Property Life Issue 13 by Panashco Media Pte Ltd

ASIA’S NO. 1 PROPERTY & LIFESTYLE GUIDE • ISSUE 13

THE ORIENT

EXPRESS We follow the route of Europe’s most iconic railway line on a journey to find out where the smart Asian money is going. ISSN 2251-3949

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In Search of the Sun Value on the islands.

Rising Stars

New developments and new opportunities.

Fore!

On tour in Vietnam

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THE TEAM MANAGING EDITOR

STEVEN MALLACH steve@panashcomedia.com MANAGING DIRECTOR

TREVOR WATLING trevor@panashcomedia.com DIRECTOR, KEY ACCOUNTS

MIRIAM RAHAMAN miriam@panashcomedia.com BUSINESS DEVELOPMENT MANAGER, SINGAPORE

ELAINE TAN elaine@panashcomedia.com ART DIRECTOR, EUROPE

ANTONIO VILARES antonio@panashcomedia.com ART DIRECTOR, ASIA

PAULINE DYCOCO production@panashcomedia.com SENIOR EDITOR

VITTORIO HERNANDEZ editorial@panashcomedia.com BUSINESS DEVELOPMENT MANAGER, PHILIPPINES

BRYAN DEXTER RAMONES bryan@panashcomedia.com UK SALES

MARK MARTIN mark@panashcomedia.com OFFICE MANAGER

NORIANTY ASMAT norianty@panashcomedia.com CONTRIBUTORS

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MANAGING EDITOR’S NOTE As the third quarter of 2014 draws to a close, Asia has seen some interesting developments across the property sector. Cooling measures in Singapore have certainly had an impact on the domestic housing market and many first-time buyers have been forced to compromise on floor space and seek finance from private lenders rather than commit to an HDB unit. New restrictions on leasing of HDB units by Singapore Permanent residents and restrictions on ownership are also having an effect on the rental market. The ripple effects of the cooling measures are widespread and the next three months will be extremely interesting. On the flip side of the coin, Singapore posted the strongest quarterly gains in office rentals in Asia during the second quarter of 2014, according to latest data from JLL. In local currency terms, Singapore continued to see the strongest quarterly rental growth of 4.6% compared to the preceding quarter. The average rental for a Grade A office space was USD $828 per square metre (psm) per year, making the city-state the third most expensive after Hong Kong Central at USD $1,493 psm per year and Beijing’s Central Business District at USD $996 psm per year. The marketing of European property to Southeast Asian buyers, including Singaporeans, continues to be robust, so much so that authorities are taking a hard look at some of the sales practices that are being employed by overseas developers and their marketing agents. However, there does seem to be a real appetite amongst Southeast Asian buyers for overseas property – both as lifestyle purchases and as investments. In this issue of Property Life we are going to take a nostalgic trip along the route covered by the Orient Express, one of the most famous train services ever to have operated across Europe. Coincidentally, many of the countries along the route are also on the radar of buyers seeking access to the European market. We will also be taking a look at some of the island destinations in Southeast Asia and further afield that are attracting interest from investors – including Lombok, which is evolving into a very interesting investment opportunity. We hope that you enjoy this issue, and as usual we welcome any suggestions you have about the content you would like to see in Property Life.

IMPORTANT NOTE Any content of Property Life may only be reproduced, in any shape or format, with the express 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, or any loss that might occur through errors or omissions. Currencies quoted are for information purposes only and may rounded off. Property prices and rental figures used for illustrative purposes may be averages. All investors are urged to seek the advice of a legal, property and investment professional prior to purchase. Printed at Times Printers, Singapore.

STEVE MALLACH

MICA: 165/04/2012 • ISSN 2251-3949 KDN PERMIT NO.: PPS 1819/09/2013 (025545)

MANAGING EDITOR PROPERTYLIFE

Contents ISSUE 13

16 The Orient Express is one of the most iconic train services in the history of rail. The service opened up new European destinations for the rich and curious across the continent and onwards towards its final destination in Constantinople - now Istanbul. Today, a new sort of Orient Express is reshaping Europe – thousands of Asian investors attracted by the continental lifestyle and the promise of low prices, residential visas and superior returns. In this issue we examine some of the countries along the route of the old Orient Express and why those countries are attracting so much investor interest.

F E AT U R E

18 ALL ABOARD – LONDON, UK

London is a favourite destination for property investors. In this section of our Orient Express feature we look at just why London remains so popular with investors from Southeast Asia and all over the globe.

24 26

ALL ABOARD FOR VALUE – MUNICH, GERMANY

VENICE STATION – VENICE, ITALY

ATHENS STATION – ATHENS, GREECE

ISTANBUL STATION – ISTANBUL, TURKEY

VITA STUDENT ACCOMMODATION Student Accommodation has become one of the hottest property investments in the United Kingdom. In this short article we take a look at why students prefer this type of accommodation and how they are driving investment in this market.

THE CITY OF LIGHTPARIS, FRANCE The original Orient Express started its journey across the European continent from Paris, the City of Lights. Paris remains a favourite amongst tourists and for many, one of the most attractive cities in Europe for property investment.

