulations have preserved some of the original Balearic homes and buildings, including the varaderos, which

it’s worth repeating that Formentera is a place to relax and unwind. Just like its sister islands, Formentera’s real estate market did not suffer the death spiral that affected the mainland market, on the contrary, house prices are unchanged and even a bit pricey due to the limited stock available. For starters, a one or and two-bedroom apartment could cost between EUR €220,000 (USD $297,791) and EUR €300,000 (USD $406,079) - while larger villas with at least two rooms are priced at an average of EUR €800,000 (USD $1,082,935). Singles may want to consider buying a studio-type apartment as these cost in the region of EUR €140,000 (USD $189,503) to EUR €200,000 (USD $270,719). On the other hand, those who have deep pockets, might be attracted to many of the beachfront properties with starting prices at approximately EUR €1,000,000 (USD $1,353,599) a great deal as they come ready packaged with a sparkling pool plus a stunning view of the Mediterranean.

BALEARIC ISLANDS

IBIZA

EXPERIENCE BALEARIC BLISS

s lively as its famed all-night parties and super clubs, the Balearics “white isle” is once again enjoying the limelight as well-heeled buyers and international investors return to its shores, thanks to a remarkable economic recovery that has brightened market sentiment. And if the growing interest from these property investors is any indication, then now may be the best time to invest in Ibiza’s real estate market. Historically, the Ibiza market is one of the most expensive in the Balearics. However, when the global recession pummeled the price of mainland Spain’s housing stock, prices on the island were affected – albeit to a lesser degree. But the continued purchase of foreign clients helped the market to quickly stabilise, and the slight price cut turned the island into a more attractive investment prospect. Proof of this are the number of international buyers, particularly German, British, Swiss and Dutch. These buyers along with Chinese, Americans and Russians, have developed a keen interest in off-plan investment. According to Sotheby’s International Realty, off-plan properties are being snapped up at remarkable pace which further indicates a strengthening mar-

ket. For example, Sotheby’s said that the gated condominium of Cala Conta is already 95% sold off-plan at a starting price of EUR €1.6 million (USD $2.18 million). A similar trend is also apparent in sales in a new development in Ibiza Town. With its strategic location at the center of the marina area, The White Angel development is now 75% sold off-plan. Joanna Leverett, head of international new developments at Savills, said that the residential building would also rent out well due to its close proximity to the beach and old town. But why is Ibiza property so attractive to foreign investors? For one thing, its value tends to appreciate over the years and even stood up well to the downward valuation pressures of the financial crisis, as demonstrated recently when foreign buyers willingly spent an average of EUR €1.5 million (USD $2.45 million) in exchange for a home on Ibiza. Perhaps not very surprising, despite its reputation as the Balearics’ party destination, the island has always offered beautiful countryside and the siren call of rural living. You just have to visit Ses Varia dez, Es Vedra or the Port of Ibiza to see that the island is more than a sum total of night clubs and hipster bars.

Another attraction is that you could always opt to rent out your property and expect a rental yield as high as 10% during the peak season, which runs from May until October. During summer, weekly rental rates in popular locations such as the family-friendly resort Cala Tarida start from GBP £1,280 (USD $2,098) for a two-bedroom apartment, purchased at an average price of GBP £214,150 (USD $351,127). In other prime locations, villas that are priced at over GBP £1 million (USD $1.63 million) are generally rented out for GBP £20,000 (USD $32,792) during peak season. This property type usually has an infinity pool and four to five bedrooms, which offer magnificent views of the Mediterranean ocean. Worth noting is that prices will vary according to proximity to the coastline (as is usual). Investing in Ibiza property is a potentially rewarding venture as financial, as well as lifestyle gains are possibly equally important parts of the decision making process. Overseas buyers do not just buy property to make extra money in rental income, or as a long-term investment, but as an investment of the heart - to experience the excitement and all-out Balearic bliss that is part of the Ibiza experience.

Called the island of excess – beautiful, and blessed with a myriad of stunning coves and hidden beaches amidst dense pine forests.

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Something special

MALLORCA

BALEARIC ISLANDS

THE ULTIMATE SUMMER DESTINATION?

hen investing in Spain, buyers are advised to cast their eyes offshore, rather than focus exclusively on mainland properties. Examining the Balearic Island option will reveal see unique investment opportunities which, if properly managed, can provide exceptional long-term returns. Of the four Balearic islands, Mallorca is arguably the most desirable investment destination. Not only is it a tourist hub but also a real estate hotspot, thanks to its stable market that recovered quickly from the economic downturn that hit Spain hard. Accordingly, sales volumes on the island have already enjoyed a steady upward trend since 2009 and recorded a double-digit increase year-on-year (2013 vs 2012) which stands in stark contrast to the mainland’s faltering property market. Among the contributing factors that kept Mallorca’s property market afloat during the recession were the almost zero surplus of investment grade property and the thriving tourism industry which savvy investors count on

for solid, dependable income. Described as the ultimate summer destination, The largest island in the Balearic chain attracts visitors from around the globe with a wide range of superlative leisure choices and natural beauty. The combination of coastal living, a family friendly culture and fine Mallorcan wine and cuisine all contribute into making the island a total package not just for tourists but also for buyers shopping for property investment. The fact that Mallorca is just two hours away via air travel from majority of European capitals also adds to its appeal. And it’s not surprising that EU nationals, particularly British, Scandinavians and Germans, are responsible for the largest portion of real estate deals, along with buyers from the non EU countries such as the US, New Zealand, South Africa, Russia and Switzerland, who also also make substantial contribution. For an island that is said to be twice as big as the greater London metropol, the property choices are somewhat limited due to the government’s move to limit the construction activity in accordance with planning laws that

Unfairly judged

Few Mediterranean holiday spots are as often and as unfairly maligned as Mallorca. The island is much more than a cheap and cheerful holiday destination. Some of the Med's most stunning properties can be found on the island.

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were originally created for the purpose of protecting the island’s fragile coastline. This bodes well for the market as it maintains the balance between supply and demand – ensuring that property prices on Mallorca are protected (at least to some extent) from negative economic conditions. Although the options are somewhat limited, the island remains awash with great deals. Property prices have not rebounded yet to the peak level seen during the boom years. House hunters will be pleasantly surprised to find that on some parts of the island, the popular sea view properties are still attractively priced and traditional townhouses and two-bedroom apartments can still be bought at bargain prices. And with the island’s low rate of speculative buying, that makes the hunt a less daunting task. According to Mallorca Property Partners, in prime locations such as Fornalutx, a townhouse with a terrace and sweeping mountain views could be bought at EUR €400,000 (USD $ 546,844), while coastal villas and 2-bedroom apartments are priced at an average of EUR €1million (USD $1.36 million) and EUR €500,000 (USD $ 683,555), respectively. But much cheaper properties are also hidden around the island as according to Kyero.com’s house price index. The average house price currently stands at EUR €162,000 (USD $221,471) for one-bedroom, EUR €271,000 (USD $370,486) for two-bedroom and EUR €429,000 (USD $586,490) for a three-bedroom unit. However, as the island has about 32 boroughs, it pays to do bit of research as to which would deliver the best value. Among the places which should figure on any list are Puerto Andratx, San Telmo, Santa Maria and the island’s capital Palma de Mallorca.

BALEARIC ISLANDS

MENORCA LAID BACK MENORCA APPEALS TO MATURE INVESTORS AND YOUNG FAMILIES

he low-key lifestyle and underdeveloped coastline would have been a minus point for any other island looking to brand itself as an investment destination or tourist hotspot. But on Menorca, these traits are actually among its greatest assets due to its particular appeal to older buyers and young families. Described as the most genteel of the Balearics, Menorca is indeed a refreshing change from the wild parties of Ibiza or the

crowded holiday base of Mallorca. Thanks to its warm Mediterranean sunshine, long stretches of unspoilt beach, lush greenery (Menorca is a UNESCO biosphere reserve), uncrowded bays and low-rise traditional hotels and quieter villages, the island draws increasingly larger numbers in search of a peaceful and private hideaway. However, when buying a Menorcan property, one should be aware that the buyto-let market is not as vibrant as that on Menorca's sister islands Mallorca and Ibiza due to

the relatively seasonal tourism market which quiets down significantly during winter. Also, as tourists are mostly comprised of families, the majority of them tend to favour mid-range hotels and family-friendly resorts, leaving landlords with a low occupancy challenge. “Let’s be clear: if you think you will make money by borrowing to buy and letting it out, forget it. Generally, speaking, if you cover 30 to 40 per cent of the mortgage cost you are doing well. Most people buy to enjoy (the Menorcan lifestyle) and then do some letting

Scattered development

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Much of Menorca looks the same as it did at the turn of the twentieth century, only around the edges of the island, and then only in parts, have its secluded coves been colonised by villa developments.

at the side,” says Colin Guanaria, director at Balearic estate agency Bonnin Sanso. The local authorities have also rolled out new rules requiring a rental license for certain types of property - such as apartment and terrace houses. The new regulations can be quite daunting for new owners. That’s why most of the buyers on the island use their purchase either as a vacation home or for retirement purposes. But whichever is the case, owning a property on the island is undeniably attractive. The number of purchases in the middle and high-end sector are testament to the continued popularity of the island as a lifestyle investment destination. According to real estate firm Engel & Volkers, property purchases were up 35% year on year (2013 vs 2012). The surging numbers are being fuelled by foreign buyers, including Britons,

Rustic charm

An essentially rural island, Menorca features rolling fields, wooded ravines and low hills and some attractive beaches.

French and Russians who consider the 30-50% post-economic crisis price drop as a rare opportunity to invest in the Menorcan real estate market. Figures from online real estate platform Realigro Real Estate show that in less prime areas such as Es Mijorn Gran, Es Marcandal and Fornells, prices per square metre for detached home with a charming little garden range from EUR €1,500 (USD $2,043) to EUR

€1,700 (USD $2,316). In more prestigious areas located within Cala Caldama to Cala ‘n Porter, per square metre cost is a bit pricey, with median prices between EUR € 4,000 (USD $5,450) and EUR € 5,000 (USD $6,812) mark. On the other hand, house prices in Cala Llonga’s exclusive neighbourhood start at EUR €300,000 (USD $408, 777), while a three-bedroom villa complete with guesthouse and pool can reportedly be bought at EUR €688,871 (USD $938,649). When it comes to the island’s average property cost, Kyero.com reports that the rate stands at EUR € 330,000, which is significantly higher than the mainland’s EUR €218,000 (USD $297,044). But then again, what’s a hundred thousand if you get to live in a place that draws you in with the beauty and pace of a gentle life?

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BALEARIC ISLANDS

CONCEPT

The investment concept of the habitat invest portfolio involves urban properties located in lisbonâ&#x20AC;&#x2122;s historical centre. These buildings have undergone significant urban rehabilitation and refurbishment to bring about a construction of higher quality. The apartments are designed to cater for a new family lifestyle in a historical and traditional atmosphere. From another perspective, habitat invest real estate products can also represent an extraordinary investment opportunity with higher prospects for profit by adapting each unit to the concept of shortterm rental (serviced apartments).

REAL ESTATE

8building will be completely renovated and rebuilt at the highest quality standards. The apartments are designed for a new family lifestyle in an area steeped in tradition and history. Due to its location and outstanding city and river views, 8building is an excellent investment, and a excellent option to make your home. REQUEST MORE INFORMATION: www.propertylifenews.com/property-investment-lisbon

CORSICA

UNSPOILT BEAUTY DRAWS TOURISTS AND INVESTORS, BUT NATIONALIST CORSICANS THREATEN PROPERTY MARKET By Vittorio Hernandez

he French island where Napoleon Bonaparte was born has been occupied continuously since the Mesolithic era when it boasted an indigenous population that became extremely influential across the Mediterranean region. During its checkered history the island was briefly occupied by Carthagenians, colonised by ancient Greeks, occupied by the Etruscans then incorporated by the Roman Republic before it became part of Sardinia as a province of the Roman Empire. The collapse of the empire was followed by various invasions and leadership changes, led by a succession of tyrants, conquerors and governments.

In 1940 Corsica, came under the rule of the Vichy French regime and was liberated by Italian and Free French Forces after the Italian armistice in 1943. Today, Corsica forms part of the 27 regions of France, but it is designated as a territorial collectivity that grants it greater

An Authentic Experiecne The number of annual visitors now exceeds the island’s population nearly ten times over, but tourism hasn’t spoilt the place - overdevelopment is rare.

powers and more autonomy than other French regions. It is divided into two departments – Haute-Corse and Corse-du-Sud, with Ajaccio as the regional capital. Power lies in three institutions: the Executive Council, Corsican Assembly and Economic, Social and Cultural Council. Native Corsicans have been seeking more independence from mainland France for decades and the current status of the island is the source of the political friction that characterises daily Corsican life. Although Corsica is the least economically developed region in Metropolitan France, its unspoilt landscape draws visitors from

CORSICA

Summer residents Because of the influx of tourists, whose numbers have grown four-fold in two decades, Corsica’s population doubles during August, with 60% of visitors making landfall on the island between July and August. Income from seasonal tourism of about EUR €1.3 billion (USD $1.76 billion) annually remains the islands biggest source of revenue, however the disappearance of the visitors during the off season has resulted in the island’s per capita gross domestic product being one of the lowest in Metropolitan France.

Property investors Spectacular Coastline

More than three million people visit Corsica each year, drawn by the island’s striking coastline and azure waters.

The summer months bring in about 3 million tourists who are attracted by water sports, fishing, bicycling, horse riding, hiking and other outdoor sports activities, as well as numerous cultural festivals such as Estivoco and the concerts held on small streets, communities and places of worship. To get a sense the Corsican lifestyle and architecture, Independent.co.uk recommends visiting Hotel Dominique Colonna in Restonica Valley, Sartene which is said to be the most Corsican of Corsican towns. A trip to the Balague district for a taste of the Corsican charm, and to St. Antonino, the oldest village in Corsica are also strongly recommended. To reach Corsica from the United Kingdom, check the flight schedules of Ryanair which flies from Stanstead to Figari and EasyJet which offers services from Gatwick, Manchester and Bristol to Bastia and from Gatwick to Ajaccio. The island is also accessible by boat from the French mainland and from Italy courtesy of sea going transport companies such as Corsica Ferries, CMN La Meridionale and Moby Lines.

Besides attracting visitors, Corsica also draws property investors in part due to the fact that France has no restrictions on foreign ownership of property. The majority of the property owned by foreign nationals is based on a freehold agreement, being either co-owned, or land that is earmarked for mixed-use developments. There are also leaseholds of up to 99 years available. Potential buyers will have to make allowance for a number of transaction costs associated with purchasing property in Corsica. These costs include the purchase price of the property itself, lawyers’ fees, notaries’ fees, registration fees, taxes and agents’ fees. The rate for registration fees is 3.6%, while the buyer must also pay an additional tax of 1.2% which is set aside for the commune or a department equalisation fund. There is an additional levy of 2.5% for appropriation to the state and another levy for the state of 0.2% normal rate or 0.1% special rate. The notary fee ranges from 7% to 10% plus VAT. Land registration fee is flexible but usually in the vicinity of 0.6% of the property value. In addition there is an agent’s fee of between 3% and 10% of the selling price, plus VAT. All in all, the round trip transaction costs would begin at 8.38% and could go as high as 29.41%, numbers which are considered moderate to high, according to Global Property Guide. As an island destination, Corsica is an ideal place to purchase a second home or buy-

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across the world, with tourism the lynchpin of its economy. Tourists are attracted to the areas around Porto-Vecchio and Bonifacio in the island’s south and Calvi in the northwest due to the unique natural beauty of the regions. The attractiveness of rural Corsica is the result of hundreds of years of intense cultivation, combined with careful management. In 1584 an order by the Genoese governor stipulated that farmers and landowners annually plant chestnut, olive, fig and mulberry trees to provide Corsicans a steady supply of chestnut wood and chestnut bread. The island is also noted for its gourmet cheese, wine, sausages and honey that are sold in mainland France and exported across the globe. The inner island also has traditional agriculture based on breeding of cattle (the island is known across the region and to gourmands across the world for the quality of its veal).

CORSICA

to-let property due to its Mediterranean climate featuring hot summers and mild winters, plus beautiful beaches and warm seas, all of which are proven tourist magnets – an appealing attribute for those investors in search of rental income. Global Property Guide recommends the regional capital of Ajaccio, which can be found on the west coast of Corsica, as an excellent property investment destination. Here the buyer can find history, culture and beauty in equal measure. The historic part of the city is undeniably charming due to its picturesque harbour, the old citadels of Quai de la Citadelle and Jette de la Citadella, the Renaissance-style cathedral, a pebbled beach and a port for both fishing and sailing. A quick scan of Corsica properties listed in Global Property Guide show a wide range of property investments available on the market. There are houses, villas and apartments with between one to six bedrooms as well as unimproved land. The price of two-bedroom houses typically begins at EUR €125,000 (USD $170,000), while raw land would range from EUR €100 to €200 (USD $136 to $272) per m2. To cut on cost of buying property in Corsica, several developers offer off-plan units. Also called Vente sur plan, most properties sold offplan are often part of a development within a city centre or near a coast, according to FrenchProperty.com.

A major threat to Corsica’s thriving property market is a proposal by a local politician to ban non-residents from purchasing properties on the island because their “rampant property speculation” is allegedly forcing locals out of the market. The proposal would even include French citizens from the mainland. Paul Giacobbi, head of Corsica’s Executive Council, said in late 2013 that he plans to ban these groups from buying land or houses on the island. Buyers must prove that they had lived in Corsica for at least five years, but there would be some leeway for mainland residents or those who live abroad but can prove a link to residents. In justifying the proposal for the stringent qualification framework, Giacobbi explained: “If one can buy land here as easily as you could buy a bar of chocolate in a supermarket, then we are heading for catastrophe. The only solution is to limit access for non-residents.”

Visitors are drawn by a mild climate, culture, cuisine and some of the most diverse landscapes in all Europe.

The proposal is seen as part of the nationalist politics in Corsica which opposes foreign investments as second homes. To drive home their point, nationalist groups usually resort to scaring foreigners by blowing up houses or warning them to leave the island alone or face the consequences, which unsurprisingly has affected the sentiment of those who have purchased property on the island. Among the developments opposed by some residents is a proposed holiday residence of publicist Jacques Seguela who introduced former French President Nicolas Sarkozy to his second wife, model Carla Bruni. A word of caution to future investors is that Corsica, besides being the birthplace of Bonaparte, can also be a clannish, closed society. The Hollywood portrayal of Mafia godfathers and armed separatists, operating under a code of silence or omerta is not the stuff of screenplays and Golden Globes, but rather a way of life on the island. During the term of then Corsican Executive Ange Sanini, some groups opposed his 20-year development plan called Padduc, which aims to improve Corsica’s economy by

declassifying stretches of protected land to allow more construction. The Guardian newspaper in Britain reports that there was an anti-Padduc movement composed of about 80 different groups such as trade unions and environmentalists. Corsican hardline nationalists also launched a new political party in early 2009 - Corsica Libera, which opposes building developments on the ground that the ongoing activity threatens Corsica’s national identity, reported However, Marie Dominique RoustanLanfranchi of France-Corse, an anti-nationalist association, defeated Giacobbi’s proposal on the grounds that it was not in the spirit (or the letter) of the French constitution. She pointed out, “Property prices are rising everywhere, in regions such as the south of France and in Paris. People have to stop thinking that Corsica is alone. Why are we always treated differently compared to other French regions?” Roustan-Lanfranchi pointed out that the real problem is not the foreign investors but the backward and over-conservative outlook of some Corsican politicians to development.

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Challenges and risks

Natural Charms

ITALIAN

ISLANDS

taly is a gem of a country, rich in both culture and natural beauty, and its breathtaking islands represent much of its charm. From glamorous resorts and distinguished cultures to magnificent historic cities, dramatic volcanoes and pure white secluded beaches it seems that the traveller is spoiled for choice. It may also offer the savvy property investor the opportunity to combine a leisure investment with a rental property, especially on Italian islands such as Sicily and Sardinia or even smaller, less developed neighbours such as Lampedusa or Ponza. Property prices on the islands have suffered the effects of global financial turmoil, however to a lesser extent than mainland Italy.