SWISS STATION – ZURICH, SWITZERLAND

The reputation of Zurich and Switzerland as a whole for efficiency and as one of the most pristine natural environments in Europe, not to mention its world class banking regulations make it a target for property investment by high net worth individuals.

A DAY TRIP – PORTUGUESE PROPERTY Although Portugal was never on the route of the Orient Express, its popularity as a holiday and property investment destination and its Golden Visa offering make it worthy of at least a day trip on our exploration of the Express route.

Once again the temptation to stray from the original route of the Orient Express is too great to ignore. It is a short journey from either Paris or London to Innsbruck, the capital of Tyrol, Austria, and from there, it is less than a two-hour drive to Munich, the capital and largest city of the German state of Bavaria. Some experts predict that 2014 will see property sales in excess of EUR €35 billion (USD $47 billion) in the country. What is it that makes investors bullish on the German market?

Venice is widely regarded as one of the most beautiful cities in the world – and for good reason. Its air of romance and cuisine are justifiably famous. We alight in Italy to discover more.

Images of sun drenched islands and ancient monuments spring immediately to mind when one thinks of Greece, However this is a country with an economy and property market that were badly ravaged by the effects of the global financial crisis. We ask whether it has started to recover and can the savvy property buyer still find value?

We reach the end of the Orient Express line in Istanbul. This is a city that is an intriguing mix of European and Middle Eastern influences, as well as being the capital city of a country that is attracting the interest of many investors in search of value and a touch of the exotic.

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74 ALSO IN THIS ISSUE

05 NEWS AND INTERNATIONAL NEWS

Property Life’s regular offering on what is happening in property markets across the world is back with News and International News.

13 50

LIFESTYLE – GOLF INVESTMENT

LIFESTYLE - PODIUM LOUNGE

KEMPINSKI ADDS AFRICAN FLAVOUR

RISING STARS

We take a look at some of the most exciting developments from around the world in another Property Life reader favourite – Rising Stars.

ISLAND INVESTMENTS

The sand, the sea and unspoiled nature are attracting tourists to some of the world’s most stunning island destinations. With increased tourism comes opportunity for property investment. In this mini feature Property Life takes a look at some of the most exciting island property investment destinations in the world – including Indonesia’s hot new entrant, Lombok.

Golf is not one of the attractions that many would associate with Vietnam, however that may well be changing. In August Panashco Media Managing Director, Trevor Watling visited The Da Lat at 1200 Country Club and Private Estate and came away with an appreciation for what this destination may offer investors.

It’s Singapore F1TM time again and this year visitors and residents are being offered a Podium Lounge experience that takes the F1TM experience and adds another dimension to an already exciting weekend of motorsport.

Hotel Group Kempinski has added a new destination to its growing African portfolio with the addition of the famous Hôtel Des Milles Collines in Rwanda’s capital Kigali. We take a tour.

Singapore’s Q2 2014 home prices down for 3rd straight quarter Preliminary data released by the Urban Redevelopment Authority of Singapore reported a 1.1% decline in private residential prices in the citystate to 209.3 points. It followed a 1.3% drop in Q1 2014. The 3-consecutive quarter decrease is the longest losing streak in Singapore in five years, caused by cooling measures put in place by the Singaporean government to rein in speculation. The measures include new taxes and higher down payments. Commenting on these developments, Donald Han, managing director of Chesterton Singapore, a real estate consulting firm in Singapore, said, “The price moderation last quarter was lower than expected, which probably means that the measures are here to stay for now … It’s a healthy correction though volumes have dropped by half since the loan measures last year.” PL

BY THE NUMBERS

8.1% The gambling capital of the US, Las Vegas in Nevada, registered one of the highest increases in real estate prices in the past 12 months with 26.7% price hike, according to data from the Greater Las Vegas Association of Realtors. The number is a major turnaround for the city that suffered one of the biggest collapses in home prices during the property market crash. Homes that sold for over USD $1 million doubled in 2013 to 342 compared to 2012. A property agent for RE/MAX Advantage said most of the price increase is because of the stronger economy, reduced inventory of existing homes and willingness of the sellers to cut their prices. While all 20 US cities in the S&P/Case-Shiller Index of property values logged year-over-year gains, the increase was at a slower pace compared to the previous year.

$1.85 USD

Chinese less willing to invest in homes The latest China Wealth Index in July logged 125, down from 127 in May and 130 in March. While it showed household confidence in the economy unchanged at 126 and willingness to invest down 2 points to 112, these component indices still showed readings above 100, the benchmark of optimism. But when it comes to buying homes, sentiment on property purchase declined to 96 from 99 in May. It is the first time in four years that the property purchase sentiment index went down below the 100 positive sentiment level, according to the Index compiled every two months by the Bank of Communications and Nielsen. Lian Ping, chief economist at the Bank of Communications, said that despite the eased restrictions on real estate, Chinese are still cautious. He added, “The market response so far indicates that people are still adopting a wait-and-see attitude, and we estimate the industry will remain lackluster in the second half.” As a result of the lack of confidence, housing prices remained weak for the third straight month in July as more than 75% of cities registered month-onmonth drops. At the same time, average price of new homes im 100 cities dipped 0.81% to CNY 10,835 yuan (USD $1,756) per square metre in July. The bleak outlook is expected to worsen as some developers are not inclined to sell their homes lower than their price tags a few months ago. PL

BILLION

HSBC is selling its global headquarters in Canary Wharf, London. If the sale of the 44-storey, 1.1-million square foot building goes through, the edifice is expected to sell for at least USD $1.85 billion (GBP £1.1 billion), which would be a record price for the British market. Estate agents JLL and GM Real Estate are marketing the HSBC building, reported the Financial Times. In 2007, at the height of the real estate boom in UK, the HSBC tower became the costliest building in the British capital when it was sold for GBP £1.09 billion to Spanish property firm Metrovacesa, but it repurchased the tower in late 2008 when Metrovacesa was hit by financial difficulties. It was built in 2002, designed by Foster + Partners.

Property Life News | Issue 13

REGIONALNEWS

Better transparency among Southeast Asian property markets The latest biennial Global Real Estate Transparency Index report released by Jones Lang LaSalle and LaSalle Investment Management showed significant improvement in property market transparency among Southeast Asian nation. Singapore ranked 13th globally in the transparency index, the highest ranking among Southeast Asian countries, while together with Malaysia, it was graded as transparent. Thailand, the Philippines and Indonesia remain in the semi-transparent list and Vietnam in the low–transparency list. But while all nations in the subregion registered some advances, it was less significant compared to 2012 when three nations in Southeast Asia were in the top 10 global improvers. Thailand’s score went up to 2.76 in 2014 from 2.94 in 2012 and 3.02 in 2010. As a result, it inched its way up the list to 36th place in 2014 from 39th in 2012 and 2010. Suphin Mechuchep, managing director of JLL in Thailand, noted that “Despite no change in grading, Thailand has seen continued improvement in its transparency score. The country’s improved score and higher ranking in 2014 are good news.” In the past, involved parties such as the owners, investors or occupants kept confidential major sales and leasing deals, resulting in actual transacted values being scarce. PL

3 Chinese cities report growth in bank repossession of homes Once a red-hot market, China’s real estate market is now showing more signs of weakness as three cities reported an increase in number of bank repossession. These are in the cities of Hangzhou, Ningde and Xinqi. Most of the repossessions involve properties by medium and small-sized developers that were suffering from capital problems as they grapple with unsold units. Their projects are often found in third and fourth-tier cities, not in major ones such as Shanghai and Beijing, said Shang Fulin, chairman of the China Banking Regulatory Commission. While wealthy Chinese now prefer to buy homes overseas, Joseph Meyer, publisher of the Straight Money Analysis newsletter, warned, “Chinese are going to see in due time that real estate prices, including luxury properties in New York, can lose value. This will be a lesson in Chinese real estate bear market. It’s coming.” Data from the National Association of Realtors said that total sales to foreign property buyers in the US reached USD $92.2 billion from April 2014 through March 2014, up from the previous year’s USD $68.2 million. PL

For more information visit www.propertylifeasia.com

BY THE NUMBERS

14.8%

Billionaire Lang Walker, one of Australia’s largest property developers, says home prices in Sydney and Melbourne have climbed too much, and he is turning his focus to investments in Malaysia instead. Home prices in Sydney jumped 14.8% in July from a year earlier, the fastest growth among all state and territory capitals, according to RP Data-Rismark. Melbourne prices rose 11%, the second-fastest increase, and prices in Brisbane increased 6.9%. Mr Walker, whose company is behind developments such as Sydney’s King Street Wharf and Main Drive Kew in Melbourne and has USD $12 billion of property projects in the pipeline, is looking to increase investments in southern Malaysia, where he has already put in about USD $2 billion into a project in the Johor region. Mr Walker said he is in talks for further investments in the city of Johor Bahru as he bets that demand from neighbouring Singapore will increase. Residents of Singapore, which is Southeast Asia’s richest city, are increasingly crossing over into Malaysia, as they seek property, labour and amenities, often at half the cost or less.

21.4% Last year, 2013, was a bad year for Asian real estate executives whose earnings shrank 21.4%, according ti the Asia Rewards & Attitudes Survey 2014 made by the Royal Institution of Chartered Surveyors and Macdonald & Company. While across all Asian property professionals, the average salary went down at a slower pace of 3.8%, those in Malaysia enjoyed an 11% growth. As a result, the average earnings of real estate professionals in Asia dipped to USD $96,086 (HKD $749,479).

20%

International developers now control nine of the largest 50 development sites with planning in Central London. The nine sites represent 28,000 new homes of 20% of the total planning pipeline in the area. Jones Lang LaSalle forecasts it would grow significantly over the next few years. According to Adam Challis, head of residential research at JLL, questions would be raised about the sustainability and depth of demand, the lack of supply would be the most important factor to ensure that the Central London development market would thrive over the next three to five years. He added that even if conditions would eventually ease, “it would remain important for developers to continue building and releasing product to fee this fundamental housing need.”