Something for everyone

Each of the Italian Islands differs in character - however all boast magificent cuisine, rich history and arresting natural beauty.

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ÂŠ NOUHAILLER / FLICKR

Adding to the woes of the Italian property market was a debt crisis, which struck in 2011 - leading to a credit freeze and a decrease in the average household income across Italy. Even facing an almost perfect storm of property price mayhem the prices of Italian real estate did not suffer the same rate of decline as other Mediterranean economies. This was in part due to the fact that banks and construction companies kept prices artificially high, resulting in low transaction volumes. However, the country has not escaped completely unscathed. According to Luca Dondi, Managing Director of the Bolognabased Nomisma think tank a there is expected to be a further downward price correction

for the next two years, which will encourage demand. He said he did not expect price appreciation before three to five years. According to Real Capital Analytics Inc., a global research and consulting firm, from January through early October 2013, the volume of Italian cross-border transactions totaled 2.7 billion euros (3.6 billion U.S. dollars), the largest amount of foreign investment in the countryâ&#x20AC;&#x2122;s commercial real estate since 2007. It is clear that property investors are realising that although patience might be the watchword governing purchases of Italian island real estate, there are significant upsides to investment in this corner of the Mediterranean.

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SARDINIA

BETWEEN EUROPE AND AFRICA FEATURING THE BEST OF BOTH

Novelist DH Lawrence once described the island as “lost between Europe and Africa and belonging to nowhere,” an opinion evidently not shared by visitors who take ownership of Sardinia and return again and again to enjoy the mystique of the island. Beyond the sun and the sea, Sardinia also beckons due to its coastal towns that feature some of the continent’s most ancient archeological treasures - some over 3,700 years old. The typically Mediterranean climate in Sardinia is another plus factor in favour of investing on the island. Those in search of property in the interior of the island - especially its mountainous areas, can expect cooler and wetter weather, plus occasional snow. Many find these parts of the island more comfortable when compared to the coastal areas where the fierce summer heat can make life extremely uncomfortable.

Getaway.com listed Sardinia as the 9th most popular region in Italy for property investment. A full 5.76% of enquiries received by estate agents were in relation to properties on the island - according to the study made by the website’s intelligence department. Most of the enquiries were for houses rather than apartments. Sardinia was preferred mainly by French investors, but the website said that demand from foreign investors in Italian properties across the board is trending upwards, including enquiries from nontraditional sources, such as investors from the Czech Republic, India and China. Fortunately for foreign buyers, Italy has no restrictions on foreign ownership of property. Those interested in buying real estate in Sardinia are advised that any money flowing into Italy to purchase property must have official sanction so that in the future, if the owner

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he second-largest island in the Mediterranean Sea, Sardinia has a large surface area and population when compared to other smaller islands in the region, one of the reasons that it has is become increasingly popular with tourists and property investors. Sardinia has been populated by successive waves of emigration from the mainland, beginning in the Paleolithic and continuing today, with the modern seasonal mass migration when tourists from all over the world follow the summer sun to join the hordes of Italians that flock to the island to enjoy the rich history and great natural beauty of Sardinia. Like other Mediterranean isles, Sardinia’s attractions include a majestic coastline, immaculate beaches, forested mountains and enchanting caves that so entrance tourists that many eventually return to buy second homes.

By Vittorio Hernandez

SARDINIA

Large parts of Sardinia remain untouched by tourism, particularly the interior. The island’s main draw, however, is its magnificent coastline, with some of the cleanest beaches in Italy.

es is highly recommended by Global Property Guide as a property destination for investors. The erstwhile quiet fishing community is a jet-setter’s haven with its ritzy resorts, plush holiday villas and yacht-filled harbours. The yachts of the mega rich have a berth in Sardinia at the marinas of Porto Rotondo and Porto Cervo. English buyer Angela Giddings, quoted by Home Overseas, said she opted for Sardinia because she felt Spain is too developed and was apprehensive about investing in emerging markets. “We visited Sardinia and it was love at first sight – the island itself is gorgeous, the beaches and surrounding waters are just amazing and perfect for sailing and the interior is also beautiful – especially in spring.”

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Unspoiled beauty

wants to sell the property, the funds can be repatriated. Securing the services of a bilingual real estate lawyer is advisable prior to starting negotiations for the purchase of any property in Sardinia. The Global Property Guide estimates the total round-trip transaction costs in Italy to be from 8.84% to 22.6% of the property value, with the registration costs at 3% for main homes and 7% for second homes. Other costs include a 7% fixed registration tax for non-resident buyers, real estate agent’s commission of 3% to 8%, plus 21% VAT which is often shared equally between buyer and seller. Not unexpectedly, Sardinia’s Costa Smeralda (Emerald Coast) on the island’s northern side, featuring a long stretch of coastline and white sandy beach-

Value for investors

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Large parts of Sardinia remain relatively unblemished by development. Investors can still obtain exceptional value.

Two-bedroom apartments with sea views, costing around EUR €160,000 (USD $216,600) are the most popular investment properties in Sardinia. Home Overseas recommends that property investors in search of real value look for units on the south of the island. This region has recorded the highest rise in property in the last two years – around 20%. Among those who have been attracted by the south and southeast are British property investors – and more are likely on the way due to the dual carriageway that was completed in 2008 and today connects Sardinia’s capital, Cagliari to Costa Rey. The road link will continue to benefit property owners with prices in the area expected to go up between 10% to 20% in the next few years. With the road link in place, a developer has built a modern golf resort on the Golfo degli Angeli peninsula near Pula on Sardinia’s south cost. The ritzy community features residential properties, sports facilities and hotel accommodation and good transportation links from Cagliari Airport and the ferry port. Famous architect Massimiliano Fuksas is also building the exclusive IS Molas resort which is very close to some of the most striking of Sardinia’s beaches. The resort offers 200 stylish homes surrounded by an 18-hole golf course and has access to the IS Molas Spa offering a variety of beauty and other treatments. For investors who are looking to keep their bank account in the black, Charlotte Wootton,

who has been spending her holidays on Sardinia for more than a decade, recommends buying on the established northern coastlines. At Torre delle Stelle, lots cost about EUR €5,000 (USD $6,770) per square metre, while at Costa Smeralda, it would be three times higher at EUR €15,000 (USD $20,306) per square metre. For investors who want an old world ambiance in an established town Alghero Estates, developed by Maria Grazia Vendone in response to requests from English buyers offers a unique for such type of environment. Alghero is found in the old town named Barcelonetta, which features cobbled streets, old city walls and a seafront that reflects the real Sardinia. Like the other areas mentioned, Alghero has experienced extraordinary growth in prices, in some instances up to 20% per annum. Home Overseas said it expected continued expansion of property prices in Alghero in the next few years due to more international flights and new rules that restricted construction. Two-bedroom apartments that have balconies and are within five minutes of the town centre sell at EUR €275,000 (USD $372,263), while a 5,000 square metre piece of land, suitable for a house measuring 200 square metres has a price tag of EUR €129,000 (USD $174,625). The buyer should set aside about EUR €950 (USD $1,286) per square metre to build the house. Property bargains still abound in the eastern mountains of Barbagia where farms and deserted homes are sold at unbelievable low

prices. For instance, a large ruin set on 12,000 square metres of land in Palmadula near Argentiera Beach sells for only EUR €105,000 (USD $142,142). Property buyers should be aware that while Sardinia covers 1,850 kilometres of coastline and 500 hectares of natural reserve, it is one of the most protected areas in the Mediterranean. A combination of geographical beauty, a good climate and rising property prices are great incentives for prospective investors to organize a meeting with representatives of Banco di Sardegna, Banca di Sassari or Banca di Credito Sardo to investigate the transfer of funds to buy properties on the island. The first two financial institutions based in Sassari and the last one in Cagliari. Just as known tax havens such as Switzerland and Liechtenstein are caving in to pressures from the global community in terms of transparency transparent (in the light of rampant tax evasion practices), Sardinia is now free of custom duties, VAT and excise taxes on fuel. The town of Porto Scuso is also the first free trade zone, established in February 2013 and based on Article 12 of the Sardinian Statute, amended by the regional parliament in October 2013. In terms of this legislation Porto Scuso was declared an Autonomous Region of Sardinia, enclosed by the surrounding sea, with the access points at both sea and airport. The laws of the European Union and Italy regulates the Sardinian Free Trade Zone and are also in force in Livigno, Campione D’Italia, Gorizia, Savogna d’Isonzo and the Region of Aosta Valley. For those in search of an established market that boasts the potential for steady, if not spectacular rental returns, a conservative investment in the Sardinian property market may be worth investigating. The addition of great local foods and fresh produce, eaten overlooking some of the best views in the Mediterranean region only add to the allure of property in Sardinia.

SARDINIA

SICILY WHERE THE SUN SHINES BRIGHTER By Jonalyn Fulo Fortuno

ince the 18th century BC, Sicily has played an important role in the foundation of some of the world’s greatest civilizations, hosting citizens and administrative branches of ancient superpowers such as Greece, The Roman Empire, The Vandals, Byzantine, Arab, and Spanish bureaucrats and citizenry. Over the centuries, these empires provided a wonderful historical and artistic legacy, turning the island into an enviable prize for powers in search of a Mediterranean base. Strategically located at the central part of the Mediterranean, Sicily has the largest

land area and is the fourth most populous Italian island possession. It covers around 25,708 sq. km. with over 5 million inhabitants, at a population density somewhat higher than the national average. The island is one of the five autonomous regions in Italy, meaning that it is a separate political entity with its own president and regional assembly. It also has its own language - Sicilians have a dialect that deviates from standard Italian. The culture on the island is entirely different from that of mainland Italy, the result of colonisation by different civilizations. The resultant eclectic mix of influences provides visitors and investors with an experi-

ence that can be both challenging and enormously rewarding. But this unique identity, combined with stunning array of architectural, cultural and natural sights all contribute to the Islands singular appeal. For many there’s simply no better island in the Mediterranean to enjoy the sun, sea, culture, cuisine and rich legacy than on Sicily. As Lonely Planet puts it, this is an island is where “the sun shines brighter, the shadows are darker, and life is lived full on and for the moment.” Although the Sicilian beaches, particularly the blue flag-rated ones, are often the major draw cards that lure tourists from

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Keeping to the Coast

The interior of the island is rocky, sparsely populated and largely inaccessible, though in parts extremely beautiful. Most tourists enjoy sea, sun and sand along the coast.

around the world, the island is also a haven for nature-lovers, foodies and art buffs. On the southern end of Sicily, for instance, nature lovers are enthralled by Vendicari’s wide variety of flora and fauna. And if they happen to visit this region in the autumn, those exploring the island will be presented with the spectacle of thousands of migrating birds including flamingos, herons, and storks leaving the island to see out the winter in the warm plains of Africa. On the eastern side, it’s hard to miss the striking feature of Europe’s highest volcano, Mount Etna, which charmed even the greatest philosophers and poets in ancient time, with the likes of Pindar, Virgil and Empedocles drawing inspiration from its smoking caldera. It’s not just the scenery that’s incredible in the island. Its cuisine is also widely recognised as worthy of exploration, thanks in part to its Michelin-starred restaurants. In addition to these high-end establishments, the island also boasts a wide selection of trattorias that guarantee an authentic Sicilian feast. Among the best places to eat out include Catani (which serves the Sicilian version of pizza and pasta), Bagheria (known for its traditional Sicilian dishes), Donnalucata (if you’re after excellent food and wine) and Syracuse (where the best ice cream parlor on the island can be found). Sicilian cuisine is also said to embody the various cultures that inhabited the island. For instance, many of the sweet Dolci desserts are said to be heavily influenced by Arabic cuisine, while the use of olives and figs is a sign of Greek influence. However, the most distinct proof that the island was once a cultural crossroads is its impressive selections of historical and archaeological sites, ranging from Agrigento’s Valley of the Temples, Palermo’s catacombs of Frati Cappuccini to Val di Noto’s baroque cities and Syracuse’s Ear of Dionysius. To say that the island has it all is no overstatement. It’s a complete package and many holidaymakers eventually buy a vacation property in Sicily. Aside from the undoubted charms of the island an investment in the Sicilian property market has the potential to deliver above average returns. There are no restrictions governing foreign owner-

The best of both

Sicily is the largest island in the Mediterranean, boasting a mix between ancient and modern.

ship, however issues over transfer of title can sometimes arise - due to the fact that Sicilian property is usually a family inheritance. That is why foreign buyers are always advised to enlist the help of a bilingual lawyer during the course of the buying process. Choosing a location also needs careful consideration given that Sicily has good collections of property spread across the island that compete with a variety of different charms to attract the investment of those interested in making the island a home, or increasing the value of their portfolio. Making investment even more attractive is the fact that the market has been affected by the 2008 global recession with property prices were down an average of 25% across the island. In an article at New York Times, real estate agency Homes and Villas Abroad con-

sultant Marta Callegaro, confirmed that the Sicilian property market is currently a buyers market - with northern Italians, Americans, Canadians and Britons particularly drawn to the value proposition. “Sellers now are more willing to negotiate, and certainly a 10 percent discount on the asking price has almost become the standard. We’ve even seen some 20 percent discounts, but 10 percent is the more standard discount that we’re seeing,” she said. For as little as USD $13,000, one could get a home in the charming town of Cianciana which is known for its magnificent view of Sicani mountains as well as the local countryside. In fact, The Raw Story reports that award-winning English film and television actor Ray Winstone just recently bought a USD $65,000 farmhouse which he plans to renovate at the cost of EUR €1.3 million (USD $1.75 million). Due to the incredibly low prices, Cinciana has seen strong interest from British, French, Norwegian and Polish investors. “We have just signed off on 140 sales to British, French, Norwegians and Poles, as well as a few Canadians and Chinese. Prices

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SICILY

are very low. A house needing repairs can cost from 10,000 to 30,000 euros. An apartment or a renovated house from 60,000 to 80, 000,” says the town mayor, Salvatore Sansemi. Another choice is Sicily’s upscale resorttown Taormina, which also offers good deal for investors. A two-bedroom condominium can be bought at around EUR €300,000 (USD $405,956). Other resorts in the northeast coast which are proving magnets for savvy investors include Messina, Catania and Giardini Naxos where prices per square metre start at around EUR €2,000 (USD $2,713). “Second-home buyers are looking for summer places other than the well-known Sardinia, mainly on the northeastern coast where international tycoons and other VIPs go to see and be seen,” says Dilleta Spinola, Sales Manager at Rome Sotheby’s International Realty. The island’s south coast is also attracting keen interest from foreign buyers, little

Second home haven

Sicily is a haven for secondhome buyers, but in general Italian owners largely outnumber the European and international visitors.

wonder given its extraordinarily beautiful coastline, coupled with long stretches of sandy beaches and nature reserves, plus rugged cliffs. A three-bedroom terraced house in Saracusa is priced at EUR €125,000 (USD $169,629), while a four-bedroom detached villa sells for around EUR €250,000 (USD $339,258), according to Rightmove.com listings. In Noto, one of Sicily’s famed baroque towns, property prices for country houses start at EUR €100,000 (USD $135,703), depending on size.

However, it should be noted that the real estate market here is a relatively new phenomenon, so there are certainly pitfalls for the unwary. Sicily has a reputation as clannish and the Mafia is not the stuff of legends. The islands reputation has affected market sentiment, even though the influence of the Cosa Nostra has grown weaker in recent years. Investors also need to be aware that there are risks when investing in a new market as it is highly susceptible to economic slowdown and capital growth is not always assured. As Huw Beaugie, founding director of villa rental agency Think Sicily, puts it “People were not willing to take risks in a relatively new market like Sicily.” Many investors flock to the more established areas in Italy such as Tuscany, Umbria and Venice. But if you’re looking for a place to stay during holidays (or even spend your golden years), then Sicily is full to the brim with both history, natural beauty and value for money possibilities.

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SICILY

REST OF THE

ITALIAN ISLANDS By Jonalyn Fulo Fortuno

lthough Sicily and Sardinia are arguably the most popular islands in Italy insofar as leisure investment, when it comes to investments that will provide extra rental income, there are other options that are worth a second look. These islands may not be the first port of call for international investors but tourists holidaying in the Italian Islands have voted with their feet and their pocketbooks, making some of the less popular islands viable alternatives for investment consideration.

Procida Off the coast of Naples lies a hidden gem which is flying under the mass-tourist radar. Noted for its picturesque villages with pastel-hued houses framed by sun-bleached streets, Procida boasts a low-key lifestyle and old world charm. The island takes pride of its medieval ruins such as the 15th-century Palazzo D’Avalos, an 11th century Benedictine abbey and Terra Murata which is a walled medieval town.

Unlike Procida, Lipari has not escaped the legions of tourists looking for an offshore summer escapade from the sometimes-crowded mainland. One of its dominant features is the acropolis of the Greek Lipara which is perched high on a volcanic outcrop. Its archaeological museum is also worth a visit as it houses most of the artifacts found around the medieval castle when it was first excavated in 1946. Lonely Planet describes the island as a comfortable and developed base for island hoppers as it has plenty of places to stay, eat and drink.

Levanzo (Aegadian) Visiting the smallest of the Italian islands, Isole Egadi is like a step back in time due to the relative absence of motorised vehicles. The fact that

Isola Bella Its name epitomises the beauty of this small, but perfectly formed island located on Lake Maggiore approximately 400 metres off the shore of Stresa. Isola Bella is one of the Borromean Islands, which include Isola Madre (Madre Island) and Isola dei Pescatori (Pescatori Island) Charles Dickens was so smitten by its charms that he wrote, “for however fanciful and fan-

tastic the Isola Bella may be, and is - it still is beautiful.” Situated in Lago Maggiore, the island is famed for its beautifully landscaped gardens and elaborate baroque palace which was built during the 17th century as a gift from Count Carlo III Borromeo to his wife Isabella D’Adda.

Elba Described as a “man-sized” island, Elba has it all in terms of modern convenience and comfort. But unlike the other islands, which tend to have been roughly treated by modernisation, and in many cases almost ruined for visitors, Elba has been able to preserve its natural heritage, beautiful landscapes and coastlines. This preservation has led to the beaches of Elba becoming famed for its clear blue sea and dazzling beaches that are said to match those of the Caribbean.

Alternative Investments Some of the smaller Italian islands have great investment potential.

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Lipari

it only has around 200 inhabitants also adds to the feeling that the world has passed this attractive island by. Visitors are drawn to an impression of simple island life filled with days of tranquility, an increasing rarity in this day and age. When exploring the island, you are likely to exhaust the possibilities of its caves and beaches in short order, so plan accordingly. The most popular tourist spot is the prehistoric cave painting in Grotta del Genovese.

CYPRUS EVERY CLOUD HAS A SILVER LINING

Rich history

Mycenean Greeks, Persians, Crusaders and Ottoman pashas have marked this unique island.

roperty investors in search of value and potential medium and long-term returns will find property with enormous potential on the island of Cyprus. The third largest and most populous island in the Mediterranean is still grappling with the impact of the Eurozone crisis on its national economy, resulting in home prices plunging by an average of 5.7%. The global financial contagion has also done its part by lowering the financial barriers to entry into the market, attracting legions of foreign investors from as far afield as Mainland China.

Cyprus, however, is more than just a destination where investors can buy affordable homes. With its sub-tropical climate, the country is an ideal hideaway for Europeans who want to escape from the harsh winters of the North. Cyprus has the warmest climate and most comfortable winters in the Mediterranean portion of the European Union - with a yearly average temperature of 24C during the day and 14C at night. Perhaps it was the inviting climate that attracted waves of settlers such as the Mycenean Greeks various empires and conquerors, including Ptolemaic Egypt, the Roman Em-

pire, the Byzantines, Arab caliphates, the French Lusignan dynasty and Venetians before enduring 300 years of Ottoman rule. Placed under British administration in 1878, Cyprus became independent in 1960 and a member of the European Union in 2004 and the Eurozone in 2008. As a presidential republic, Cyprus has a head of state elected directly by citizens for a one five-year term. The 59 members of the House of Representatives likewise serve for five years. Until the recent monetary crisis, Cyprus was classified as an advanced, first world economy with a very high Human Development Index.