INVESTOR INFO EVENINGS Upcoming info evenings in

REGIONALNEWS

More Filipinos borrowing from banks to buy properties Almost 20% of the loan portfolios of Philippine banks are real estate loans. The Central Bank of the Philippines (BSP) placed the total real estate exposure of Philippine universal, commercial and thrift banks at PHP 1.006 trillion pesos (USD $23 billion) as of Q4 2013. It is 7.1% improvement from Q3 when the total real estate loans reached PHP 939.8 billion pesos (USD $21.5 billion). Land developers account for about 60% of the loans, while the remaining 40% were by residential property buyers. The BSP, in a statement, said, “Figures suggest a notable increase in the purchase or rent of residences near business districts by young professionals, of luxury homes by highincome expatriates, and of real estate properties for the use or investment by overseas Filipinos.” PL

Indian buyers increasingly active in US market The stereotypical image of an Asian investor continues to be someone of Chinese descent, but the latest research indicates that this may be incorrect. The latest report from the National Association of Realtors (NAR) in the U.S. said that a growing number of overseas property investors come from India. The NAR report said the in FY 2014, Indians spent USD $5.8 billion buying real estate in the US. Of course, the Chinese still dominate with purchases for the same period totaling USD $22 billion. After the Chinese come the Canadians (USD $13.8 billion), Indians, Britons (USD $5.8 billion) and Mexicans (USD $4.5 billion). The report said that most Indian buyers prefer to buy homes in urban areas and states such as California, New York and North Carolina where IT companies abound. Most of their purchases were single family detached homes, but 6 per cent bought commercial or rental properties. PL

For more information visit www.propertylifeasia.com

U.S. based brokerage see growth in Asia TOKYO - A New York-based real-estate brokerage said it expected growth in Asia, despite challenges such as instability in China’s property market and the rise of e-commerce. Carlo Barel di Sant’Albano, international chief executive of Cushman & Wakefield Inc., said in an interview that he wanted to double Asia-Pacific revenue in the next three to five years. In 2013, the firm generated $192 million revenue in the region, roughly 8% of the global total. He said the company was looking for opportunities to acquire smaller real-estate firms to take advantage of the region’s expected economic expansion. Asia’s biggest economies, with the exception of Japan, are forecast to grow faster than the U.S., the U.K. or the euro zone in the coming years, according to projections by the International Monetary Fund. Among its activities in recent months, Cushman & Wakefield helped the State Oil Fund of Azerbaijan acquire a prime office complex in Seoul for $447 million. Last year, the firm helped Mitsubishi Estate Co. sell the property that houses the London Stock Exchange to Oxford Properties for GBP235 million. With two local partners, Cushman & Wakefield’s asset management unit in Japan runs a real-estate investment trust called Nippon REIT Investment Corp. It was listed on the Tokyo Stock Exchange in April. The REIT has invested in office buildings in Tokyo and residential properties in major Japanese cities. Also, Cushman & Wakefield last year acquired a Singapore-based firm that offers interior design, project management and construction services. Some investors see vulnerabilities in Asian property markets, particularly in China. Beijing has sought to curb overheating of property markets, although recently some cities have been relaxing property curbs to address a housingmarket slump. Chinese consumers accustomed to steady rises in the value of their property might pull back on spending because a high percentage of household wealth is tied to real estate in China. PL

Listed US homes in Zillow Greystar buys 3 student inventory down 0.4% housing complexes in central London Homes for sale in Zillow’s inventory have been going down in number since the start of 2014. By the end of April, the decline was by 0.4% annually. Inventory decreased in 35 of the largest metro areas in the US covered by Zillow, up from 21 in 2013. The largest decline was in Houston by 26.6%, followed by San Antonio at 23.7% and Boston at 23.4%. The scarcity of homes for sale was especially felt in the lowerend market where first-time homebuyers seek houses. Commenting on this development, Dr. Stan Humphries, chief economist of Zillow, said, “First time home buyers are ready to buy, but unfortunately, aren’t able to take advantage of the spring shopping season and low mortgage rates because of the lack of homes for-sale in their price range.” He attributed the shortage to the high negative equity, especially in the low-end market. PL

Balearic Islands continue to attract foreign buyers Data from the Land Registry in Spain showed that the Balearic Islands continued to attract buyers in 2013 as this region had the highest number of property sales to foreigners. Nationalities that purchased properties in the island are mainly Britons, Russians, Swiss and Scandinavians. Citizens of the European Union member-nations made up 83.4% of the Balearics buyers. Among the areas identified as attractive to foreign buyers are Port Andratx in the southwest, Deia and Port Soller in the west, Pollenca in the north and Arta and Capdepera in the east. Daniel Chavarria Waschke, managing director of Balearics Sotheby’s International Realty, said the new golden visa which grants residency to nonEU buyers if they buy EUR €500,000 (USD $681,000) worth of property helped boost property sales in the islands. PL

Real estate companies in the UK continue to be bullish about the country’s rental market. One such firm, Charlestonbased Greystar Real Estate Partners, secured USD $206 million financing from MetLife to purchase three student housing complexes in central London. The complexes have a total of 1,135 beds broken down as follows: 230 in Southwark, 573 in Woodland Court, Islington, and 332 in Wedgwood Court, North London. Greystar founder and CEO Bob Faith said that the transaction aligns perfectly with the real estate firm’s strategy to buy welllocated and high-quality assets that would provide a superior living experience for residents of central London. Outside the UK, the company is the biggest operator of apartment communities in the US where it has more than 215,000 units spread in 100 markets undermanagement. PL

Lamudi Android apps now in 28 markets There are over 400,000 property listings from Africa, Asia, the Middle East and Latin America in the newly launched Android app for house hunters. The roll out by real estate portal Lamudi aims to provide a mobile platform for the purchase, lease and sale of real estate on the go. The Android version follows the launch of the Lamudi iOS app in Pakistan, Mexico, Colombia and Morocco. More countries in the Lamudi network would soon be added to the iOS app list. The two apps offer customised search functions which allow users to filter easily results by country. It also feature a match alert function that notifies users of a property that fits their needs once it is listed. PL

Property Life News | Issue 13

INTERNATIONALNEWS

London prime central property still booming says LCP Land Registry statistics for Q2 2014, analysed by London Central Portfolio, have shown that global appetite continues to increase. Sales volumes reached 6,546 over the year, an increase of 19.34% over last year, the highest level since 2007. Property prices also continue to rise but with no sign of a so called ‘bubble’. The annual growth has been 10.09%. This compares with the long term average since January 1996 of 10.5% p.a., which includes the downturn during the credit crunch. This brings the average price to £1,638,456. Greater London saw stronger growth than PCL in Q2, at 12.09% vs. the previous annual quarter, however the annual growth is less, at 8.53% vs. the preceding year. The average price now stands at well over half a million pounds, at £533,489. Q2 2014 also shows a positive picture for

the national housing market but not the extreme picture frequently painted by market commentators. Price growth in England and Wales in Q2 was 5.97% vs. the same quarter last year and annual growth was 4.46%. This

only represents actual price growth of 15.1% since 2007. Transactions however, have increased a monumental 30.93%, almost one third over the year, resulting in the 848,767 transactions, the highest level since 2007. PL

Santa Fe realtor uses drone to advertise homes for sale

Over 500 pubs close in England annually over past 3 decades

A Santa Fe real estate agent is using a new technology to boost his business. Agent Brian Tercero is using a drone to help advertise homes he is selling, reported the Santa Fe New Mexican. Tercero said the drone is a powerful advertising tool and was instrumental in catching the interest of potential buyers. While the US Federal Aviation Administration (FAA) prohibits the use of drones for commercial purposes except for those that secured special permission from FAA, a federal judge ruled that commercial use of drones isn’t under FAA jurisdiction. A National Transportation Safety Board judge dismissed in March a USD $10,000 fine imposed by the FAA on a business who used a glider to take aerial shots for a University of Virginia Medical Center advert. The judge ruled that the drone is not an aircraft, based on FAA’s regulations. Pilots have been complaining of the risks of aviation accidents due to drones such as when an American Airlines plane almost hit a drone 2,300 feet above the ground while the jet was near a Tallahassee airport in Florida. PL

The English tradition of visit- A very important piece ing pubs in the evening is fast of our culture, society disappearing in the country be- and social history cause of changing lifestyles as will die unless we do well as economic factors. something about it The British Beer & Pub Association reported that in 1982, about 68,000 pubs were open across the UK. However, with an average of 562 closing their doors yearly, the number of open pubs had dwindled down to less than 50,000. The dimming of lights in drinking districts is especially felt in London, partly due to the soaring cost of real estate in the capital city. With more restrictions such as the ban on smoking being imposed, running a pub has ceased being a financially rewarding exercise. It has prompted some pub owners to sell their establishments to developers, who, in turn, construct homes and flats. One example is the Chesham Arms, a 148-year-old pub in Hackney area which a developer purchased in 2012 for GBP £650,000 (USD $1.11 million). The sale, still to be approved by the local council, led to the establishment of Save the Chesham Community that aims to have the pub reopened. James Watson, one of the organisers, warned, “A very important piece of our culture, society and social history will die unless we do something about it.” PL

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INTERNATIONALNEWS

Dubai Property Blooms

Haunted homes sell in the US

Dubai has been ranked the world’s second most expensive city in which to stay, and industry experts say tourists are travelling to nearby emirates to avoid the rising costs of hotels. In a list compiled by Bloomberg, Geneva was the most expensive city, and Kuwait and Zurich were third and fourth. The average cost of a room in Geneva is USD $308, followed by Dubai at USD $273 and Kuwait at USD $253. However, even in the face of rising costs property continues to bloom in the desert kingdom. In its latest report on the UAE property market, the consultancy EC Harris said: “Over the past quarter, barely a week goes by without a new major property development being unveiled. The Dubai government has also stated that all new and existing construction projects are going to be fast-tracked to be ready for the Expo 2020.” In the first half of this year, contracts have been awarded for about USD $5.4 billion for residential projects, according to Jones Lang LaSalle’s second-quarter report on Dubai property. At the same time, residential prices and rents have decelerated. The average sale price in the emirate rose by 6 per cent in the second quarter versus 10 percent in the first quarter, the report showed. PL