ÂŠ ROGOJEL / CSX

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By Vittorio Hernandez

All that changed in June 2012 when the Cypriot government sought EUR €1.8 billion (USD $2.44 billion) in foreign aid to support the Cyprus Popular Bank. Rating agency Fitch downgraded the country’s credit rating to junk and said Cyprus would need EUR €6 billion (USD $6.13 billion) more to support its banks. In March 2013, Cyprus agreed with the Eurogroup to split the Laiki Bank into two, with the “bad” operations to be shut down over time and the “good” part absorbed by the Bank of Cyprus. In exchange for these banking reforms, the European Commission, European Central Bank and the International Monetary Fund provided another EUR €10 billion (USD $13.54 billion) in bailout funds. Notwithstanding these economic setbacks, some good news came Cyprus’ way when a significant quantity of offshore natural gas was discovered in the Aphrodite offshore gas field. Although Turkey is disputing the validity of the claim based on a border dispute. Turkey has threatened to deploy its naval forces if Cyprus starts drilling at Block 12 of the claim.

A perfect balance

Mixed architectural inheritance and great natural beauty combined with a rich history make Cyprus a prime property investment destination.

Much to no ones surprise the debacle did not devolve into a shooting war and drilling commenced on September 10, 2011 with no untoward incident. Although Cyprus - like its neighbour Greece, is saddled with debt, the country’s natural and man-made attractions draw in millions of tourists. The country plays host to about two million tourists annually, making it the 40th most popular destination in the world. Tourism contributes about 10% to the GDP. The bulk of tourists are northern Europeans, mostly Britons, followed by Russians, Greeks, Germans and Swedes. Besides being attracted by the warm climate of Cyprus, tourists are also drawn to the historical and cultural attractions of the island as well as its sun-drenched beaches.

Historical sites are also a great attraction. Paphos, a Byzantine fort originally built by Alexander the Great and considered a Unesco World Heritage site is extremely popular, as is the House of Dionysus, Limassol Fort and Castle and the Walled City of Nicosia. The beauty of Cyprus has encouraged many tourists to invest in second homes on the island and these buyers today include not just the traditional Europeans but Chinese investors who are growing in number, according to Cyprus Property News. In fact the bulk of the property purchasers are no longer Britons but these Chinese investors who are awash with new money. Interest from Asia is set to add significant numbers to the 60,000 expats settled on Cyprus. Citing data from the Department of Lands and Surveys, Property News reported that investors from overseas are snapping up properties in the capital city Nicosia, Limassol and Paphos. In 2012, 4,118 properties were sold to foreign investors in the first seven months of that year, a number which declined 48% to 2,133 in 2013.

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CYPRUS

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The Civil Registry and Migration Department of Cyprus said it got 445 applications from Chinese seeking permanent residence visas in 2013, up from only 29 in 2012. The ripple effect of the so called ‘Golden Visa’ are being felt across the region and is attracting great interest from Asia.

Average home prices According to the president of the Chinese Friendship Association in Cyprus, over 1,000 Chinese nationals have purchased properties on the island, 80% in Paphos where the average price of a landed home is EUR €390,513 (USD $528,956). Home Overseas explained that Paphos is the most sought-after destination for foreign investors due to the combination of great natural charm, wonderful climate and wide selection of high-quality property, including properties with magnificent sea views, access to golf estates or wild inland vistas. Given the popularity of Paphos it is interesting to note that among the five administrative divisions of Cyprus, Paphos is the second-most expensive market in terms of average house price. The top is in the capital city where average price is at EUR €475,409 (USD $543,972). Christiana Alexandrou from Cyprus Dream Homes also recommends Larnaca as a good place to bag a bargain, since it has a main airport, exceptional beaches and is extremely

Immerse yourself

A heady mix of cultural influences will satisfy history buffs. World class beaches and sparkling waters offer an escape from the sometimes hectic nightlife characterised by crowds of British and lately Russian holidaymakers and expats.

central. She also identified nearby villages such as Livadhia, Meneou, Pervolia, Aradippou as popular choices of home buyers. Litsa Chrysostomou of BuySell Real Estate added that Larnaca properties are 15% cheaper compared to homes in Paphos, Limassol and Nicosia, but have shown a steady increase in value. She also suggested Tersefanou village where a PGA golf course development is planned. The development would include a helipad, five-star hotel restaurants and horse stables. For those who might prefer Paphos, Chrysostomou said homes in Anarita and Mandria are very popular and provide good capital gains and steadily improving rental return. Other Paphos properties worth looking into are the Polis and Coral Bay property in Peyia which will likely have a new marina very shortly, and Aglantzia - where a new university will soon be established.

Meanwhile, buyers of old properties in Nicosia’s Old Town can make use of government subsidies of up to 40% for renovations, deductible from their taxable income. A bonus is that rental income from such properties is tax-free and the transfer fee is waived. For Frazer Feamhead, Director of The Armchair Property Investor, the best places to invest on Cyprus are in the Larnaca and Famagusta districts because of valuations that are expected to rise between 15% and 20% annually. Rachel Constanta from The Quality Group, a property developer, pointed to villages farther west such as Mazotos, Alaminos, Alethriko, Zygi and Kalavasos as offering a more serene environment for property buyers seeking peace, quiet and a back-to-nature lifestyle while still being close to all the amenities. These areas provide investors with a variety of off-plan projects and unit prices are expected to rise by about 15% once construction begins. Until 2008, Cyprus was logging robust home price increases of 21.09% year-on-year, however, the global financial crisis changed all that with the housing market registering a decline a year after. In 2009, according to Global Property Guide, residential property index dipped 2.1%, followed by 3.89% in 2010 and 5.67% in 2011. It was not only home prices that were moving southward but also demand for property. By April 2013, property sales were down 38%

CYPRUS

Hidden in plain sight

to just 285 contracts as domestic sales (which made up 59% of all sales) fell across all districts The Central Bank of Cyprus forecast that the housing market decline would likely continue for some time, while the nation’s economy is projected to register double-digit contraction. With overseas sales accounting for 41% of the market, Cypriots may not be delighted that the law of the land allows foreigners to own at least one home in the country – however this investor friendly attitude is certainly contributing to keeping the property market from tanking completely. Foreigners can hold land freehold, although there is a limit of 3 donums or 4,014 square metres. It is also a plus point for Cyprus that it is relatively easy to secure a permit to register property with the help of a lawyer. Recently, the j.Cypriot government followed the example of Spain and offered permanent residence visas to non-EU nationals who purchase properties worth at least EUR €300,000 (USD $406,370). As of end of 2012, 50 permits were issued and another 600 were being considered, reported A Place in the Sun. To acquire property, the foreign investor must apply with the Council of Ministers and include bank reference, criminal records, size of land and a statement that the property is the only home he or she would own in Cyprus. The approval process usually takes about 12 months during which the investor can make use of the

property. If the application is turned down, the investor could apply again or has up to 17 years to sell the property. Transaction cost for property purchases includes a progressive transfer tax beginning at 3% for properties worth up to EUR €85,430 (USD $115,719) and a maximum 8% for properties valued at EUR €170,861 (USD $231,432) or higher. However, if the purchase is a new real property, it is subject to Value Added Tax (VAT) of 17%, which rose to 18% on January 14, 2013 and further went up to 19% on January 13, 2014. But first-time buyers of property with a land area less than 250 square metres enjoy a reduced VAT rate of 5% for primary and permanent residence for the next 10 years. The legal fees of solicitors are from EUR €850 to €1,730 (USD $1,151 to $2,343). Stamp duty also has progressive rates, beginning at 1.50% for properties within the EUR €5,000€170,000 (USD $6,773-$230,286) bracket and 2% beyond EUR €170,000. By law, the minimum agent’s fee is 3% Cypriot agents often charge 5% of the purchase price as commission. Risky investment? The Royal Institution of Chartered Surveyors (RICS) warned that buying property in Cyprus was considered risky investment even prior to the banking crisis. It cited the 3.3% year-on-

year contraction of the country’s GDP, the rise of 14.7% unemployment and the pronounced slowdown in mortgage and corporate lending. RICS likewise noted the falling rents across Cyprus at 3.3% for apartments, 2.6% for houses, 5.5% for retail units, 4.3% for warehouses and 2.5% for offices. The not-so-rosy outlook was shared by rating agency Fitch which said that “Cyprus has no flexibility to deal with domestic or external shocks and there is a high risk of the (recovery) program going off track, with financing buffers potentially insufficient to absorb material fiscal and economic slippage.” In the latest edition of Cyprus Property News, the prognosis took a turn for the worse as the property market was “sinking into total oblivion” based on 2013 property sales plummeting to their lowest level on record “with no signs of a recovery in the near future.” So it’s not good news for property owners, but is it time now to start investing in Cyprus property? Property developers are taking note of growing Russian and Chinese investors replacing the usual band of Britons. These developers are adopting similar to strategies as those being used by Spanish and Portuguese developers that have resulted in a significant boost in overseas investment. In the last eight months of 2013, total foreign investment reached EUR €500 million (USD $677 million), a very significant number, taking into account the size of the market. The Property Forum discussion board recently posed a thought provoking question: “The darkest hour is very often before the dawn and while there may still be a few more hours of darkness for the Cyprus real estate market, perhaps the bombed out prices available today are beginning to offer some value?” Certainly worth a look for those in search of a second home, and perhaps a golden visa.

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Away from the well trodden tourist trail and safe from the nightclub crowd is another Cyprus. Cool mountain villages and welcoming Cypriots can add another layer of pleasure to those who purchase second homes or investment properties on the island.

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MALTA AN AGE OLD FAVOURITE By Vittorio Hernandez

known to have inhabited the island during pre history. By around 2500 BC the culture disappeared, with the residents probably falling victim to famine or disease. The islands were depopulated for several decades until Bronze Age immigrants came with their culture. Eventually, Phoenician traders, who used Malta as a stop on their trade route, joined natives

A new twist

If foreigners are willing to hand over 1.15 million euros, or USD $1.55 million they can buy a Maltese passport. The island is selling citizenship for USD $880,000 in cash and USD $677,000 in property and investments.

on the island in the area now called Mdina. Later, the islands came under the control of Carthage then eventually became a part of the Roman Empire. The ownership of the island swung back and forth with several cultural and religious groups taking control until finally in 814 Malta became part of the British Empire as part of the Treaty of Paris. It gained independence from the British on September 21, 1964. The island’s long history and numerous cultural influences has provided visitors with a fascinating look into the melting pot of the Mediterranean region and is only one of the reasons that the island continues to fascinate and intrigue both casual visitors and those that choose the island as a destination for the purchase of a second home or investment property. As a republic with a parliamentary system, Malta has 69 members of parliament. The Mal-

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he book - Acts of the Apostles in the New Testament recounts that St. Paul was en route from Crete to Rome to face trial when his vessel was shipwrecked on the island of Malta at around AD 60. St. Paul stayed on the Mediterranean island for three months and performed much good, including including healing the sick. Like St. Paul, many people still consider Malta a good stopover destination. In fact the island, which measures only 316 square kilometers and is one of the world’s smallest but most densely populated nations, attracts 1.2 million tourists a year. That is three times Malta’s estimated population of around 400,000. Archeological findings going back to 5200 BC suggest that Stone Age hunters or farmers were the first settlers in Malta - arriving from Sicily and making the Sicanis the only tribe

warm climate draws visitors and property investors, mainly Britons. Global property prices dropped in 2008 but Malta was spared the worse of the property woes that affected much of Europe, especially the Mediterranean countries. Property prices on the island have declined at an annual rate of 2.7%, reported Malta’s Central Bank. Prior to the 2008 global financial crisis, Malta had a residential construction boom and property prices grew 20.3% and 13.3% in 2003 and 2004, respectively, however those days are both literally and figuratively long gone. Among the current buyers are foreigners - traditionally Britons and Scandinavians. However today there is increased interest from

A cultural melting pot The coastal cliffs of Malta have seen generations of invaders and settlers take possession of the island.

Middle Eastern, Russian and Chinese buyers in search of lifestyle investments. These buyers are attracted by the tax-efficient system in Malta where residents enjoy one of the lowest levels of income tax on the European continent.

Property ownership law Unlike France and Greece which has liberal property ownership laws for foreigners, Malta has a raft of restrictions applicable to all nationalities including European Union nationals. The country limits foreigners, including those from the EU, to the purchase of one property in Malta, aside from specially designated areas, as mentioned below. The Telegraph recommends Naxxar, Rabat and Lija for retirees and expats with young families in search of character homes in secluded but community-minded villages. The restored townhomes and period maisonettes have price tags averaging GBP £200,000 (USD $328,515), while vintage palazzos with garden courtyards, mosaic pools and rooftop terraces are significantly more expensive – with prices beginning at GBP £375,000 (USD $615,967).

63 © BAZYLIK100

tese Constitution mandates that the president appoint a prime minister from the MPs, while the president is appointed for a five-year term by a resolution of the House of Representatives. The president’s role as head of state is mainly ceremonial. The present PM is Joseph Muscat. Malta’s income was traditionally derived from economy used to depend on cotton, tobacco and shipyards for export, but the opening of the Suez Canal in 1869 boosted the islands’ economy as more ships docked for refueling. The country has three large natural harbours on the main island – Marsamxett Harbour for yachts, Masrsaxlokk Harbour which is the main cargo terminal and the 11th busiest container port in Europe, and the Grand Harbour that has been in use since the Roman times. It only has one airport - the Malta International Airport, the base of the governmentowned Air Malta, which links the island to 36 destinations in Europe and North Africa. Since 2008, EasyJet, Ryanair and Scandinavian Airlines introduced or increased direct routes to Malta from UK and Sweden. Malta continues to depend on foreign trade, but film production has become a major contributor to its economy, beginning in 1925 when Sons of the Sea, was shot in Malta. Since then, the islands have been the location of more than 100 feature films partly or wholly shot there. Achieving advanced economy status could partly be attributed to Malta’s very high 99.5% literacy rate, courtesy of compulsory primary and secondary education as well as the University of Malta, which provides tertiary education. Malta hosts nine UNESCO World Heritage Sites made up of the Hal Safliene Hypogeum, Valetta and seven Megalithic Temples, some of the oldest free-standing structures in the world. In addition, it has a number of architectural and historical monuments, plus its

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MALTA

Purchase of a second property is only allowed in the five special designated areas of Tigne Point, Potomaso, Cottoenra, Manoel Island and Chambray. In these specially designated areas, foreign investors have shown particular interest in the Madliena Village in Gharghur and Ta Monita in Marsascala where more than 30% of buyers are from countries other than Malta. One-bedroom apartments sell for GBP £130,000 (USD $213,534), while a luxury penthouse unit that comes with full property management services costs a minimum of GBP £1 million (USD $1.64 million). If the buyer is not from the EU, he is required to secure an Acquisition of Immovable Property (AIP) Permit from the Ministry of Finance which usually takes three months to process the permit, according to Global Property Guide. To be given the permit, the tag price on the prospective property must be at least EUR €69,900 (USD $94,670) for an apartment and EUR €116,500 (USD $157,782) for other types of properties. Bank receipts are needed as proof that the funds came from abroad so that the same money could be repatriated if the property is sold later. The foreign property owners are allowed to rent out their units only if the property is worth over EUR €233,000 (USD $316,564), has a swimming pool and registered with the Hotel and Catering Establishments Board. Leases should only be for short periods of time. Rental returns have relatively low yields of about 4%, when compared to properties on

A long history

Malta has been inhabited since around 5200 BC and a significant prehistoric civilisation existed on the islands prior to the arrival of the Phoenicians. Later the islands were the seat of the Order of Knights of the Hospital of St John and then part of the British Empire.

other Mediterranean islands. Many agents and investment advisors, specialising in property on the island recommend buying in areas such as Sliema, St Julians, Valletta and St Paul’s Bay for higher rental yield rates. To get around the limit on purchases by foreigners, advisors suggest securing Maltese residency, which would also cut tax bills significantly. Residents are not liable for a capital gains tax on sale of property after three years of ownership. By taking advantage of the Maltese Residency Scheme, a foreigner will be charged a flat tax rate of 15% based on a minimum tax liability of EUR €4,200 (USD $5,688), while non-residents are taxed for income brought into Malta up to 35%. To qualify for Maltese residency, the applicant must have assets of at least EUR €350,000 (USD $474,049) or an annual income of EUR €23,500 (USD $31,830) outside of Malta. If despite the restrictions, a foreign national still wants to buy property in Malta, thankfully he or she can expect a fairly straightforward process. The fact that the Mal-

tese legal framework governing the purchase of property is relatively investment friendly and offers a degree of protection for the purchaser makes investment even more popular. Upon completion of the property purchase, deeds are presented. The legally binding contract must be in English. For those evaluating a property in Malta it is worth noting that purchase costs are considered moderate to high, when compared to alternatives in the Med. Upon signing a contract, the buyer must pay 10% of the selling price to serve as a deposit. The purchased must also surrender 1% of the selling price to the notary public as stamp duty to register the purchase agreement. It is paid to the Commissioner of Inland Revenue. The stamp duty for the property transfer is 5%, the remaining 4% is paid within 15 days after the final deed of sale has been signed. The Notary fee is around 1% of property value and the registration fee varies, depending on the property value. Real estate agent’s commission is between

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MALTA

3% and 5% plus 18% VAT, paid by the seller if the buyer was found via the services of a Registered Real Estate Agency under a sole agency agreement. If not under such agreement, the commission is 5%, but if the buyer is found through the services of a private broker, the fee is only 1%, plus 18% VAT. Another cost is capital gains tax, charged at a flat rate of 12% on the transfer value or selling price. That is one option if the property has been held by the seller for less than 7 years. The seller could also select to be levied at progressive rates with a maximum 3% of net gains. Like other EU members, Malta sought to attract more property investors after the global financial crisis to help the national economy recover, even though Malta recorded a decent 2.7% GDP growth rate in 2011. While the old Maltese Permanent Residents (MPR) Scheme managed to attract about 15,000 migrants over 20 years the number was soon eclipsed by the High Net Work Individuals Residents (HNWIR) Scheme which replaced the MPR in September 2011.

Under the HNWIR, applicants who reside in Malta for at least 90 days a year and buy property worth at least EUR €400,000 (USD $541,783) or spend EUR €20,000 (USD $27,089) a year in rent will enjoy significant benefits. Those who meet these requirements enjoy low income tax rates of around 15% with a minimum tax payable of EUR €20,000 (USD $27,089) a year. Dr. Pierre Mifud, a tax consultant, acknowledged that the new scheme is one of the elements that help keep Malta’s economy going. Of course the new regulations are an attractive incentive for a certain type of property investor as well. That partly explains why property prices in Malta remain competitive when compared to rival destinations such as Cyprus and Portugal. The decline in home prices in 2008 and 2009 led developers to provide investors with more choice of developments featuring highquality homes at attractive prices. Aiming at a new generation of investors these develop-

ments are in sought-after districts like Fort Cambridge in Sliema and Pendergartens in St Julians, with prices starting at GBP £120,000 (USD $197,103). Meanwhile, premium resort projects like Tigne Point and Portomaso feature a mix of luxury homes, commercial outlets and leisure amenities. The avant-garde remodeling of the Valletta Waterfront is also attracting fresh interest from overseas buyers. Maltese banks are offering home loans to foreigners to help sustain investor confidence, disclosed Douglas Salt, Director of agents Frank Salt. There is a joke among Maltese that when God finished creating the world, he shook off the dust from his fingernails and from that dust was formed Malta – however the dust certainly isn’t deterring investors. Malta has shown that it can match the drawing power of other islands in the region with its offer of lower taxation, while setting unique property buying rules on its own terms. Worth a look.

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MALTA

CROATIAN ISLANDS PROVIDING A VALUE FOR MONEY ADRIATIC DREAM By Vittorio Hernandez

Paparazzi Favourite

Hvar Town is a global media darling, with architectural glories playing host to the rich and famous transiting from luxury yacht to cocktail bar.

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ÂŠ BRACODBK / WIKIMEDIA COMMONS

roatia has an interesting history, reaching back into the 8th century when the Croats arrived in the country that is today their homeland, part of the now defunct Yugoslavia. The Croats initially established a principality which became a kingdom in 925 and formed a union with Hungary in

1102, They joined the Habsburg Empire in 1527, eventually seceded in 1918 and a few weeks after that became part of the Kingdom of Serbs, Croats and Slovenes, more commonly known as Yugoslavia. Yugoslavia became a republic in 1943, and in 1991, Croatia became an independent unitary democratic parliamentary republic. It became the 28th member-state of the European Union in 2013.