A survey by Realtor.com found that 62 per cent of Americans would still buy a haunted house after they are informed of the home’s hair-raising past, while 35 per cent believe they have lived in one. Meet the growing demand for such homes is California-based Past Life Homes, which specialises in sales of “stigmatised properties,” which include those that come with ghostly inhabitants. Real estate agent Cindi Hagley told ABC News’ 20/20 that most parts of northern California have become a seller’s market for haunted homes. “You can have a dead body swinging from the chandelier, and I’m still going to have ten offers on the phone,” she said. Some states, including California, make real estate agents to inform potential buyers of a house’s haunted past. The reactions are varied. Some still push through with the purchase as if it the supernatural creatures allegedly inhabiting the house don’t matter, while others capitalise of the home’s ghastly history by asking the realtor for huge discounts. PL

62 percent of Americans would still buy a haunted house.

While sales of luxury homes in the US went up 7.8%, sales of homes priced at USD $250,000 or less went down 12% The wealth divide in the US became more pronounced with sales of homes valued at USD $1 million or more up 7.8% in early 2014, while sales of middle-class homes with price tags of USD $250,000 or less decreased 12%, according to the National Association of Realtors. The association explained the higher sales of luxury units to a better economy, tripling of stocks since 2009 and developer preference for pricier homes that generate larger profits. Those factors along with slow wage growth for the middle class, tight credit standards and soaring prices make owning a house a next-to-impossible dream for ordinary Americans, even if the prices of those homes are less than one-fourth of luxury homes. The demand for expensive homes started to improve in 2012, with the bulk of the buyers not local residents but wealthy Chinese and Russian property investors. Also on the rise is the sale of getaway homes, which accounted for 13% of all transactions in 2013, its largest market share in seven years. PL

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RISING STARS Manila – Philippines

THE PROSCENIUM

Philippine premium property developer Rockwell Land adds to its portfolio with The Proscenium. Expanding the luxury community of the Rockwell Center in Makati, The Proscenium bears the signature of global architect Carlos Ott, best known for his work on the L’Opera de la Bastille in Paris. The Rockwell Center, Rockwell’s flagship project, is a mixed-use and self-sustaining community, strategically located on a 15.5-hectare expanse of land in Makati City. The Rockwell Center provides the convenience of living in luxurious homes that are walking distance from an upscale shopping mall, office spaces, an exclusive city club and a prestigious graduate business and law school. Kirov, Sakura, Lincoln, and Lorraine are the Proscenium’s residential towers, with each tower featuring a selection of units, crafted to suit the lifestyle and preferences of buyers and residents. Kirov and Sakura provide units as large as 300 square metres, and as few as three units to a floor. According to the developer, the Lincoln and Lorraine towers also offer a diverse line up of units, including studio units with spaces comparable to typical one-bedroom apartments in other developments. Beyond living spaces suited to the needs of its community, this development offers its

Take a seat The 550 seat performance hall will be one of the highlights of the Proscenium development in Manila.

residents a full set of amenities, with almost a hectare of space devoted to luxurious swimming pools, a gym, a jogging path, a day care and a game room. The Proscenium will also be an architectural addition to the Rockwell community’s salute to local arts and culture. Included in The Proscenium’s amenities will be a 550-seater performance hall, which will soon be the home of world-class cultural performances, and a museum. Completing the experience of elegance at the Proscenium will be retail row with a line up of luxury brand outlets and fine dining restaurants. The fifth tower of The Proscenium will feature first-class office spaces for new and established businesses.

Parramatta – Australia

153 RIVERSIDE APARTMENTS

Starryland Australia has released the third building in its Promenade residential development in Parramatta, rated ‘Sydney’s most liveable city’ by the Urban Development Insti-

tute. The new 12-storey building will contain 153 apartments on the northern bank of the Parramatta River, just minutes from the Parramatta city centre. It is expected to attract the same level of excitement as did Promenade‘s first two buildings (124 apartments) which sold out on the launch weekend in May 2014, with the majority of apartments selling in just hours. Both of these buildings are now under construction with completion in late 2016. Savills Residential is expecting great interest from both owner occupiers and investors, with sales to date evenly split between the two. Irene Lau, a Director of Savills Residential Projects, said “There were a lot of young couples making their first property purchase, knowing that this development will provide a healthy lifestyle in which to raise their family, close to quality schools, universities and hospitals. For business people the close proximity to transport, dining, shopping and recreational facilities were influencing factors”. Apartments in Building Three will feature high ceilings and generous balconies or courtyards with glass balustrades to maximise views of the river and the Parramatta CBD. Kitchens feature a stone island bench with fully-integrated Bosch gas appliances. The high level of finishes include accents of bronze or copper mirrors throughout the bathrooms and kitchens and circular mosaic tiles in the bathroom.

Property Life News | Issue 13

On completion, Promenade will have 1.2 hectares of landscaped foreshore open space, a pedestrian bridge across the river, an extensive walking and cycling network, and an end value of approximately AUD $550 Million (USD $509 million). Apartments in Building Three comprise: ▶ (6) one-bedrooms (44.2 – 49.4 sqm) from AUD $440,000 (USD $407,400) ▶ (17) one-bedrooms plus study (46.7 – 69.9 sqm) from AUD $465,000 (USD $430,542) ▶ (125) two-bedrooms (63.1 – 98.8 sqm) from AUD $585,000, (USD $541,649) and ▶ (5) three-bedrooms (83.8 – 112.4 sqm) from AUD $850,000 (USD $786,975) ▶ The apartments have one or two security car spaces, while there are 70 visitor parking spots allocated for the development. Parramatta Lord Mayor Cr John Chedid said, “Promenade is an exciting development and a welcome addition to our expanding skyline, bringing more residents into our thriving CBD and modernising the riverfront.” Starryland Australia is a local division of the publicly-listed Fuxing Huiyu Real Estate Company Ltd, which develops more than one million square metres of property per year in China. The Promenade project is its first foray into Sydney. “The resort-style living at promenade will offer an active outdoors lifestyle in a beautiful location that is well connected to the Parramatta CBD,” said James Swete, the Sales and Marketing Director for Starryland Australia.

Canterbury – Australia

HABITAT

Canterbury is set to become the Inner West’s new hot spot for investors and first home

Above Left The Promenade’s new 12 storey apartment block will be the third in the Parramatta residential development. Above Right The Habitat outdoor theatre is sure to be a selling point for the Canterbury development.

buyers, says the international real estate group, Savills. It is a suburb undergoing massive regeneration and growth, attracting families and professionals. This is reflected in research showing apartments in Canterbury recorded a 105% increase in rents from 2003 to 2013, the fourth highest in Sydney. The latest development to boost Canterbury’s stock of quality apartments is Habitat, from the well-respected Lumex Property Group. Designed by leading architectural firm Turner, Habitat ‘s 134 apartments and feature timber floors, ducted air conditioning, AEG induction cook tops and integrated fridges and ovens. Habitat also has the “wow factor” of a private outdoor cinema for the exclusive use of residents. With construction scheduled to start before year’s end and be completed by mid2016, Habitat has: ▶ (32) one-bedroom apartments (internal 45-56sqm. plus 6-41sqm. balcony/terrace) from AUD $455,000 (USD $421,283) ▶ (34) one-bedrooms with study (5367sqm plus 7-44sqm external) from AUD $505,000 (USD $467,558) ▶ (27) two-bedrooms (70-78sqm plus 8-20 external) from AUD $635,000 (USD $587,919) ▶ (30) two-bedrooms plus study (7386sqm. plus 8-59sqm external) from

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AUD $660,000 (USD $611,065) and ▶ (3) three-bedroom (89-106sqm plus 28-80sqm external) from AUD $850,000 (USD $786,975). ▶ (8) townhouses will be released at a later date. Located at 308 Canterbury Road, Habitat is just 9.5km from the Sydney CBD and combines the lively ambience of the Inner West with convenient access to many parts of Sydney. Supermarkets, services and the Canterbury train and bus interchange are within walking distance of Habitat. All apartments have parking. The suburb is also surrounded by numerous highly regarded schools, such as Newington College and Trinity Grammar School. “We expect strong interest from a cross section of buyer groups who will respond to Habitat’s competitive pricing, quality of finishes and landscaped outdoor areas,” said Ged Rockliff, Head of Savills Residential Projects.

New York – USA

432 PARK AVENUE Co-developers CIM Group and Macklowe Properties announce that over 50% of the residences at 432 Park Avenue are now under contract. With construction of the tower now rising over 500 feet (approximately 152 metres), further information on the building’s architecture, interior design, and amenities has been released offering some insight into what future residents can expect at this coveted Manhattan address. Ascending 1,396 feet (425.5 metres), the residential tower located on Park Avenue between 56th and 57th Streets is to be completed in 2015. 432 Park Avenue’s architectural design has been undertaken by world-renowned archi-

Viñoly’s vision for 432 Park Avenue, a perfectly square 96-storey tower, was inspired in part by the regulating qualities of the Manhattan city grid.