The head of state is the president of the Republic of Croatia who is directly elected by voters for a five-year term, which is a maximum of two terms. The present president is Ivo Josopovic who started his term on February 18, 2010. But the government is in reality headed by the prime minister, who wields real political power and has four deputies and 17 ministers.

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CROATIAN ISLANDS

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The service sector is the main driver of the Croatian economy, contributing 66% of the country’s GDP in 2010. It is followed by the industrial sector and agriculture sector. The International Monetary Fund (IMF) classifies Croatia as a high-income market economy based on its nominal GDP of USD $63.842 billion and per capita income of USD $14,456. In 2009 Croatia faced the challenges of a global financial crisis, as well as the attendant eurozone crisis – these events proved too much for the fledgling economy of a young democracy. Croatia was plunged into recession. Standard & Poor’s and Moody’s quickly downgraded the country’s credit rating to junk status and in September 2013 a Fitch downgrading added to the economic woes. The country is also grappling with a high unemployment rate of 19.1% as of September 2013, up from the average 8.9% from 2007 to 2009, making it the third-highest unemployment rate among EU nations. Tourism accounts for 20% of Croatia’s GDP with the industry estimated to have earned EUR €6.61 billion (USD $8.94 billion) in 2011. The country receives over 10 million tourists annually, majority of whom are from Germany, Slovenia, Austria and the Czech Republic. Croatia lies on the southern part of the European continent, sharing borders with Slovenia, Hungary, Serbia, Bosnia and Herzegovina and Montenegro on its north, east and

south, many of which are competing for a slice of the property investment pie – making the region an interesting, if occasionally volatile investment destination. To Croatia’s west is the Adriatic Sea, giving it access to some prime coastal real estate. On the opposite side of the sea is Italy. Given its location, the bulk of Croatia enjoys a moderately warm and rainy continental climate, with the warmest areas along the Adriatic coast being characterised by Mediterranean climate. As a part of the main European continent, Croatia is accessible by land through different European routes and four Pan-European corridors. By air travel, Croatia has seven international airports in the cities of Zagreb (the capital), Zadar, Split, Dubrovnik, Rijeka, Osijek and Pula. Since it is bordered on its west by the sea, the country has several seaports, the busiest of which are in Rijeka for cargo and Split and Zadar for passenger vessels.

Carefully managed

The coastal parts of Croatia have been carefully conserved while the interior is still a haven for families, backpackers and hikers. Image: Creative Commons

House prices still declining In common with other European economies, Croatia’s economy also contracted during the 2008 global financial crisis – and the economic downturn continues, affecting the housing market as manifested by a continuous decline of house prices, according to Global Property Guide. Data from CentarNekretnina, one of Croatia’s most popular property websites, showed that the average asking price of apartments in Zagreb went down 5.5% in the last 12 months to September 2013 at EUR €1,593 (USD $2,154) per square metre. For the same period, homes along the Adriatic Coast dipped in price by a smaller 3.3% to EUR €1,581 (USD $2,138) per square metre. Save for Gornja Dubrava and Sesvete which logged 4.7% and 0.9% growth in home prices respectively, most regions still suffer from a downward spiral in value. In 2009 and 2010, the national property price index dipped 4.8%, which dropped to 1.3% in 2011. However, the following year, the price decline grew again by 3.1%. Along with the drop in property prices is the decreasing number of housing permits issued in 2013 by a drastic 32%, data from the Croatian Bureau of Statistics said – an indication that the economy and personal savings continue to come under pressure. On top of the 2008 financial crisis, the recent Eurozone sovereign debt crisis negatively impacted Croatia’s housing market and economy. The country’s 2013 growth rate was in the region

CROATIAN ISLANDS

of negative 0.6%, according to IMF data. However, there is a pale ray of sunshine - in 2014, the country is expected to expand and register a 1.5% GDP growth rate. Given the steadily decreasing prices of property in most areas of the country, including its offshore islands now should be a good time for overseas property investors to buy homes in Croatia. A startling fact is that apartments in Zagreb have price tags of EUR €2,000 (USD $2,705) a statistic that beggars belief. Unfortunately, acquiring property in Croatia by foreigners is a difficult process. The Global Property Guide described it as tedious and restrictive mainly due to the following three limitations: 1 To acquire real estate, foreign buyers must come from a country that has a reciprocity agreement with Croatia, which means Croatians could also freely buy property in the country of the potential buyer. Only few countries such as EU members (except Italy), the US, Russia and Hungary have such an agreement with Croatia. Italians, Swiss and Bosnia and Herzegovinans could purchase property if they plan to live in Croatia permanently.

3 The Law on Property Ownership and Other Real Rights disallows foreigners from buying agricultural and forestland as well as properties considered protected as cultural monuments. 4 However, foreigners can rent property through a company. Leasing entails payment of 25% VAT that can be charged as a business cost. Rental for housing is exempt from the VAT.

Should these hurdles be overcome, the interested buyer must be aware the total transaction costs in Croatia are high, between 13.76% and 21.93% for old properties. Real estate agent’s fees alone are at 6% to 12%, often split between the buyer and seller. Real estate trans-

Roughguides.com lists 10 Croatian islands that offer different activities that potential visitors or homebuyers would be interested in. These are: Susak – Located off the coast of Losinj, its cliffs makes the island the perfect choice for kite flyers Rab – This island is for those who want less crowded beaches where attitude for clothing is fairly relaxed, meaning you can go nude sunbathing! Silba – A pedestrian’s paradise because there are no cars on this island while bikes are banned from mid-July to late August. Murter – The island for people who love festivals, starting with the Garden Festival in July, followed by the Electric, Elephant, Soundwave, Souncebeat and Stop Making Sense festivals, making Murter a long summertime party venue. Solta – The ideal isle for walkers and cyclists, featuring less traveled trails and unspoiled interiors as well as half-forgotten Kasbah-like villages with stone houses. Hvar (1) – The favourite Croatian island of travel magazines, featuring architectural marvels and celebrity jetsetters vacationing in the isle. Hvar (2) – Family-oriented, unspoilt and affordable island that represents the other side of the Adriatic life. Proizd – The island for sun worshippers where the rocks change colour from grey to gold during sunset. Mljet – This is the island for romantic people, featuring village accommodation, nature walks and quiet bays.

The British daily, the Independent, said Croatia’s hot spot is the Istrian peninsula in the north-west, particularly the upmarket Opatija and the inhabited isles of Brac and Hvar. Also

attracting buyers are the southern cities of Split and Dubrovnik, a Unesco World Heritage City. The approval of a law in the 1980s prohibiting development on the waterfront in order to protect the nation’s coastline resulted in only few beachfront resorts being developed, such as the five-star Dubrovnik Sun Gardens. This situation and the fact that Croatia is one of Europe’s fastest-growing visitor destinations is resulting in strong rental demand, said Julian Houchin of iO Adria. iO Adria is a resort owner with three golf resort projects planned in Istria and three marine resort projects in northern Dalmatia. Houchin said iO Adria offers 207 oneand two-bedroom flats with sizes between 44 and 111 square metres and prices tags of EUR €170,000 to €608,000 (USD $230,000 to $822,257). Investors do not require enormously deep pockets because the Erste Bank in Vienna is offering 15 year mortgage deals for the iO Adria properties. Interest rate is fixed at 6.6%, while loan-to-value is 60%. Potential buyers who want to finance their purchases through bank loans are advised by Miranda John, International Manager of SPF Private Clients, a broker, to seek advice from a UK-based mortgage broker that has experience arranging finance in Croatia. This advice should be carefully considered. The country’s banking system is not particularly robust or efficient and mortgages to non-residents are not very common business transactions. One interesting feature of the Croatian tourism rules is that apartment owners must make their units available for rent if they are not living on the property. Dubrovnik Sun Garden actually limits owner’s stay to 35 nights at peak season, maximising rental income. In 2011 (when the marketing of the development was at its peak) a one-bed unit with the view of the sea rented for EUR €245 (USD $331) a night during the peak season, meaning that the flat owner earned a very respectable EUR €10,290 (USD $13,917) in just six weeks, split 50-50 between the unit owner and the management company. On the 1 July 2013, Croatia became the 28th member of the EU after a decade of carrying out all the reforms needed to bring it into line with EU laws. This recent event could be a game changer insofar as foreign ownership of property is concerned.

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2 The buyer must secure the consent, via an administrative act, from the Ministry of Foreign Affairs for the sale to be finalised. The process takes two to six months since it involves the Croatian Ministry of Foreign Affairs determining if a reciprocity agreement is in place.

fer tax is 5%, although that tax is not collected on the first sale of new buildings, but the sale is subject to 25% VAT on net construction value. So, still interested in a Croatian property? Global Property Guide recommends looking into properties at Zagreb, the capital city, known for being a chic, cosmopolitan area with a lively café culture.

TURKISH ISLANDS

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ust like Sicily, Turkey had also once been a crossroad of civilizations, bridging the gap between East and West and, in the process, eventually transformed itself into a major power in the European continent during the early modern period. However, it was during the fall of Ottoman Empire that the country evolved into what it is now today-- a modernised, economically stable and highly competitive nation. Over the decades, Turkey had gone through astonishing transformation from a seat of Byzantine Empire to a fast-rising economic powerhouse that is set to outperform many debt-laden European countries. The country made its economic debut in 2010, after the global financial downturn, in which it

By Jonalyn Fulo Fortuno

was able to log a stunning 9.2% rise while most economies could barely expand half as much. Although it also felt the pinch of crisis, Turkey was able to weather the effects thanks to the essential reforms passed by its lawmakers, including monetary policy measures, expansionary fiscal policies, financial reforms and appropriate interest rate adjustments. Because of its stellar economic performance, international rating agency Moody’s

Sanctuary

The Turkish Islands are a blissful Aegean escape from the often overdeveloped mainland coast.

Investors Service took notice and recently raised Turkey’s sovereign rating to Baa3 and gave it a “stable” outlook of its investment status, which was a first in more than two decades. Of course, such is welcome news not just to the local players but also to the global investors who were once hesitant to invest in the country. And although there have been political noise of late, the optimistic outlook for Turkey is likely to bring in a “whole new investor base” which would certainly bode well to the bulk of its FDI. “I think Turkey is one of the strongest emerging markets out there right now. It boasts a stable government, good demographics, access to lots of interesting markets (and well diversified), a pretty decent financial system and corporate governance,” says Ian

TURKISH ISLANDS

Bremmer, president of risk –analysis consultancy Eurasia Group. Its strategic geographic location is also a major factor in redefining the nation as an investment hub. It helps that it serves as a gateway between Europe, Middle East and Central Asia because foreign investors are encouraged to establish their international headquarters in the region. More importantly, it could easily draw real estate savvy from these three continents to set up investment holdings or expand their portfolios due to its excellent link. In fact, Turkish real estate market accounts for significant portion in overall foreign direct investment. In 2012, purchases in the sector bulked up by 31% to USD $2.6 billion, thanks largely to the healthy buying appetite of UK which contributed around USD $2 billion. And with the changes in reciprocity law—which now allows foreigners to purchase any Turkish property— strong interest from buyers around the world, particularly those from Arab countries, is expected to fuel the market to expand further. Another significant move that guarantees a strong surge of foreign interest is the changes in residency laws. Accordingly, foreign nationals who purchase a Turkish property regardless of its transaction value, are rewarded with a year-long residency permit. The same thing goes for foreigners who obtain a work permit

Stable, institutionalised, internationalised sector, thanks to predictable inflation rates and consistent prices.

Dematerialisation, transparency, auditing, high quality and standards, institutionalisation and statistical information in line with the ongoing EU accession process.

60% of Turkey’s population is under the age of 34, while the country’s GDP was USD $736 billion in 2010.

Housing loans increased from TRY 3.5 billion (USD $1.54billion) in 2004 to TRY 68 billion (USD $ 29.97billion) as of September 2011. The share of housing loans as a proportion of Turkey’s GDP is estimated to hit 15% in 2015.

About 28.5 million tourists visited Turkey in 2010, making Turkey the 6th mostvisited holiday destination in the world. These figures show the great potential of the Turkish real estate sector in relation to the tourism industry.

The number of modern shopping centers increased from 44 to 284 between 2000 and 2011.

Turkey, as a regional hub, providing easy access to 1.5 billion consumers in Europe, the CIS, and as an energy corridor and terminal between Europe, Central Asia and the Middle East, creates more and more enterprises each year within its borders.

Unchanged and unspoiled

Unpretentious and for the most part unchanged, the Turkish Islands are scenic, fertile and volcanic, boasting healthy pine and oak forests.

as they too are automatically granted a residence permit. Expectedly, the foreign-friendly laws created a favourable result in the property market as indicated by the steady rise of property values, particularly for new developments in which average price is up roughly 14% yearon-year. “The good news for investors considering purchasing a property in Turkey is the combination of rising prices and the fact that buyers can now get more for their money,” says property firm Universal 21 director, Monica Anca. Turkey’s real estate market had long brought itself in the mainstream, consistently earning global approvals as reflected in the positive results of different surveys and publications which lay the platform for investors. One example is PricewaterhouseCoopers (PWC) and the Urban Land Institute (ULI)’s “Emerging Trends in Real Estate Europe” survey in 2012, which showed that Istanbul, in particular, is the most attractive market in Eu-

But that’s not all there is in Turkey. Beyond the friendly investment climate and bullish market sentiment, it holds the world’s interest through its extraordinarily beautiful tourist attractions. Whether it’s the architecture, arts, and

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rope. Another is Ernst & Young’s “European Real Estate Assets Investment Trend Indictor 2013” survey which hailed Turkey as the second most attractive market in Europe for investors. And as the market rose to prominence, there are several factors that investors should take advantage of when eyeing investment opportunities in the country. Turkey’s Investment Support and Promotion Agency enumerated several vantage points on offer:

ancient ruins or scenery, entertainment and beaches, there is always something for everyone. Apart from these, it’s also one of the cheapest holiday destinations in the Mediterranean, not to mention world’s seventh mostvisited tourist destination. And a holiday in the country wouldn’t be complete without hopping to any of its islands known for their white sandy stretches framed in wonderful surroundings. But as there are about 500 islands and islet, narrow your choices to Princes’ Island, Gemiler Island (also known as St Nicholas Island) and Alibey Island. Nestling in the Sea of Marmara, around 20km southeast of Istanbul, Prince’s Island is perhaps the most popular island in the region. Although just an hour away from the city, Prince Island exudes an otherworldly feel. Perhaps, it has something to do with the absence of all motorised vehicles as the

Value added destination

Azure waters, fields of oleander and wild thyme and sandy beaches with mountain backdrops and natural springs pure enough to drink from make the Turkish Islands a nature lovers dream.

only means of transport here are bicycles and horse-drawn carriages. Nevertheless, the island has Turkish beach clubs, but it pays to book in advance because they are usually jampacked on high summer. All things considered, the island is perfect for a day escape especially if you want a sea, sun and some quiet time. But if you want all things historic, then Gemilar Island is the ideal place. It is said to contain significant medieval remains: from the Byzantine ruins, ancient religious buildings to

ceremonial passageways and the original resting place of St. Nicholas, among others. Another destination that would surely appeal to neoclassic enthusiasts is Alibey Island. Named after the Turkish War of Independence hero, Cunda (as known locally) proudly wears history in its sleeve. It is also littered with historical structures such as churches built in late 1860s and monasteries. Moreso, the old Greek stone houses as well as the Greek Moonlight Monastery are still in existence in this part which makes it all the more appealing. Besides these, there are also some incredible beaches in the island which are perfect for beachbumming. Little wonder that Turkey is also a popular destination for holiday home buyers. Indeed, a Turkish property makes a good addition either in one’s investment portfolio or private assets because it certainly delivers, however you want to use it.

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TURKISH ISLANDS

FEATURE

FEBRUARY • MARCH 2014

Iskandar MEGA PROJECT

Looks to Maintain Momentum in 2014 By the end of October 2013 the Malaysian development corridor had attracted over RM129.4b USD 38.6b in investment.

I WWW.PROPERTYLIFENEWS.COM

By Steve Mallach

Temasek and its Malaysian counterpart, Khazanah Nasional, are also jointly developing two wellness projects in Medini with a total development gross value of RM5.2 billion (USD $1.6b). Last month, Iskandar Waterfront Holdings sold 15 ha of seafront land in Danga Bay for RM1.6 billion (USD $479m) to Hao Yuan Investment, which is planning a RM8 billion development featuring, among others, peninsula Malaysia’s tallest tower. In October 2013, Singapore billionaire Peter Lim unveiled plans for his RM5.5 billion (USD $1.65b) Vantage Bay project. 2014 might be even more exciting for those following the developments in Iskandar Malaysia. Medini is looking to raise some RM2.5 billion (USD

Paradiso Nuova

Capital Gains exempt investment

$749m) when it goes public and Iskandar Waterfront Holdings is on track for a USD $300 million IPO toard the end of 2014.

SINGAPOREANS TAKE ADVANTAGE OF MEDINI CAPITAL GAINS TAX EXEMPTION. There is absolutely no doubt that the property boom in Iskandar has been dominating conversation amongst investors in Southeast Asia and across the pan Asian region. Attractive potential returns, a clear regional growth and infrastructure development plan and Iskandar Malaysia’s proximity to Singapore, one of the region’s most vibrant business and tourism hubs has provided the impetus for investment in a variety of sectors, includ-

skandar Malaysia finished off 2013 on a high, after sustaining investor interest from Singapore and further afield. The seven year old economic corridor saw investment numbers climb steadily as developments across the board gained momentum and infrastructure began to take shape. Iskandar recorded some impressive numbers last year and continues to attract investor interest. Here are some highlights: As at Oct 31 last year, Iskandar Malaysia had attracted RM129.4 billion (USD $49.8 billion) in committed investments - 44 per cent of which has been realised. The development corridor is on track to meet a target of RM383 billion by 2025 and GDP of USD $93.3 billion. Cooling measures put in place by the government might be causing some hesitation amongst property investors. Iskandar Malaysia expects to secure RM22 billion (USD $6.6b) in investments this year, aiming to beat the RM21 billion (USD $ 6.3b) invested in 2013. Iskandar’s integrated planning and vision is still powering new levels of interest from investors. Singapore is still by far the biggest investor in Iskandar Malaysia, accounting for 16 per cent of its total foreign investment as at June last year. Last February, Temasek Holdings and CapitaLand signed a deal with Iskandar Waterfront Holdings to build a USD $3.2 billion township in Danga Bay, featuring luxury condominiums, shopping malls and bungalows.

FEATURE

FEBRUARY • MARCH 2014

ing property. The Iskandar Development Region (IDR) in Johor, Malaysia is three times the size of Singapore and can be considered an appropriate destination for Singapore companies that are seeking to expand their businesses in a location which offers lower land prices and a cheaper talent pool. Generous government incentives and assistance to Singaporean companies wishing to invest in Johor have also played their part in increasing investment activity. However there has been concern that the frenzied investment activity may have caused both unrealistic expectations in terms of potential investment returns, as well as a looming hous-

ing bubble. The regional government sought to prevent the formation of a bubble through a variety of mechanisms unveiled at the end of 2013 – including a real capital gains tax. This tax means that as from January the first 2014 properties that are sold within three years of purchase will be subject to a capital gains tax of 30%. This is substantially different to the 10% for property sold between the third and fifth year as promulgated in Budget 2013.

Stylish Iskandar investment

Paradiso Nuova apartments and artists impression of Western Sky Lounge option.

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The implications of the real capital gains tax are not deterring Singaporean investors in particular – especially since developments in the Medini area are exempt from the ruling. At least according to some of the larger developers. Selected developments, such as Paradiso Nuova in Medini Iskandar (with an estimated gross development value of RM2.6 billion or USD $778m), which broke ground on the 9th of January 2014 are offering investments that are exempt from the capital gains tax, as well as the newly promulgated minimum investment value of RM1 million and above for properties purchased by foreigners. Zhuoyuan Iskandar, a joint venture between Chinese property developer Zhuoda Group and Malaysia’s Iskandar Investment Berhad, developers of Paradiso Nuova, have gone on record saying that they have been assured of the capital gains tax exemption status of their development by the Iskandar Regional Development Authority (IRDA). To date nearly half of the bookings (approximately 200) for Paradiso Nuova have been made by Singaporeans. Malaysian’s have booked 40% of the units and the rest of the bookings have been made by mainly Chinese and Indonesians. “The properties in Medini are tax exempted and not subjected to the minimum price threshold policy. They are also not subjected to quotas and affordable housing requirements which basically means that all the new cooling policies are not applicable to projects in Medini. This has made Paradiso Nuova more attractive to prospective buyers,” said Zhuoyuan Iskandar sales and marketing director Liang Thow Ming. IRDA has reached out to the Malaysian Ministry of Finance to confirm the exemption from the real property gains tax. It has also written to the Johor Land Office on the area’s exemption from the minimum investment value of at least RM 1 million (USD $299,000). Until then, potential buyers of developments such as Paradiso Nuova can only register an interest to buy. Developers need to obtain the Advertising Permit and Developer Licence (APDL) in order to allow registration of the deals. At an average price of RM950 (USD $284) psf, the units cost between RM600,000 (USD $180,000) and RM1.6 million (USD $479,000). To date most of the bookings are for the smaller sized units.

Lifestyle style Life OUR HOMES ARE MORE THAN BRICKS AND MORTAR – THEY ARE A REFLECTION OF OUR PERSONALITIES AND HAVENS OF COMFORT WHERE WE ENJOY THE COMPANY OF FRIENDS AND FAMILY. THEY ARE BASES FROM WHICH WE

The lifestyle feature

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provides information on

AND PLAN THE RECREATIONAL

trends and products that

ACTIVITIES THAT KEEP US GROUNDED IN THE FACE OF AN EVER MORE COMPLEX AND DEMANDING WORLD.

are shaping our lives - and our homes. From automotive excellence, to leisure activities, interior design as well as sound and vision each edition of Property Life readers will find information on products and services that make modern life both more interesting, and more enjoyable.

FEBUARY • MARCH 2014

W W W . P R O P E R T Y L I F E N E W S . C O M

P R I N T

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TA B L E T

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Advertise with us! Property Life is changing the way Asian buyers find international property information. With a Website, print magazine, and an iPad version, Property Life offers readers and advertisers the results they want in the format they demand. Our efficient database marketing ensures that Property Life gets into the hands of real property buyers. And it is distributed in the world’s major financial centres, including New York, London, Hong Kong and Singapore. If you’re interested and ready to target Asian property buyers, then you should not miss our advertising and email offers. Call us at +65 6534 9390 | E-mail us at advertising@panashcomedia.com or go to www.propertylife.asia/advertising Like us on Facebook

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FEATURE

FEBRUARY • MARCH 2014

MOVING

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UP IN THE WORLD R

esearch has shown that purchasers of new homes will very likely also purchase a new car within six months of taking ownership of their new homes. If one takes into account that very often the motivation for the purchase of a new home is changing personal circumstances, such as the birth of a new child it is not a great leap of logic to extrapolate that for many people the purchase of this new motor vehicle is one that will be motivated by the desire for more seats in order to accommodate the increased size of the family. For these consumers the more spacious Mercedes-Benz models are undeniably attractive and consumer loyalty to the brand in Singapore has never been stronger. Mercedes-Benz was the top-selling car brand in Singapore in 2013, beating previous market leader BMW, which had been top dog 2011. According to figures released by the Land Transport Authority (LTA) in January 2014, Mercedes-Benz sold 3,871 units of new cars last year while BMW sold 3,730. Toyota claimed the third spot, with 3,459 units sold. “We are proud to clinch the title of Singapore’s top car brand of 2013. This clearly shows that we are on the right track towards our goal of becoming the global number one premium automaker by 2020, and reaffirms our position as a premium automaker of legendary vehicles,” said Mr Wolfgang Huppenbauer, President & CEO of Mercedes-Benz Singapore.

2013 saw Mercedes-Benz take top sales spot in Singapore from rivals BMW. Why are homeowners still in love with these iconic German automobiles?

FEATURE

FEBRUARY • MARCH 2014

Power and poise

Above: Luxurious interior finishes and powerplant - M-Class. Facing page: The classically refined CLS Shooting brake.

So what are the models that appeal to the motoring consumer segment that is interested in family sized space? Two recently launched Mercedes-Benz models have attracted global attention – the M-Class and the CLS Shooting Brake (leaving aside the E-Class Estate – another barn stormer from the design team in Stuttgart). If the latest figures from Singapore are any indication, motorists and pedestrians will be seeing many more of these on the roads of the Lion City. CLS SHOOTING BRAKE The new CLS Shooting Brake sees MercedesBenz is unmistakably a coupe in its proportions, but the stretched version opens up significantly more space with five doors and a roof that extends all the way back to the boot. CEO of Mercedes-Benz, Dr Dieter Zetsche was quick to point out that the CLS Shooting Brake combines obligatory functionality with more ephemeral appeal. “Functionality is obligatory for a vehicle, what sets the car apart is a special fascinating quality unmatched by any other automobile.” While ‘fascination’ may be difficult to define what is immediately apparent is the attractiveness of the CLS. A crouched posture

seems to beg the driver to unleash the power under the bonnet. In essence this is a sports car with space for the shopping. The five doors and loading space make it the ideal family runabout – yet the sporty pedigree differentiates it from mainstream family movers. There’s no apparent compromise between sportiness and stowage space. The second generation CLS also has another handcrafted design quirk, which adds to its already enormous appeal. The luggage compartment is lined with top quality carpeting, but lift the carpet and the Designo wood luggage compartment floor crafted from American cherry wood combines with the fumed ok inlay work and aluminium rails to give the impression of a classic yacht deck. Available in five variants, with options far too numerous to list within the scope of this very brief look at the CLS this is one of the most beguiling options for a family on the move. THE NEW M-CLASS The third generation Mercedes-Benz M-Class is amongst the best in its class when it comes to energy efficiency, consuming around 25% less fuel than its predecessors. This is now

Third generation M-Class

Comfort, luxury and class leading design.

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combined with a number of new chassis developments and innovative dynamic handling control systems which further enhance the handling and sure footed nature of the MClass, leading to a richer, more immersive and dynamic driving experience. Dr. Thomas Weber, member of the Board of Management of Daimler AG and responsible for R&D summed up the appeal of the M-Class: “With the M-Class it’s always been a case of combining the comfort and luxury of a saloon car with the off-road characteristics and emotiveness of an SUV.” The luxury of the new M-Class is matched by more than capable off road capabilities. The 4MATIC permanent all-wheel drive system, electronic traction control and off-road mode mean that all the M-Class variants are at home both on the tar and in the dirt. Adding to the levels of comfort and the adaptability of the M-Class are the wide range of driving modes (six in all) that optimize the drive according to conditions. The driver can select from one auto mode, two special off-road modes and three on-road modes using the rotary control mounted on the centre console. State of the art engines and a very slippery shape have led to significant efficiencies in the new M-Class, but it’s more than just numbers with this automobile. When the Mercedes designers set our to make the car fuel efficient they also managed to produce an M-Class model that is as attractive on the outside as it is sumptuous on the inside. With more interior space and seats designed to ensure long distance comfort this is an SUV that begs to be driven both in town and on longer journeys. 2014 is shaping up to be another exciting year for both Mercedes-Benz and consumers who find the brand as iconic as ever. With a wider range than has previously been the case, including some interesting entry level and smaller vehicles aimed at the younger driver Mercedes-Benz has enhanced its multigenerational appeal. We cannot wait to see what they have in store for Singapore and the wider Southeast Asian market during the Year of the Horse.

FEATURE

FEBRUARY • MARCH 2014

ilCielo

Privacy

The private 8 seater dining room is perfect for intimate corporate functions.

Fine Dining at The Hilton Hotel Singapore

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I 80

n this issue of Property Life we are examining the Islands of the Mediterranean and our editorial staff has faced a demanding challenge. This challenge is how to engage with your readers when a constant theme runs through any article that explores of these diverse and fascinating investment destinations, and that is cuisine. It is almost impossible to understand the soul of the Mediterranean without first understanding the complex yet honest gastronomy that characterises the region. Fresh ingredients and balanced flavours vie with subtlety and blended pairings of diverse taste and texture result in meals that are a complete sensory package. In celebration of the bedding down of this edition the Property Life team treated themselves to an afternoon at Il Cielo, on the 24th floor of the Hilton Hotel on Orchard Road in Singapore. We were lucky enough to enjoy the attentions of Fabrizio Aceti, Hilton Singapore’s

Executive Chef who ably covered for Il Cielo Head Chef Omar Gabriele Bernardi who was unfortunately not available. Sommelier Stephanie Rigourd was on hand to assist with wine pairings. Safely ensconced in the private dining room Property life enjoyed some of the most carefully crafted dishes it has been our pleasure to experience. The private dining room seats eight and is perfectly suited for business presentations, followed by lunch, or dinner.

TO BEGIN WITH Our first introduction to the artistry of Il Cielo was the freshly baked black olive breads with truffle butter. Best enjoyed with a drizzle of olive oil limiting yourself to a single one of these pint sized treats is difficult. However, in light of the fact that we were to be treated to the chef ’s carefully selected amuse-bouche we succeeded.

FEATURE

FEBRUARY • MARCH 2014

The delightful breads were followed by Chef Omar’s take on the humble pizza, which we are assured is a firm favourite as a starter and table snack. It’s no wonder that patrons enjoy Il Cielo’s take on the humble pizza. All organic ingredients and subtle playfulness in the handmade sausage elevated what could have been a pedestrian dish. It’s worth noting that the pizza bases are constructed from kamut, a rare type of grain originally from Egypt, buckwheat and spelt – giving the base a unique texture and a welcome organic twist.

ENTREE’S Starters, including the Insalata d’ Astice, a light Lobster Salad served on Buffalo Mozzarella with an orange dressing and a Carpaccio of fresh scallops are both worthy of your time. Finished at your table, the Burrata Fatta in Casa is a justifiably famous homemade Buffalo Milk Burrata (resembling Mozzarella, but infinitely more creamy and subtle). The heirloom tomatoes that accompany this dish are of course organic, but that label does little to explain the pairing of the two on the tongue. This is simple Mediterranean faire taken to a new level of simple delight.

MAIN COURSE Suffice it to say that course after magnificent course followed this introduction to the cuisine of Italy, fresh Sea Bass, taken from the Adriatic was baked and served on an olive wood platter – giving the firm white flesh an outdoorsy, natural smoky flavor which was perfectly offset by a light sauce and fresh vegetables. All that was required was a deft hand with a dash of citrus and the result was a dish that proudly proclaimed its ocean heritage. The Olive crusted Colorado Rack of Lamb with Truffle Mustard was finished to perfection and the grass fed lamb served with fresh organic garden vegetables was one of the highlights of a meal that was complimented by two light Italian wines which Sommelier Rigourd explained would perfectly highlight both the subtle and the bold flavours which were presented as each course reached the table.

WINE The first was a light Italian white a Gavi, Michele Chiarlo 2012 which magically transformed the dairy and fish courses into even more of a sensory delight, while the second, a light red Barbera d’Asti, Albino Rocca 2011 (epitomising the Italian approach to the grape), was simply perfect with the meat dishes. Strangely enough, for someone who very rarely drinks white wine I thought that of the two wines the white added more depth to the dishes that it was paired with, lifting the Mediterranean flavours to even greater heights.

perature are given the room and opportunity to convey both the subtlety and fun of this incredible dessert.

SPECIAL MENTION The Singapore Hilton is currently hosting the Calvisius Caviar Indulgence – which has been extended by popular demand. Guests can enjoy a medley of exquisite Calvisius Caviar from Lombardy and Piedmont, Italy paired with il Cielo signatures. Degustation menu from $298++ for two persons.

WRAP UP Set on the top floor of the Hilton hotel, the award winning Il Cielo restaurant has a capacity for 48 persons with 32 seats indoors including a private dining room for 8 guests as well as 16 seats by the poolside. With a panoramic view of Orchard Road skyline, the interiors and surroundings of the poolside provide an urban resort feel. At sundown, diners in the restaurant can enjoy a different alluring ambience in a semi-alfresco setting. The pool area lights with the modern cityscape of Orchard Road and the pool as the backdrop, and when weather permits, the glass screens slide open to let the outdoor breeze in. The restaurant has received numerous accolades, including being awarded the Ospitalità Italiana Seal for quality, authentic Italian cuisine, an Award of Excellence from Gourmet & Travel Singapore and Epicure’s Luxe Dining Selections by HSBC Cards. Il Cielo was also recognised by Tatler by inclusion in the Best Restaurant Guide as well as an entry in Wine & Dine Singapore’s Top Restaurants guide.

Organic Italian

Elegant gastronomy taken to award winning levels.

Opening hours

DESSERT For me the highlight of the meal was the dessert - Ti Ra Mi Su Espresso, a Tiramisu “Il Cielo” Style, consisting of three textures, served at three temperatures. This is one of Head Chef Omar Gabriele Bernardi’s signature dishes and one of which he is justifiably proud. The trick is to use the spoon to scoop out all the layers from bottom to top at the same time, ensuring that the delightful interplay of taste and tem-

Lunch —12NOON – 2.30PM MONDAY – FRIDAY Dinner —7PM – 10.30PM MONDAY – SUNDAY Sky Bar —6PM – 12 MIDNIGHT MONDAY – SUNDAY For reservations, call +65 6730 3395 or email ilcielo@hIlton.com Level 24 Hilton Singapore 581 Orchard Road Singapore 238883

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IL CIELO

RENTAL RETURN

GUARANTEED BY PESTANA

SECURE • HASSLE-FREE • ENJOYABLE • PROFITABLE

PANORAMIC SEA VIEWS • On the ‘”Praia dos 3 irmãos” with golden sands reaching the Ria de Alvor. • Along the pitoresque fishing village of Alvor. • Studios and one bed apartments totally furnished. • Luxury penthouse apartments with unbeatable views. • Indoor heated pool, gym and spa facilities. • Hospitality services with quality guaranteed by Pestana group. • Less than 10 km from 4 of the 6 Pestana golf courses in Portugal.

A GREAT INVESTMENT OR AN OPPORTUNITY TO OWN A BEACHSIDE APARTMENT

FOR MORE INFORMATION www.propertylifenews.com/pestana-alvor-atlantico

www.propertylifenews.com/pestana-alvor-atlantico

COMMENTARY FEATURE

FEBUARY • MARCH 2014

First BOSE

wireless streaming system arrives in Singapore.

f you are an audiophile, or just a homeowner who loves audio equipment that sports clean, striking and minimalist design then BOSE has just made your choice of gear extremely simple. The launch of the Bose SoundTouch Wi-Fi Music System in Singapore means that there has been an injection of style into the task of rocking out on the Little Red Dot. The Bose SoundTouch is Bose’s first offering that lets you stream music wirelessly in any room with lifelike audio quality. Atlas Sound & Vision in Singapore are the approved distributors of the latest offering from masters of sound BOSE and the Bose SoundTouch is now available from their branches in a number of different variants.

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SOUND SYSTEM

PRICE IN S$

SoundTouch 30 Wi-Fi System

$1,099

SoundTouch 20 Wi-Fi System

$639

SoundTouch Portable Wi-Fi system

$639

On left: Bose Portable Wi-Fi system. The Bose SoundTouch communicates wirelessly through your home network, and can be controlled from an app that’s available on Android, iOS, Mac OS, and Windows systems.

SoundTouch Portable Wi-Fi system. The three one-piece systems in the Bose SoundTouch family include: 1 SoundTouch 30 Wi-Fi system featuring

exclusive waveguide technology and a new proprietary woofer. This serves as the home’s main music system

2 SoundTouch 20 Wi-Fi system which can

be placed almost anywhere

3 SoundTouch Portable Wi-Fi system com

bines full-range audio, rechargeable, lithium-ion battery in a speaker no bigger than the average book

This allows users to play music from multiple digital music libraries, and also gives access to a wide range of international Internet radio stations like Sky.FM, 181.FM, Radio Symphony, and music services available locally including Deezer and Spotify. The app saves up to six different preset channels which can be easily switched with a simple drag-and-drop system, and also keeps track of up to 50 searches, in case you didn’t save an Internet radio channel and would like to add it to the preset list. Bose SoundTouch music systems are also AirPlay enabled, so owners can stream content from their iPad, iPhone, or iPod Touch, even without the application.

Neville de Rougemont & Associados is an international law firm which   has over 25 years experience in assisting international private and   corporate clients. NDR covers the areas of expertise on foreign   investment, corporate and property matters in Portugal and Cape Verde.

The perfect time to invest in Portugal there has never been a more   investor friendly environment. 2013 saw a growing optimism and interest in Portugal as a place to invest with a focus on the real estate market.

Properties in locations such as Lisbon, Porto, Algarve and the Silver Coast offer fantastic investment opportunities and good value for money.

The Golden Visa scheme facilitates the granting of a residence permit to investors who purchase real estate of a value of at least €500,000, make a

minimum capital investment of €1,000,000 or create a minimum of 10 job positions in Portugal.    This permit allows free movement within Schengen Area and can, under certain conditions, lead to the obtaining of Portuguese nationality.    The Portuguese Governments Non Habitual Resident Status tax regime (NHR) allows international investors who become tax resident in Portugal to enjoy an exemption or reduction on their personal income tax, arising in Portugal or overseas.

NDR is the leading Portuguese law firm advising on the Golden Visa scheme  and advising on the investments of both individuals and companies.

! ! algarve@ndr.pt

NDR would be very pleased to provide further information on the above and if you have any questions please contact:

Avenida Casal Ribeiro, 50, 6th Floor, 1000-093 info@ndr.pt | Fax: (+351) 213 527 619 | (+351) 213 191 290 www.nevillederougemont.com

FEATURE

FEBRUARY • MARCH 2014

NORTHVSSOUTH THE BATTLE FOR NEW ZEALAND PROPERTY SUPREMACY

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shortage of housing in both Auckland and Christchurch has caused New Zealand property prices trend upwards over the past 12 months. The cost of real estate in both cities has now reached levels that were last seen in 2007 after climbing steeply during 2013, according to New Zealand state owned valuation provider Quotable Value. On the North island, Auckland residential property values have rocketed by up to 18.6 per cent annually as Waitakere, part of South Auckland and the North Shore lead properties continue to perform well. On the South island Christchurch values rose just under 13% during 2013. Research Director at Quotable Value (QV), Jonno Ingerson said sales volumes across New Zealand grew month on month until October 2013, when the Reserve Bank’s restrictions on low loan-to-value ratio lending came into force, but that the activity was still less than the boom between 2003 and 2007.

The Reserve Bank imposed the restrictions to head off a potential property bubble which might impact housing markets in Auckland and Christchurch. These two cities typically account for half the nation’s property turnover and fears that a property bubble and a sharp correction might affect New Zealand’s financial stability led to the latest cooling measures. Both Auckland and Christchurch continue to show strong growth figures, however, the underlying factors driving these property markets are quite different. Auckland is being driven by very strong population growth and a critically short supply of housing. Although housing pressure has increased in Christchurch over the past three years, the reason for this is due to the loss of housing stock after the 2010/2011 earthquakes. QV’s Ingerson said Auckland and Christchurch remained the areas where values were rising fastest.

“From the North Shore to Manukau values increased between 15 per cent and 18 per cent annually, and values in Christchurch went up 12.7 per cent. In contrast, the rest of the main centres increased between 2.5 per cent and 4 per cent, apart from Hamilton which was slightly higher at 5.8 per cent,” Mr Ingerson said. “Considering that values in Auckland have now been increasing since early 2011 it is not surprising that they are now 27 per cent above the previous 2007 market peak. Likewise values in Christchurch are 20 per cent above the previous peak,” he said. It is anticipated that Reserve Bank loan to value restrictions were likely to have an impact for at least the first half of this year, with the first signs being the current decline in the number of new listings. Mr Ingerson said Auckland values were expected to keep rising this year as internal and external migration boosts demand while housing supply remains tight.

Auckland A growing population and a thriving real estate market.

FEATURE

FEBRUARY • MARCH 2014

GROWING POPULATION A FACTOR

The latest figures available indicate that Auckland’s population has hit 1,415,550 people, having grown by 110,592 people since the 2006 Census. The city has experienced the largest growth in New Zealand between 2006 and 2013. Tony Alexander, the Bank of New Zealand Chief Economist is known for his positive outlook on the New Zealand property market and is especially bullish on Auckland. Amongst the reasons for optimism that he cites are the following: ▪The shortages of personnel constrained house construction has become worse in the past four years and last year annual consent numbers were at a four-decade low. ▪ The government is explicitly aiming to grow Auckland’s population as a means of achieving “agglomeration” benefits for economic growth that accrues from high interaction amongst economic players. ▪ Over the past four years young people have put off their normal household formation (leaving home, buying their own house) because of worries about mortgage availability, falling house prices, employment, and ability to raise a deposit. Now those four years’ worth of people are looking to “catch-up” on their purchase.

▪ Poor growth prospects in the next few years for Western economies mean that interest rates will remain at low levels for many years. This means low borrowing costs for homebuyers. ▪ The nature of net inward migration ischanging toward greater numbers of people coming from Asia and with Asia’s middle class booming in size, potential inflows of wealthy people are large. ▪New Zealand will move from stable investment destination to growth destination as the economy performs strongly and more opportunities become available. ▪ The Auckland CBD needs more than 500 new apartments each year.

CHRISTCHURCH POPULATION FALLS

One of the key factors affecting the steadily growing property values in Auckland is clearly population growth. Christchurch simply cannot match the numbers. Between the 2006 and 2013 census, Christchurch experienced an inter census population decrease for the first time since 1981. During this seven-year period, the population fell by 6,966 (2%), from 348,435 in 2006 to 341,469 in 2013.

Many pundits are eyeing Christchurch’s seemingly robust rental market as an indicator that demand driven rental is on the increase. This is no doubt true. However this demand is to some extent driven by the rebuild phenomenon (after the recent earthquakes), which continues to drive listings growth and rent increases in the city. “We’re still seeing a significant proportion of short-term, high-rent listings driving the market as displaced home owners move out for insurance repairs,” said Trade Me Property acting head Jimmy McGee Responding to a joint government and industry report released in December 2013, which predicted an unprecedented increase in building activity over the next six years, Auckland Council’s Chief Operating Officer Dean Kimpton said that the significance of the findings for Auckland are clear. “The report identifies Auckland as one of New Zealand’s ‘construction hot spots’, with around a third of building work predicted to take place here. Much of this is driven by the forecast that Auckland’s residential housing demand will more than double. This is consistent with the projected population growth of Auckland over the next 30 years.” Although the statement does not come from an unbiased source the facts seem to support the conclusion that Auckland is a prime destination for property investment. Whether or not a reinvigorated Christchurch can follow in the footsteps of its North Island neighbor remains to be seen.

Portions of this article are based on information provided by All Property Solutions Singapore. APSS offers investors advisory services on property related issues in Australia and New Zealand. Visit www.auspropertysolutions.com.au

Christchurch Short term rental listings are driving an unsustainable market.

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▪ A big fall in apprentice numbers in the past five years coupled with the loss of skilled people to Australia and older tradespeople leaving the sector rather than get licensed means labour-related construction costs will rise.

▪ Banks are not going to step back into the property development sector left bereft of funds from the closure of finance companies.

FEATURE

FEBRUARY • MARCH 2014

Sweet !

THE CANDY AND CANDY GLOBAL PRIME SECTOR (GPS) REPORT SHOWS ROBUST MARKET GROWTH AND ATTRACTIVE RETURNS FOR SOUTHEAST ASIAN DESTINATIONS FAVOURED FOR PROPERTY INVESTMENT BY ULTRA HIGH NET WORTH INDIVIDUALS (UHNWIS).

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By Steve Mallach

TOP FIVE

Leisure Enclaves 1 MALDIVES

Maldives

2 BORA BORA

French Polynesia

3 PHUKET

Thailand

4 NISEKO

Japan

5 KOH SAMUI

Thailand

SOURCE SAVILLS WORLD RESEARCH

he GPS Report, produced in partnership with Deutsche Asset & Wealth Management and featuring exclusive research from Savills, focuses on the global luxury leisure market. The C&C report highlights hot spots where UHNWIs are buying additional homes around the world, together with the more “local” leisure enclaves that are driven by domestic wealth. The report covers regions and destinations across the globe – however given that Southeast Asia is the Property Life beat, we are going to take a look at those destinations which have become essential addresses for the mega rich. Currently Asian second home leisure purchases are concentrated in just a handful of enclaves, namely the Thai resorts of Phuket and Koh Samui, Indonesia’s Bali, and Niseko in northern Japan, which is popular for skiing. Another enclave in the region with global reach is the Maldives, which offers a refined, serviced villa product. It is worth noting that the residence permits that are currently available from many European countries as a method of attracting capital through property investment are altering buying behavior across a number of demographics groupings. There are large amounts of wealth flowing into these countries from sources in the Middle East, Asia, Russia and South Africa, the majority of which is aimed at securing a so called ‘Golden Visa’ and freedom to travel across the Schengen bloc of countries – an option that is today available for a lower initial cost than has historically been the case. Whether the attractiveness of these new investment destinations is enough to cause wholesale change to the buying behavior of UHNWIs and HNWIs remains to be seen.

It is possible that the motivations that underlie the purchase decision are different amongst this demographic and that the desire for leisure opportunities closer to home will negate the lure of the Golden Visa. These are after all consumers with sufficient capital to make long term investments that will allow them access to privileges associated with residency – without having to avail themselves of the value for money option.

PHUKET,THAILAND Phuket is Asia’s most established leisure destination, with extensive infrastructure, ranging from luxury resorts to quality golf courses. UHNWIs are attracted to less developed Surin Beach, which is relatively undeveloped and benefits from a Thai coastal village atmosphere. Surin is located on the preferred north-west island elevation and is home to a group of select luxury resorts and villas. Historically, UK and US buyers were the mainstay of the luxury Phuket market, though today buyers from Hong Kong, India and Russia are present. Villa sales in Phuket vary from $1 million to $3 million in the most heavily traded range, reaching $8 million to $12 million at the premium end. Prices in Phuket have appreciated by just 13% in the past five years, although an increase of 5% was recorded in the first six months of 2013.

BUKIT PENINSULA, BALI The real estate industry in Bali has grown alongside the tourism industry, which has prospered since its beginnings in the 1970s. The island attracted around 7.9 million international visitors in 2012. Ubud, Sanur, Nusa Dua, Jimbaran and Seminyak are the island’s most sought-after destinations. The Bukit Peninsula is commonly known as millionaire’s row, popular with the rich and fa-

FEATURE

FEBRUARY • MARCH 2014

ASIAN MONEY FLOWS TO URBAN CENTRES

200.0

INDEX (100 = DEC 2005)

180.0

160.0

140.0

120.0

100.0

80.0 DEC 05 JUN 06 DEC 06 JUN 07

SAVILLS WORLD CITY INDEX

DEC 08 JUN 09 DEC 09 JUN 10

SAVILLS LEISURE PROPERTY INDEX

mous. International buyers are lured here by the cliff-top views and the exclusivity of the location. Price growth in Bali has been modest over the last five years but rose by 11% in the first half of 2013. Recent price growth has been driven by rapidly appreciating land values, a shortage of new supply and increasing demand from a growing number of domestic UHNWIs. The challenge will be delivering new development to meet demand, while avoiding over-development and maintaining the well known bohemian island vibe

NISEKO, JAPAN The town of Niseko on the northern island of Hokkaido is one of the most popular luxury resort destinations in Japan. Famous for its plentiful powder snow and the iconic Mount Yōtei, this vibrant valley resort is internationally recognised as a world-class ski destination, and as such draws visitors from across Asia Pacific and beyond. Although distinctly Japanese in style, the resort illustrates how, when it comes to catering for global UHNWIs, new resorts and destinations of all types are likely to be an international product with some local flavour. After the launch of direct flights between Hokkaido

PHUKET

DEC 10

BALI

and Cairns in 2005, there was increased Australian demand for holiday properties and development sites. This provided a significant boost to residential prices in the area. Since then, the market has attracted capital from countries such as Hong Kong, mainland China, Singapore, Korea and Malaysia, so international demand for luxury residential property has remained robust. With some large landmark developments being pushed back or halted as a result of the financial crisis, much of the current residential stock in Niseko consists of assets between five and 10 years old. Prices for luxury residential properties in the area range from JPY800,000psm ($750psf) to JPY1.3 million psm ($1,200psf).

ATTENTION ON CHINA To date, additional home purchases by wealthy Chinese buyers have been focused on cities, with a keen eye on prospects for capital appreciation.

JUN 11

DEC 11

NISEKO

JUN 12

DEC 12

DEC 13

SOURCE SAVILLS WORLD RESEARCH

Current cultural norms mean that indoor leisure pursuits are favoured over sun and sea and, as a consequence, Chinese buyers have been found to seek a different product to those from the West. Hainan, an island in the South China Sea has been designated by the government as a major tourist destination. Sanya, on the island’s southern tip is its best known tourist enclave, with Haitang Bay, dubbed the “Chinese Riviera”. Resorts here are developing with China’s specific demands in mind: there is an emphasis on luxury retailers, while hotels and villas are designed with a higher ratio of indoor to outdoor space than would typically be found in a leisure resort. WWW.PROPERTYLIFENEWS.COM

DEC 07 JUN 08

Investment Potential as

Phuket Market Rallies By Steve Mallach

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he property market in Phuket seems to be finding its feet gain after stumbling during the global financial crisis when sales of high end landed properties were in the doldrums. The latest figures from CBRE show that in Q3 the middle to lower end of the market was extremely active, with 80% of the total villa sales for properties priced lower than 15 million baht (USD $455,000). No villas priced over 35 million baht (USD $1,06m) were sold during this period. The CBRE research also showed that there were surprisingly few Asian investors active in the third quarter of 2013 – the main nationalities of villa buyers included British nationals, Italian, German and Russian. These

buyers were focusing on villas with prices less than THB 20 million (USD $607.8m). Meanwhile, properties aimed at High Net Worth Individuals (between THB 35 million and THB 90 million) villa market continued to be slow as there are more choices of units for secondary resale.

The Trisara Villa

The 6 bedroom, 9 bathroom leasehold property will be sold complete with original artworks and antiques (Top Spread). Trisara features unique landscaped tropical gardens and is set on approximately 7,000 sqm of land (Bottom).

Interestingly enough resales started to exceed sales by Q3 of 2013. This is in stark contrast to Bangkok, where buyers are showing a marked preference for new property. However, the action at the very top tier of the market is heating up. Estate agents on the popular island destination are cautiously upbeat on the luxury market. Krista Hunter of Hunter Sotheby’s on Phuket says that recent listings like the three storey private villa estate at Trisara Resort in Nai Thon which is on the market for USD $28m show that sellers are confident that Phuket’s status as a mature and highly favoured leisure destination will be enough to smooth out any remaining bumps in the island property market.

At the upper end of the property scale high net worth individuals prize privacy as much as state of the art finishes and beachfront access. The reason for the focus on a single villa is not only due to the fact that it has broken the record for the most expensive villa listing ever on Phuket – it is also due to the fact that it is extremely difficult to use the listing of properties like this as indicators of a trend. Quite clearly once you reach a certain price point the wider classifications, for example ‘villa’ become pointless due to the fact that the properties are outliers that exist as part of an extremely rarified classification which should

perhaps be known as the ‘mega villa’. Perhaps any property with more than 6 bathrooms should fall into this catagory. Easier to classify and a market that is abuzz with activity and investment potential is the condo category. In Q2 2013, there were two new condominium projects launched in the west coast area; Q Conzept Condominium (Luxury Condominium) and The Viva Patong (Mid-range Condominium). The only new completion was Phummundra - the only luxury resort condominium in the Inland area. The completed property supply grew by 2% when compared to Q2 2012. There are more than 2,800 units in the pipeline that are expected to be completed by the end of 2015. The resort condominium market shows an ongoing preference by buyers for smaller units and sales were best in Luxury projects. The demand from Asian buyers including Thais, Singaporeans, Hong Kong and Mainland Chinese increased from last year. Laguna Resorts & Hotels Plc (LRH), have reported more Asian buyers in recent years, driven by the middle class looking for vacation homes and investment. In 2012, European buyers accounted for 70% of their customers. Now over half of the buyers of Laguna Shores, are Asians. The West Coast continues to be the most popular location, particularly the North West Coast including Patong. Properties that offer sea views, easy access to the beach and a variety of entertainment options nearby are the most popular among buyers. Distance from the airport is also a value consideration.

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The fully furnished Trisara Resort villa is without doubt one of the most impressive properties on the island. Listed as a ‘sophisticated’ oceanfront property the six suite private villa sits on nearly 7,000 sqm of land and features panoramic views across the Andaman Sea. This iconic property includes a private café, spa with steam room and sauna, home theatre, fully equipped gymnasium and two infinity-edge swimming pools. The villa is positioned within lushly landscaped tropical gardens and lawns, which stretch down to the ocean’s edge. This is the first time that the property has been put on the market for sale since it was built. It is actually comprised of 2 villas, with 3 bedroom suites in each – the upper guest villa, and the waterfront main villa. The main villa has its own café, full gym, Japanese sala, spa and steam rooms. Hunter also notes that “Trisara is one of the best resorts in SE Asia, vying with The Amanpuri as number one address. The fact that the Amanpuri has gone viral across the world and yet Trisara has remained a one off gem, certainly adds to its appeal. In my opinion Trisara is located in the most beautiful part of the island in lush tropical rain forests amidst beautiful emerald green coves and the properties there are some of the best kept secrets in Asia. This particular property is without question built to a most discerning standard and is the very best property in Phuket, as regards location, estate, quality material and finishes.”

FEATURE

FEBRUARY • MARCH 2014

IT'S THE A END OF THE

WORLD

as we know it

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By Steve Mallach

cid rain is wiping the grins from the faces of statues, increasing temperatures are searing rain forests, the arctic blast is freezing toy poodles, genetically modified crops are stealing our virility, our cities are on the verge of implosion and the seas are rising to engulf our lawns and flood our ornamental fishponds. We get it. Thanks for the gentle reminders newsfeeds of the world. One of the reasons that we may be in a bit of trouble is that human beings are nature’s generalists. Not terribly fast, not terribly strong, not very resilient and not particularly gifted in the endowment of any of our five senses. Even with these limitations, put us in any environment where there is air to breath and that doesn’t feature temperatures that cause us to immediately burst into flames and we’ll adapt. Given a bare minimum of raw material human beings will create a community that has the neighbourhood cleared and cultivated in next to no time. The problem is that the neighbourhood will also be a microcosm of the world at large as we find it today – where the degradation of natural systems has some very clever people very worried indeed. Fortunately futurists (yes these are real people and that is a real job) have reimagined our future lives and the results are nothing less than mind boggling. Property Life has identified some of the current innovations and key trends that will shape our experience of the places we call home as we head towards a brave new world.

FEATURE

FEBRUARY • MARCH 2014

THE CITY OF TOMORROW Metropolitan areas will be home to nearly two thirds of the Earth’s population within the next half century, but they are breakable, dangerous, and depend on unsustainable forms of energy. Science fiction movies would have us all believe that we will be living in either of two marginally plausible futures – one where steel, Glass and plastic composites shape the city of tomorrow (the Star Trek city) and another dystopian future where the city has decayed under the assaults of over population, climate change and pervasive, unregulated commerce (the Blade Runner City). The truth is that the future may be neither of these. We see around us concerted efforts by both public and private enterprise to find a middle path toward a sustainable urban future. Increasingly that future is a blend of the synthetic and the organic. Our cities may soon be built less like machines and more living organisms, inspired by nature and capable of achieving a balance between the quality of life standards and material needs of its human inhabitants with less attendant waste than has been possible. In Singapore and other cities across the pan Asiatic region we are seeing the vision of architects like Patrick Blanc with his “living walls” of hydroponically-fed plants that stretch up the sides of buildings beginning to transform cities.

Some of the first applications of synthetic biology and architecture may involve high-performance materials like carbon-sequestering concrete that lowers the impact of carbon emissions and contributes to slowing or even reversing climate change. But in the future, architects may be able to reprogram the DNA of plants so that it grows into a building. Then, instead of architects designing plans and sections and bringing all of the construction materials from the factory to the site, architects might be able to design rules for growth and differentiation and material performance. According to David Benjamin, Principal at architecture firm The Living, and Director of the Living Architecture Lab at Columbia University Graduate School of Architecture this process could be what creates new new biological machines – living buildings that might be able to use the nutrients of the land and the natural ecosystem to do both the factory manufacturing and site construction.

Dystopia

The greening of cities and organic structures may lead to a very different future from that imagined above.

IN THE MEANTIME The city of Jakarta, Indonesia may soon see the unveiling of a project that exemplifies the new sustainable approach to urban challenges. Jakarta was originally at the confluence of thirteen rivers which were used for transportation and agriculture. The largest of its rivers is The Ciliwung River, which has become extremely polluted during the last couple of decades. The Ciliwung Recovery Program (CRP) is a project that aims to collect the garbage of the riverbank as well as purifying river water via advanced mega-filters. The clean water is then fed back into the river and to the nearby agricultural fields through a system of capillary tubes.

The majority of current slum dwellers would eventually live and work at the CRP which would in effect become a new city within Jakarta.

THE HOMES OF TOMORROW 1 Goodbye light bulbs

On January the 1st 2014 it became illegal to import or manufacture old style 60-watt and 40-watt incandescent light bulbs in the United States, strict minimum efficiency standards – effectively ending the life of an iconic and revolutionary invention. So what’s going to replace the incandescent bulb in the home of the future? As much as you might dislike the pale sickly light obtained from twisty compact fluorescent (CFL) and the coldly clinical light of the newer LED bulbs, it looks like those are your choices for the foreseeable future.

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ONE DAY WE WILL GROW OUR BUILDINGS

FEATURE

FEBRUARY • MARCH 2014

Green Future

WWW.PROPERTYLIFENEWS.COM

Left: The Living Walls of Patrick Blanc - Paris (top) Capitaland Singapore (below). Above - Garden City concept.

Of course you could select from a range of warmer hued CFL globes – but what if you could import warm, organic light into your home? In the very near future that could be possible. The genes from bioluminescent bacteria have been spliced into those of a common decorative plant called Nicotiana alata, creating ‘Starlight Avatar’ - the first biological light source for your home. This is the first glimpse of a future world where synthetic biology transforms our lives. This plant is being touted by company Bioglow, which created it, as the “first” lightproducing plant. There are many kinds of algae and animals that glow, but this claim may be technically true. The plants don’t give off very much light, but may be a clear sign of things to come.

2 Hello Personal Fabricators

3D printing is on the verge of revolutionising almost every aspect of our lives. This is a disruptive technology that promises to be as ubiquitous as desktop printers are today.

The ability to produce our own products in our very own homes will upset traditional models of manufacturing. At first, we’ll have to pay for these items to download the specs. But eventually, the open source movement will make designs the property of everyman. And in addition to day-to-day items and electronics, these printers could generate medical devices, medicines such as self-assembling robots, and androids.

3 And on that subject The future of food The prospect of lab-grown meat has intrigued both vegetarians and environmentalists for years. Humans eat about 240 billion kilograms of meat each year — a habit that has resulted in a myriad of environmental issues. Now, owing to a USD $350,000 donation by the Thiel Foundation to a company called Modern Meadow, the idea of printing meat using a 3D printer has come that much closer to reality. Modern Meadow was co-founded by Gabor and Andras Forgacs, two tech-entrepreneurs who developed and commercialized bioprinting — a technology that iteratively constructs tissues and organ structures based on computer-controlled delivery of cells in three dimensions.

With Modern Meadow, though, they’re hoping to change the way animal based products are produced. And as it turns out, the prospect of printing 3D meat is proving to be less of a challenge than creating functional organs (another application of the technology). In their grant application to the Department of Agriculture, they noted that because “meat is a post mortem tissue, the vascularization of the final product is less critical than in medical applications.” An early challenge for biologists working on lab-grown meat has been in simulating the taste and textures that are characteristic of meat that was once part of a living, breathing animal. For Modern Meadow, their initial goal is to develop 3D cellular sheets composed of pig cells. They’re hoping to mature those sheets into muscle tissue with electric stimulation inside a bioreactor (which should help give it the desired texture). According to Worldwatch Institute, meat consumption will double by the year 2050 — a trend that will require the production of more than 465 million tons. This is a technology that may make a real difference.

4 New Friends

If you think that Siri is annoying then you may not be ready for the next step in artificial evolution that will be part of your household very soon. Looking ahead, we can expect our personal assistants to fully respond to natural language, including colloquialisms and our personal idiosyncrasies. And owing to ubiquitous computing devices are going to be EVERYWHERE (and you won’t see most of them), waiting for spoken commands or a simple gesture to perform tasks from the mundane to the mind achingly complex. These agents will exhibit an uncanny level of general intelligence. They will know everything about us, including our behaviors, our tendencies, our preferences, and our typical ways of responding to certain situations. Some futurists believe that they’ll be our proxy selves, representing us on the Internet and in the real world by taking the form of telepresent holographic avatars. They’ll write emails for us, book appointments, perform menial thought tasks, and even anticipate our needs – from home cooked meals to our choice of clothing.

CONVERSATION FEBRUARY • MARCH 2014

THE

Vladi

Marvellous Secret to Owning an Island Paradise

Frégate Island Private - Seychelles

A celebrity favourite, providing an idyllic, romantic setting for any holiday. According to the New York Times this island features the most beautiful beach in the world.

f the Mediterranean sounds a bit too pedestrian then perhaps it’s time to leave the madding crowds behind and take ownership of your own private island. Property Life (PL) spoke to Manuel Brinkschulte (MB) from Vladi Private Islands and found out that it’s not just the mega rich who are buying private island real estate. According to Price Water House Coopers VLADI PRIVATE ISLANDS GmbH has sealed over 2,400 island, island-related and real estate deals since its establishment in 1971. Vladi Island’s business model is particularly interesting as the company focuses on islands that fall outside the Southeast Asian region due to what the management sees as significant political and legal risk involved in island ownership.

PL Manuel, firstly thanks for agreeing to have a chat to Property Life. Can you give us a bit of background on your company and how you believe that clients benefit from a relationship with a company that is more than just an online presence, but also registered and licensed professionals, with books audited by a company like PWC? MB Farhad Vladi founded his company in 1971 and sold more than 2400 islands in all four corners of the world. We also take care of the property management of more than 1000 islands for our clients. Being a licensed Real Estate Agency and member of the International Real Estate Federation (FIABCI) for more than 30 years, shows that we can be held responsible for what we offer and play by the rules in co-operation with third party agents who introduce a client to us.

PL What in your opinion is driving the demand for Islands across the globe, what motivates these investors? MB If you buy the fanciest apartment on The Peak in Hong Kong today, it’s likely that there will be an even fancier building next to yours in a few years’ time, affecting your potential resale price – quite simply you’re unique piece of property isn’t so unique any more. An island owner doesn’t face that sort of risk because Islands are a natural phenomenon and therefore a completely unique proposition. The number of islands is limited yet the number of people who can afford an island is increasing. Economics therefore dictates that islands, at least over a long period of time – are appreciating assets.

WWW.PROPERTYLIFENEWS.COM

By Steve Mallach

CONVERSATION FEBRUARY • MARCH 2014

Vladi Private Islands has built a reputation for providing advice to some of the most high profile personalities in the world when it comes to finding a slice of island paradise.

PL You’ve attended the Shanghai Property Show at the end of 2013. Did the levels of interest at the show indicate that Asian demand for private islands is growing?

PL There has been talk that the business

has picked up noticeably in the past 6 months and that this may signal a calming of the turmoil caused by the global financial crisis, at least amongst the ultra rich market segment. What are your thoughts?

PL Can you give our readers some insight into the regions where Asian investors are particularly active? MB Asian clients are investing in small islands on the North American continent or off the coastline. They are interested in inland lakes or the Atlantic. Corporate clients, mainly real estate developers are showing interest in North American islands as well as in some very large islands off Central America and in the South Pacific. There is a lot of de-

mand for islands in the South of France or the United Kingdom, but right now there are only very few islands in these areas on the market. Buyers from Asia, who would like to buy an island for their personal use, have recently discovered Canada’s Southeastern regions as a playground. They seem to love the space and the fact that you can buy a large and fully developed island for the price of a 2-bedroom apartment in a major Asian metropolis. Thanks to property laws that only allow locals to own land, Islands in most of Southeast Asian countries will not play an important role in the private island business anytime soon. Does this bother me? Not at all! I think it would be wrong to allow foreigners to own land in countries with low purchasing power and almost no domestic demand for private islands. Look for example at the Philippines, home to one of the world’s most beautiful archipelagos.

WWW.PROPERTYLIFENEWS.COM

MB Our company has only started promoting private island ownership in Asia less than three years ago, and the demand has grown at an incredibly fast pace since then. In Shanghai we has several enquiries from interested party’s that are resident in Thailand and China for instance.

MB The private island industry, be it sales or rental, has not been affected by the global financial crisis at all. In fact, many clients who bought a private island during the global financial crisis did so to shift assets from classic real estate or stock portfolios to investments which are less volatile.

CONVERSATION FEBRUARY • MARCH 2014

Alone time

Always spend a bit of time testing the waters to see if the isolation of island life suits you.

PL What sort of price points are proving most

popular and can you give us some indication of what these investors are getting for their money?

WWW.PROPERTYLIFENEWS.COM

MB In terms of sheer numbers of inquiries, the

most popular islands right now are what we call the reasonably priced islands in North America. For less than USD $100,000 one can buy an undeveloped 150,000 square foot island in the great lakes or off the Atlantic coast of Nova Scotia - Canada’s most southern region. At a price point between USD $500,000 and USD $ 1 million, one can find a fully developed island as big as 50 acres with a villa, boat dock and the infrastructure needed to take up residence and enjoy the private island immediately. PL Do you have any idea of the other assets

that the buyers will be using in conjunction with their purchase - for instance yachts or helicopters? MB Most of the top of the range islands have

their own airstrip, hangar and marina, making the island easily accessible or host the owner’s big boy toy collection. On some islands you will find submarines and many other types of gadgets.

Check List for Island Buyers - 12 vital criteria Only undercumbered freehold is accepted



Title



Medical

Medical service must be within a 90 minute radius of the island



Fauna

Can you live with indegenous animals on the choosen island (some have mosquitos, sand-flies...)



Flora

Get familiar with trees and plants, pros and cons



Host Country

Social environment, acceptance of forign investment



Access

Is the island accessible? Harbour, anchorage, Landing...



Infrastructure

Water, sewage, electricity, telephone, internet



Building Permit

Availability of permit, size of house, type of development



Climate

Get familiar with the weather and climate conditions



Island Surroundings

Neighbourhood, amenities, service and also crime level



Island Value (Investment)

Island market: locally-driven and/or by foreigners



Island Seller

Notes on dealing with owner directly, licensed agents or third party

PL Are the majority of the islands that are purchased unimproved or do they already have infrastructure? MB Most of the quality islands worldwide have been sold by our company once or twice already since 1971. In most cases, owners of islands in the ‘picturepostcard island’ regions, such as in the Caribbean, Indian Ocean or the South Pacific, have fully developed their island with accommodation, roads, docks, power plants, a water desalination system and wastewater treatment equipment. In areas like Canada, Fiji or the Maldives however it is possible to find islands which can be developed from scratch.

PL Are the buyers intending to use the islands for personal use, or do a percentage of them intend to establish commercial operations (for instance guest houses or hotels)? MB We are working with clients from all walks of life and their intentions range from personal use by the client’s family to building a city for 50,000 people. PL Do you have any advice for those who are contemplating a purchase of a private Island, either in Asia and elsewhere in the world? MB My first piece of advice to anyone who is thinking of purchasing an island for his or her personal use is to “try before you buy”.

Imagine if freehold titles could be legally held by foreigners. The whole archipelago would be owned by the Americans, the Japanese, the Koreans, the Russians and other high net worth individuals by now.

CONVERSATION FEBRUARY • MARCH 2014

Island life is not for everyone. Our company manages more than 1000 islands worldwide for existing clients, we can help those interested find an island for a test-run during a short holiday. Once you have decided to go ahead with the purchase, don’t let your stomach make the decision, but make sure to go through the following checklist, it’ll help you make the decision about what sort of island is suitable for your individual needs or whether island life in general is something that you would enjoy.

MB Islands in the Maldives can only be leased for a period of 25-50 years, which makes the country less interesting for private investors. The increasing popularity among developers is driven by the growing numbers of tourists from Asia, especially China and India visiting the Maldives. PL How robust is the rental market for

private islands at the moment?

PL What sort of trends do you see for the future in terms of the purchase of private islands across the world? MB In the last years, mainly due to the uncertainties that came with the Credit Crunch and the Euro crisis, there is an increasing demand by ultra high net worth individuals who wish to diversify and invest a part of their fortune into something that isn’t related to FOREX trading, the stock-market or classic real estate. PL Can you give us some idea of how many people visit your website each month and how they can keep up to date with the latest

market releases and other news in the private island market segment? MB We currently receive around 100 enquiries through our website per week, plus another 20-30 on our social networking platforms as Wechat (China) and Facebook. It goes without saying that many of the messages and questions we receive can’t be taken very seriously and are probably submitted by teenage boys who just watched a rerun of “LOST”. Questions range from: “May I grow Cannabis on my private island?” to “Can I start my own country on my island?” However, every message to us will be answered, because who who our future buyers will be? Around 10% of the people who are contacting us are seriously interested to buy an island. Many clients who visit our office in Hamburg come with the dream of a tropical island and leave with plans to inspect a lake island in Canada. To accumulate information about the latest market releases and other news in the world of private islands, we have launched the dedicated website www.privateislandnews.com.

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PL Why is the Maldives becoming increasingly popular at the moment?

MB It’s pretty buoyant as holidaying on private islands is becoming increasingly popular pursuit. People are seeking exclusive destinations and privacy is getting more and more important. Especially for high-profile characters and celebrities who want to spend their holidays away from prying eyes and media. Prince William and Kate, for example, spent their honeymoon on a private island in 2012.

FEATURE

FEBRUARY • MARCH 2014

Motown rebounding — Detroit property good value. By Staff Writer

DETROIT IS THE BIRTHPLACE OF AMERICAN AUTOMOTIVE ICONS THAT BRING DAILY PLEASURE TO ENTHUSIASTS AROUND THE WORLD - IS IT NOW A HOT INVESTMENT DESTINATION?

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F 100

rom the first real muscle car, the Pontiac GTO and the iconic Corvette to the latest luxury Cadillac SUV's that grace streets around the world - Detroit is at the forefront of US motoring excellence. Every year a battle for America’s motoring hearts and minds is waged at the premiere global motor show – the Detroit Motor Show, and Americans flock to the great state of Michigan to see what’s on offer for the coming year. Billions of dollars change hands. Detroit contributed to spawning the civil right movement with the Motown music brand. Motown artists are some of the most famous and iconic musicians and ensembles in the history of popular culture – Motown gave us such shining lights as The Supremes, Michael Jackson, Lionel Richie, Marvin Gaye and Stevie Wonder to name but a few. Detroit is also a city that is in the process of building the foundations for recovery, a process that can provide an opportunity for investors to maximise returns through some savvy property investment strategy. Property can be purchased in Detroit at fire sale prices, though there are some who don’t believe that this is a situation that will linger in

the long term. Detroit may be on the edge of a renaissance. The Atlantic has called Detroit a “Magnet for young, creative people.” Thousands of young, mostly white educated people are moving in. The first chain grocery store in the city since 2007 just opened - a Whole Foods, subsidised by the city, state, and federal governments. Gritty down at heel nightspots that were eyesores, as well as attracting patrons that could charitably be called menacing now look like hipster coffee houses. There is some talk of what in a business context would be called ‘rightsizing’ and as with corporate change management there is always going to be some pain associated with the process. In the case of Detroit it is anticipated that entire neighborhoods might be consolidated and decaying parts of the city abandoned as Detroit makes the best uses of the resources that it does have in order to ensure a sustainable quality of life for its citizens. Today federal, state and local authorities are faced with a situation where Detroit, a once thriving city could very well be America’s largest casualty of the global changes in manufacturing dynamics. The phrase ‘too big to fail’ was penned as the United States government began bailing out distressed financial institutions and

it could equally be applied to the Detroit of 2014. This realisation has birthed a number of projects, including fiscal assistance to local authorities and a commitment to reinvigorating the city. There is a company based in Singapore that believes Detroit offers unrivalled opportunity for investors to partake in a bite-sized portion of the American Dream. Working in tandem with the US federal government’s multibillion-dollar initiative to rebuild Detroit MIDAS Development Corporation, based in Singapore has provided affordable rental homes for 300 families in Detroit, Michigan, USA. These tenanted homes are owned by investors and fully managed by MIDAS. The company currently has a portfolio of more than 500 homes in the renovation phase. The company has plans to acquire and manage up to 2,000 more distressed single-family homes by 2014. By purchasing and renovating the right houses in the right locations on a large scale, MIDAS offers the advantage of lower bulk pricing and a wide range of inventory selections for investors to choose from. Midas also takes care of the costs and the hassles of renovating and renting out the properties. To en-

FEATURE

FEBRUARY • MARCH 2014

Before & after

Renovations to the homes are not simply superficial. These properties require extensive repair work and a careful selection of tenants in order to ensure a good return on investment.

the ink on the dazzling brochures or the hot air of highly pressurised property ‘seminars’ that potential investors see daily on the island. “Investors need to be wary of these sorts of returns, which are presented as net money in the bank. In most cases this is simply not the case – management and legal fees and other hidden costs can eat a serious hole in the return on investment. When we talk to our clients about guaranteed returns of between 12 and 15% we have the track record to back up those claims.” Angie Fong also has further advice for those wishing to enter into the United States market.

The Information contained in this article was supplied by Midas Development Corporation - A subsidiary of Mustard Seed Group Pte Ltd headquartered in Singapore. The company has an established presence across Hong Kong, China, Malaysia, Indonesia and USA, visit www.midasdev.com

“There are questions that every investor should be asking prior to choosing a partner to manage a U.S. property investment in order to ensure that their investment is secure and the returns are acceptable.” The sorts of questions that any investor should be asking include: After-Sales Services

Does the company offer full property management services?

Property Insurance

Insurance is a MUST for all properties – will your investment be adequately covered.

Property Maintenance

Are the properties maintained to an acceptable standard to ensure rental returns?

Property Taxes

Make sure that you are in possession of all the relevant tax information.

Rental Collection

Is rental collection handled on your behalf?

Free Tenant Replacement

Will your service provider ensure minimal tenancy lapses?

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sure sustainability of the investment model and manage risk exposure, MIDAS sets high standards in selecting tenants who are responsible and financially worthy. The idea of investing in managed overseas property is by no means unique to MIDAS. However, according to Angie Fong, Managing Director of MIDAS there are some important differences in the way the company does business, when compared to other companies touting investments in the U.S.. “MIDAS has an established network of associates in the United States, primarily in the Detroit area. Our investors are protected by our long-standing partnerships with professionals who have accumulative experience of more than 38 years in real estate development, with a focus on the United States. What we are focused on is properties that are available at up to 50% below peak prices in areas where there stable tenants. With most of our tenants in the U.S. government Section 8 program, the government pays rent directly to Midas and we make sure that it is credited to client accounts every month. In our mind that’s the key to successful investment – minimising risk and maximizing returns,” says Fong. According to Angie Fong, Singaporean investors who have been promised guaranteed returns in the region of 20% for armchair investments in United States property have often found out that these promises are not worth

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FEATURE

FEBRUARY • MARCH 2014

SINGAPORECOMMERCIAL AND

RETAILFOCUS

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102

sia commercial real estate investment led global investment volumes last year, according to Jones Lang LaSalle. Global investment volumes reached USD $549 billion in 2013, increasing 18 percent from the previous year. Investment volumes during the fourth quarter alone totaled USD $183 billion, increasing 31 percent from the previous quarter, due to improving global economic conditions and enhanced liquidity, the firm said. The fourth quarter figure was 13 percent higher than the same period the prior year. The improvement in global property markets is a result of higher optimistic economic forecasts and investor confidence, JLL said. “Real estate is certainly benefiting from the desire of investors to hold hard income producing assets, alongside and in some instances in preference to more liquid investment opportunities,” Arthur de Haast, lead director, International Capital Group at JLL said in the report. “The desire of experienced investors to look at opportunities which require additional asset management or more creative solutions has helped push 2013 volumes past our initial expectations.” The Asia Pacific region led global investment volumes with 26 percent, with volumes back to record peak levels in 2007 at $124 billion. The region’s investment growth was spearheaded by the Japanese market, which saw a 63 percent increase in terms of dollars. Investment levels reached record levels for China, up 66 percent, and Australia, increasing 30 percent in 2013. “While overall global capital flows remain well below their peak levels with little growth over the last few years, real estate continues to see an increase in capital flows between countries and regions,” David GreenMorgan, Global Capital Markets Research Director at JLL, said. “Investors are looking

outside their home markets in increasing numPacific markets are expected to maintain their bers for opportunities and this trend is unmomentum into 2014, given the improving likely to reverse in the short to medium term.” global economic recovery and solid demand In 2014, JLL forecasts a 14 percent increase from domestic investors, supporting an overall in global commercial property investment forecast of 10 percent growth in volumes in the volumes, breaking the $600 billion mark region.” at $625 billion. The largest growth is expected in the Americas, at 20 percent, due Prime Office Rents finish to increasing economic growth, less poQ4 2013 on a high litical distractions, and improving liquidity. The second half of 2013 saw the bottoming out “An exceptionally strong Q1 2014 is expected of the Singapore office property market with in Europe which will support a 10 percent yearprime Grade A+ and Grade A offices having on-year growth in 2014,” the report states. “Asia performed well in 4Q 2013 with quarter-on-

SINGAPORE SALES AND INVESTMENT BRIEFING QUARTER

$ MILLION PRIVATE SECTOR

PUBLIC SECTOR

TOTAL

Q1 / 2009

139

149

Q2 / 2009

1,204

1,219

Q3 / 2009

2,246

694

2,940

Q4 / 2009

2,216

1,072

3,288

Q1 / 2010

4,261

1,005

5,265

Q2 / 2010

2,962

2,755

5,717

Q3 / 2010

6,378

2,433

8,811

Q4 / 2010

8,171

3,988

12,159

Q1 / 2011

5,396

3,363

8,758

Q2 / 2011

3,992

4,672

8,664

Q3 / 2011

2,542

2,263

4,805

Q4 / 2011

4,935

2,955

7,890

Q1 / 2012

2,776

2,181

4,957

Q2 / 2012

4,423

3,100

7,523

Q3 / 2012

7,201

2,161

9,362

Q4 / 2012

4,894

3,428

8,278

Q1 / 2013

2,925

2,689

5,614

Q2 / 2013

4,206

2,200

6,407

Q3 / 2013

9,729

4,006

13,736

SOURCE SAVILLS RESEARCH AND CONSULTANCY

FEATURE

FEBRUARY • MARCH 2014

quarter increases of 2.3 per cent and 0.6 per cent respectively, according to Knight Frank. Higher leasing activity was seen from the Financial Sector in 4Q 2013. With rental growth likely to continue throughout 2014, prime office rents are anticipated to rise by 4 to 5 per cent year-onyear in 4Q 2014. Prior to 2Q 2013, Singapore office rents had been descending at an average pace of 0.3 per cent QoQ for five consecutive quarters. Sentiment however improved in 2Q 2013 as the quarter marked a turning point for the fourth down-cycle of the office property market (since 1993) with the first QoQ increase of 0.2 per cent. Office spaces in the traditional Central Business District (CBD) fared well with average rents in Raffles Place and Shenton Way / Robinson Road / Tanjong Pagar clusters increasing by 1.2 per cent and 0.2 per cent QoQ respectively. 4Q 2013 also registered the first positive year-on-year (y-o-y) increase since 1Q 2012.

Office rents for Grade A+ buildings and Grade B buildings rose by 2.3 per cent and 1.8 per cent compared to a year ago. Office spaces in Suntec / Marina / City Hall performed better with a year on year growth of 9.2 per cent. During 2014 an expected uptick in business sentiment coupled with tenants trying to lock-in leases at more competitive rates, leasing activity and office rents are expected to increase. Landlords are setting higher rents in CBD Limited new office supply and increased office space demand has emboldened landlords to set higher rents, especially in the CBD. Based on Knight Frank’s basket of office properties, effective monthly gross rents of Grade A+ office buildings in Raffles Place/Marina Bay cluster increased 3.2 per cent QoQ to $11.28 per sq ft in 4Q 2013. The rise in Grade A+ office rents is partly attributed to the inclusion of Asia Square Tower 2, which received Temporary Occupation Permit (TOP) in Sep-

Gross Effective Office Rents ($per sq ft)

AVERAGE MONTHLY RENTALS BY CLUSTERS IN CENTRAL AREA $12.00

$11.00

$10.00

$9.00

$8.00

$7.00 4Q 2012

1Q 2013

2Q 2013

3Q 2013

Raffles Palce / Marina Bay A+

Raffles Palce Grade A

Orchard Road Grade A

Suntec / Marina / City Hall

SOURCE KNIGHT FRANK RESEARCH

4Q 2013

Shenton Way / Robinson Road / Tanjong Grade A

SHIFTS AND EXPANSIONS OF SELECTED COMPANIES TYPE

NATURE OF BUSINESS

NEW OFFICE LOCATION

SPACE TAKE-UP

Finance / Banking

Asia Square Tower 1

110,000

Scor

Reinsure

Asia Square Tower 2

20,000

Nikko Asset Management

(Equity / Hedge Funds)

Finance

Asia Square Tower 2

20,000

Robo Bank

Banking

South Beach

26,000

Booking.com

Travel

MBFC Tower 3

45,000

ORGANISATION

Mizuho Bank

(Singapore Branch)

Relocation & Expansion

SOURCE KNIGHT FRANK RESEARCH

(sq ft)

Singapore Surge in Commercial Investment Investment sales in Singapore commercial property climbed by 159.4% QoQ to S$4.9 billion in Q3 2013 contributing 35.8% of Q3’s total investment sales, according to the latest available Savills sales and investment brief. The results were primarily driven by some high-ticket transactions. In July SPH REIT injected Paragon and Clementi Mall into its IPO portfolio with a total purchase consideration of S$3.07 billion. This was followed by the OUE Hospitality Trust which acquired Mandarin

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(New to Market, Relocation or Expansion)

tember 2013. Monthly rents of Grade A office buildings increased 0.6 per cent over the same period to achieve $9.96 per sq ft. With the addition of Asia Square Tower 2 in office stock, some ‘flight-to-quality’ has been observed as tenants expanded towards the Grade A+ office buildings. Mizuho Bank took up a significant 110,000 sq ft of office space from its current location in Capital Tower. The Japanese bank is expected to move by end of 2014, joining other banking counterparts such as Bank of Mandiri and National Australian Bank in Asia Square Tower 2. The success of sub-regional centre development in Buona Vista since the beginning of 2013 has triggered market interest in suburban office spaces. This could entrench a positive spillover effect on Jurong Gateway, slated to be the largest commercial hub in Singapore’s suburban area. After 5 consecutive QoQ declines in office rents (based on URA Office Space Rental Index for Central Region), the office market ended its trough and is expected to be on an up-cycle going forth. Office tenants are now more willing to look at office expansion opportunities in view of greater certainty in the macro-business environment and rising office rents. As at 4Q 2013, there is about 10.3 million sq ft Gross Floor Area (GFA) of office space coming onto the market from major upcoming office developments. In view of limited new office space and improving market sentiment, office rents in core CBD, i.e. Raffles Place and Marina Bay clusters, is likely to increase by 4 to 5 per cent year on year by 4Q 2014. Looking further ahead, overall prime grade office rents could increase by an average of 10 to 15 per cent from end 2013 to end 2016, assuming a steady growth path for global and local economies and barring any unforeseen circumstances.

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FEATURE

FEBRUARY • MARCH 2014

Gallery for S$525 million. In August, the 99 year leasehold commercial site at the junction of Cecil Street and Telok Ayer Street attracted four bidders, with Frasers Centrepoint winning the bidding showdown with a S$924.0 million or S$1,112 per sq ft per plot ratio. If these transactions are removed from the equation the results are rather more sobering. Without this activity buying activity for either whole buildings or strata- titled units actually slowed significantly in Q3, However, prices did remain resilient.

Retail Sales Track Eurozone and Global Recovery Singapore’s fair economic performance in Q3 of 2013 boded well for the retail industry and the recovery (albeit halting) of the Eurozone and the United States economies, as well as a strong 5.1% year-on-year GDP growth may be reflected in increased retail activity over the festive season – we await the figures with baited breath. Tourism travel numbers during Q3 (final figures were not available at time of going to press) are likely to exceed Q2 2013 levels.

GROSS EFFECTIVE MONTHLY RENTALS IN 4Q 2013 EFFECTIVE MONTHLY GROSS RENTALS (per sq ft)

YEAR-ON -YEAR CHANGE

Raffles Place / Marina Bay

$10.00 Ð $12.55

2.3%

3.2%

Raffles Place

$9.30 Ð $10.60

0.0%

0.6%

Shenton Way / Robinson

$7.80 Ð $8.30

3.9%

-1.0%*

Orchard (Average)

$7.00 Ð $10.50

2.7%

-3.1%*

City Hall / Marina Centre / Suntec

$9.30 Ð $11.30

9.2%

8.9%

Beach Road

$6.90 Ð $7.40

-2.6%

0.4%

$6.10 Ð $8.20 $4.60 Ð $5.20

-1.6%

0.0% 0.0%

LOCATION

QUARTER-ON -QUARTER CHANGE

CBD (Grade A+, Grade A)

Road / Tanjong Pagar Central Area (Outside CBD)

Others Fringe Area Suburban Areas SOURCE: Knight frank research

*Q-o-q drop is due to inclusion of additional office buildings to Knight Frank basket.

MAJOR PROJECTS IN THE PIPELINE, 2013-2017

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DEVELOPMENT

104

LOCATION

ESTIMATED NLA (sq. ft)

ESTIMATED COMPLETION

Orchardgateway / Orchardgateway @ Emerald

Orchard Road

172,000

2013

Westgate

Boon Lay Way

416,000

2013

Bedok Mall

New Upper Changi Road

220,000

2013

268 Orchard Road

Orchard Road

96,000

2014

6 Shenton Way

Shenton Way

150,000

2014

The Seletar Mall

Sengkang West Avenue / Fernvale Road

188,000

2014

Big Box

Jurong East Street 11

230,000*

2014

Capitol Piazza

North Bridge Street / Stamford Road

160,000

2014

Retail at Sports Hub

Nicoll Highway

309,000*

2014

National Art Gallery

St. Andrew's Road

40,000

2014

Hillion Mall

Jelebu Road

168,000*

2015

South Beach

Beach Road

85,000

2015

Waterway Point

Punggol Central

370,00

2015

One KM

Tanjong Katong Road

210,000

2015

Marina One

Marina Way / Straits View

119,000

2017

SOURCE COMPANY ANNOUNCEMENTS, URBAN REDEVELOPMENT AUTHORITY, SAVILLS RESEARCH & CONSULTANCY

*Savills estimation based on an efficiency rate of between 65% and 70%

September’s Formula 1 event caused a spike of 12.6% in advance flight bookings and a surge in last minute bookings. The result is that tourism figures for 2013 could break the record of 3,3881,407 set in Q1 2013. Orchard Road retains its iconic status as arguably the most desirable location for new brands to make their mark on the Asian market. Brands including Ugg and Religion launched their foray into the Asian markets with stores on Orchard’s golden mile. Ugg has opened a standalone store in ION Orchard with Religion opening in Isetan, Wisma Atria. Other luxury brands including Swiss watchmaker Parmigiani Fleurier and Mikimoto have taken up residence at The Shoppes in Marina Bay Sands. Suntec City Mall officially reopened Towers One, Two and Five in September 2013 after the first phase of the recent renovation was completed, just in the nick of time to take advantage of the influx of tourists for the Formula 1. The committed occupancy rate was 99.6% for the first phase while Phase Two achieved a pre-committed occupancy of 83.7%. Phases Two and Three are expected to be completed by Q1/2014 and Q4/2014 respectively. Two CapitaMalls projects are on track to open in Q4/2013. Westgate and Bedok Mall are about 85% and nearly 100% leased respectively. The seven-level Westgate, with an NLA of 410,000 sq ft, is targeted at middle to uppermiddle income families. There will be a wide selection of well-known restaurants and eateries such as Tim Ho Wan, Brotzeit, Paradise Dynasty, Café Crema, Menya Musashi and Food Republic. Coach will also make its debut in the suburban retail scene through Westgate. Prime Orchard Road rents slipped by 1.5% QoQ from S$35.1 to S$34.6 per sq ft per month in Q3/2013. Savills Singapore believes that the decline was due to the new foreign labour restrictions which stalled expansion plans for most retailers. In addition to the slight decline in rental rates, the vacancy rate in the Orchard area also adjusted slightly up from 7.3% to 7.7% this quarter. The figures are, however, less likely to rise further as retail sales are expected to continue growing in line with the economy. It should be interesting to track the trends around commercial property in Singapore during the first quarter of 2014 to see if the current unease surrounding residential property will be reflected in retial and comercial pricing. The Year of the Horse is going to be interesting.

â&#x20AC;˘ Pointers on the potential for buying investment property overseas, including letting potential and visa or residency offers

FEATURE

FEBRUARY • MARCH 2014

THE WORLD’S BEST

Retirement Havens ②

③

⑤

By Jonalyn Fulo Fortuno

WWW.PROPERTYLIFENEWS.COM

T 106

he years of retirement should be something that will be savored. Free from stress and the demands of a structured work life the retiree is theoretically able to explore more creative and relaxing pursuits. The truth of the matter is that the age of retirement has been steadily climbing upwards. Increased costs of living and the declining real value of retirement capital has meant that many people are now working for longer – sometimes in an effort just to make ends meet, rather than enjoying a well-earned rest. In fact the average non-retired American now plans to retire at 66, up from 60 in 1995, according to a recent Gallup survey – and this trend is reflected across the globe. “Because most of the uptick came before the 2008 recession, this shift may reflect more than just a changing economy,” Gallup’s associate editor Alyssa Brown wrote in her report on the study. “It may also indicate changing norms about the value of work, the composition of the workforce, the decrease in jobs with mandatory retirement ages, and other factors.” However, many retirees who made their livings in countries that today still boast strong currencies are beginning to realise that there are offshore destinations where they can stretch their retirement dollar (and that includes the

⑥ Singapore dollar) or Euro. Many countries offer foreign seniors membership in programs and other benefits as an incentive to invest their retirement capital. These are benefits that they might not enjoy in their home countries. For many retirees the lure of a higher quality of life, leisure opportunities, cheap property and abundant sunshine more than makes up for any real or perceived difficulty in adjusting to a foreign culture. After all, who wouldn’t warm to the idea of living somewhere exotic with great climate, friendly locales, an idyllic lifestyle and a low crime rate?

According to Bill Hunter, director of Personal Retirement Solutions at Merrill Lynch Bank of America, the majority of the retirees envision a “twofold advantage” in relocating abroad; one of which is the “romance of experiencing a different culture,” the other is the notion of getting “more bang for their buck” in the hope that the cost of living would be considerably cheaper than their home country. As retiring abroad becomes a new trend, more retirees are driven to set aside a fraction of their nest egg for property investment. But before those in search of greener pastures make the final decision weighing the pros and cons is essential. Factors such as quality of life, affordability,

FEATURE

FEBRUARY • MARCH 2014

As retiring abroad becomes a new trend, more retirees are driven to set aside a fraction of their nest egg for property investment

which is guaranteed to spice up retirement. And just like any retirement hotspot, Thailand also offers excellent health care and a low cost of living.

❻ COLUMBIA

Colombia is a realistic option for those who want to experience a European lifestyle without draining the pension pots. Whether you want to spend a relaxed afternoon in a sidewalk café or stroll around the art museum and gallery, Colombia has all the good stuff that makes a relax life. Add to that is the stunning landscapes and walled cities that could be of interest to retirees.

❼ MALAYSIA

⑦ health care services, property prices and taxes, conveniences, and retirement benefits on offer are only a few of the criteria that need to be evaluated prior to choosing a retirement destination. To give you a head start, Property Life created its own list of 10 best retirement havens by collating the findings from International Living, Market Watch, Money Retirement and other reports profiling the top destinations for those who want it all.

❶ PANAMA

❷ SPAIN

Having the largest expat community in all of Europe is enough of a proof that the recent financial woes have done little to damage the reputation of Spain. In fact, the downturn, which toppled housing prices by about 30% since 2008, seems to have only propelled foreigners and those who are nearing their golden years to settle in the sun-soaked country. After all, they

could now certainly afford to buy property, be it inland or coastal.

❸EQUADOR

❽ FRANCE

When it comes to medical services, Ecuador has most of the edge. Besides being inexpensive, the medical care here is rated as worldclass, which is why it is a favourite of those who consider relocating abroad. But that’s not all there is in this country - Ecuador also boasts a year-round balmy weather, excellent secenary and natural beauty and first world amenities.

If you have a few extra bucks to spare, wouldn’t you want to enjoy your retirement years in France? The country is one of the most beautiful in the world with cultural splendor and striking Old World charm. Experiencing the French lifestyle on a retirement budget is possible as long as you look to the countryside. With house prices still recovering from the financial crisis, great deals are still possible.

❹MEXICO

❾ COSTA RICA

The rich culture as reflected in its sumptuous cuisines is not the only thing that endears Mexico to retirees, particularly those who live in the US. In close proximity to the world’s largest economy it attracts those who want to walk on the wild side, but still be a stone’s throw from Western comforts. There are other attractions including colonial towns that offer a serene ambiance and laidback lifestyle, endless activities and fiestas that guarantee a year-long fun, and of course, affordable real estate.

❺THAILAND The “Land of Smiles” is just about perfect for those people who want to make the most of their golden years. One of the great things about Thailand is that integration is not a problem, as the locals are known for being friendly and polite. Another thing is that Thais are big on sanuk (the local term for a good time),

Dubbed the ultimate tropical paradise by International Living in 2010, natural splendour and a laid back lifestyle awaits those who opt to live in Costa Rica. But the long stretch of beaches, majestic scenery and great climate are not the only factors that entice retirees to settle in this country; widely lauded public safety levels, an efficient social security system and a strong democracy all add to the allure.

❿ NEW ZEALAND

One of the best things about reaching retirement is that you can indulge yourself your thirst for exploration and get under the skin of your chosen retirement destination. New Zealand offers the opportunity to take part in an active outdoor lifestyle. And should you decide to retire in New Zealand, the adventures are endless, with a wide range of ski slopes, surfing hubs, and hiking hotspots.

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With its low crime rate, cheap cost of living, foreigner-friendly visa programme, economic stability and excellent quality of life, Panama is a retirement paradise. But the best part about living in this part of the country is that pensionados (retirees) are entitled to discounts on almost anything, which means that your retirement budget goes a long way. No wonder, it’s been hailed by International Living as the world’s best retirement hotspot in its 2014 Global Retirement Index.

⑧

Great cuisine, powdery white sand beaches, tropical islands, a welcoming culture and world-class infrastructure, are among the attractions that make Malaysia one of the top retirement havens in the world. With Malaysia’s generous retirement visa scheme, all these are within easy reach.

107

FEBRUARY • MARCH 2014

AFTERWORDS FROM THE PUBLISHER.

omewhat startling news came out of Singapore’s own PropertyGuru (Property Life is an official media partner) this January as we were preparing the magazine for print - according to a PropertyGuru report Singapore private property prices are

expected to drop between 6-8% in 2014. The outlook is even worse for HDB (Housing Development Board) owners – with an expected 8-11 percent slide in HDB resale prices. The cooling measures implemented by the Singapore Government are having their desired effect – the heat is coming out of the market. This is actually a good thing for Singaporeans – it means that housing becomes more affordable. But on the flip side, for investors negative capital growth is not exactly what they had in mind when they were spending upwards of S$1,500 a square foot for condos in district 10. There is also the issue of a tax on foreign investors in Malaysia – a 2% levy has been raised on investors buying Malaysian property – with a not entirely certain view on how resale and retail prices will trend, especially since there have been a spate of mega constructions across that country. The situation in Iskandar is also fast evolving - we cover that region regularly in Property Life - including this issue. Thailand’s current problems mean that 2014 will give investors eyeing that country pause – an elderly monarch and people being injured in politically motivated unrest do not instill faith in this beautiful country’s

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property market. There is a silver lining for property investors in Singapore though – property markets in Europe and the US are on the up and are well worth looking at - property investment in Europe by pan Asian investors is on a massive upswing. Property markets in countries like Spain and Portugal are rebounding and are becoming the focus of investors around the globe - in our next issue we will discuss the ‘buy a property, get a visa’ proposition. For

108

S$800,000 you can get a jumbo HDB in or a villa with a pool in PortuALEXANDER KNIGHT Managing Director and Publisher Panashco Media Singapore

gal… or large townhouse in Melbourne! I would like to wish all our readers a very prosperous Lunar New Year. Saddle up for a wild ride and Gong Xi Fa Cai.

Invest from

£17,000

Rental Return up to

10% for 15 years

The Corran Resort & Spa is defined by simple principles. Visitors and guests can enjoy fine food, wine and hospitality in a luxurious and relaxing atmosphere with inviting personal touches. The resort has been such a success with both guests and investors that 21 new suites were added and fully sold out in January 2013, over £850,000 has been paid to investors to date. The developer is now launching a second phase where investors can take part in hotel room ownership which offers immediate returns. These 28 new suites will be created from a fully renovated set of buildings away from the main house. The opportunity is to invest in the new phase of this fully operational resort where suites will match the high calibre of decoration and character set by the first phase of this very successful hotel.

www.AbacusInvestorAsia.com

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Opportunity to invest in a fully operational UK hotel

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Returns start immediatly paying up to 10% for 15 years in addition to a 150% assured buyback in year 15.

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Units priced at £17,000 & £33,000 Assured Resale - 100% in years 4 - 14 Assured Resale - 150% in year 15 Over £850,000 paid to investors already Deeded property ownership

DESIGNED TO SURPASS EVEN ITS ADDRESS Sculpted by the Italian masters behind the world’s most iconic supercars, Ferra is the epitome of taste and craftsmanship. A stunning 22-storey bespoke masterpiece, it is a sight at every turn - set to transform the skyline as it captures both the heart and the imagination. INESSENCE The Inessence series of bespoke residences follows one simple principle - luxury is a distinctive and individual experience. Your Inessence home is an expression of yourself. An exquisitely tailored environment that surpasses your most demanding expectations. An imaginative, intuitive and daring attempt to realise a residence that until now, merely existed in the imagination. Every Inessence residence is built on four uncompromising pillars: a prime location in Singapore’s most desirable districts, a unique design by an architectural visionary, thoughtfulness in space and service, and unprecedented levels of personalisation and bespoke customisation. DESIGN Among the outstanding, Ferra stands out. Derived from Pininfarina’s car design DNA, powerful, flowing lines, graceful contours and the unmistakeable interplay of bold colour coalesce to form a masterpiece of two halves—one, red and passionate, the other, dark and cool. “We are very proud to have identified a specific expressive language and a strong aesthetic personality for Ferra’s defining façade while, at the same time, being able to insert it harmoniously into the architectural contest that’s Singapore.” – Paolo Pininfarina, Chairman of the Group Contact details: sales@premiererealtyglobal.com | +65 96911404

Developed by:

Marketing Agency: Premiere Realty Pte Ltd License number (L3009712B) Florence Ang (CEA Reg : R047996B)

BESPOKE RESIDENCES BY FAR EAST ORGANIZATION

DEVELOPER: ORCHARD LANDMARK PTE. LTD. AND FAR EAST LIGHTHOUSE PTE. LTD. (197900987N AND 201104651N) DEVELOPER’S LICENSE NO: C1030. LOT & MK NO: TS 21 LOT 152V AT LEONIE HILL TENURE: LEASEHOLD 103 YEARS FROM 08 JANUARY 2013 EXPECTED DATE OF VACANT POSSESSION: 31 DECEMBER 2018 EXPECTED LEGAL COMPLETION: 31 DECEMBER 2021 BP NO: A1286-00004-2007-BP01 DATED 12 APRIL 2013