tect Rafael Viñoly, who brings decades of international expertise to the landmark project. Viñoly has worked on numerous projects around the globe across a range of building types, including the Tokyo International Forum, the Howard Hughes Medical Institute and Carrasco International Airport. Viñoly’s was also appointed as Master Planner of Circus West at Battersea Power Station. Viñoly’s vision for 432 Park Avenue, a perfectly square 96-storey tower, was inspired in part by the regulating qualities of the Manhattan city grid. Using architectural concrete, steel and glass, the building is divided into seven

volumes stacked upon one another to feature 104 residences. 432 Park Avenue offers facilities and services typical of a five-star hotel – all in a setting that is completely private to residents. Viñoly’s team has created 432 Park Avenue’s fitness centre, yoga studio, conference venue, billiards room, screening and performance spaces, as well as a fully-equipped spa, complete with sauna, steam room and treatment suites. One of the standout wellness facilities of the building is its 75-foot indoor swimming pool. A porte cochére entrance on East 56th Street ensures residents’ absolute privacy and

Tasty The addition of a wine tasting room and private restaurant on the twelfth floor of 432 Park Avenue is sure to attract the attention of both domestic and international buyers.

separation from the bustle of Park Avenue and 57th Street. Likewise, the amenity spaces can be accessed via a private elevator leading directly to the building’s twelfth floor. This floor, entirely dedicated to entertaining, includes a spacious lounge, wine-tasting room and private restaurant. The space is designed by award-winning Bentel & Bentel Architects, which has created some of New York’s finest restaurants, including Eleven Madison Park, Craft and Gramercy Tavern. The restaurant will offer residents and their guests breakfast, lunch and dinner as well as room service and in-house catering. The restaurant opens onto a 5,500-squarefoot outdoor terrace overlooking East 57th Street and the Four Seasons Hotel. The terrace is an extension of the restaurant, allowing residents to host events for up to 350 guests. Specifically designed to accommodate custom-made marquees and tents, the terrace can be enjoyed year-round for charity functions, weddings or any family gathering. Residences at 432 Park Avenue range from USD $7 million to USD $95 million. PL

Property Life News | Issue 13

! D R A O B A L L A THE

Orient Express FEATURE

here has been a spike of investor interest from Southeast Asia, and the wider Asian region in properties in Europe. In fact the increase in both enquiries and interest has been so marked that someone in the Property Life office remarked that it was like an ‘Orient Express’ – a flood of interest and capital that shows no sign of slowing or stopping in the near future. That set us to thinking about the countries on the old Orient Express rail route that ran from Paris to Istanbul (or Constantinople as it was known during the 1800’s).

By a remarkable coincidence many of the countries that saw the Orient Express load and unload passengers during the 19th century are also prime investment destinations today. It is those countries which we will be examining in this issue. The Orient Express was made famous in the Agatha Christy novel (and later film versions) ‘Murder on the Orient Express’. Our journalistic journey across the many countries along the trains fabled route will not provide quite the same air of mystery as the famous novel, yet we hope that you will enjoy the trip as much as the readers of Agatha Christy’s many great works.

AN AGE OF MYSTERY AND ROMANCE The Orient Express was the name of a longdistance passenger train service originally operated by the Compagnie Internationale des Wagons-Lits. It ran from 1883 to 2009. Today a more modern version of the famous train operates as the Venice Simplon-Orient-Express luxury train service, a private venture by OrientExpress Hotels*. We cover that service in our lifestyle section. The route and rolling stock of the Orient Express changed many times. Several routes in the past used the Orient Express name, or slight variants at the same time, leading some confusion about which service was the ‘real’ Orient Express. Although the original Orient Express was simply a normal international railway service, the name has become synonymous with intrigue and luxury travel. The two city names most prominently associated with the Orient Express are Paris and Istanbul, the original start and endpoints of the fabled train service. In 1977, the Orient Express stopped serving Is-

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tanbul. Its immediate successor, an overnight service from Paris to Vienna, ran for the last time from Paris on Friday, June 8, 2007. After this, the route, still called the “Orient Express”, was shortened to start from Strasbourg instead change caused by the inauguration of the LGV Est which affords much shorter travel times from Paris to Strasbourg. The new, shortened service left Strasbourg at 22.20 daily, shortly after the arrival of a TGV from Paris, and was attached at Karlsruhe to the overnight sleeper service from Amsterdam to Vienna. On 14 December 2009, the Orient Express ceased to operate and the route disappeared from European railway timetables, reportedly a “victim of high-speed trains and cut-rate airlines”. The Venice-Simplon Orient Express train, using original carriages from the 1920s and 30s, continues to run from London to Venice and to other destinations in Europe, including the original route from Paris to Istanbul. PL * In March 2014 Orient-Express Hotels Ltd. was renamed Belmond.

Property Life News | Issue 13

LONDON TIMES Although the international business community may still want a second home in London, they may just buy the one superflat, as opposed to buying a block as an investment. Adam Waller Tax partner at PricewaterhouseCoopers

he original Orient Express started its journey across Europe from Paris, en route to its final destination in Istanbul. Today, the route taken by travellers on the new weekly Venice Simplon Orient Express trains starts on platform 2 in Victoria Station, London.The new train matches the elegance of the old â&#x20AC;&#x201C; however the spectacle of women wearing luxuriously finished gowns with pinched waistlines and men in reserved dark suits that were cut and made to measure has disappeared. Today, a more relaxed approach to luxury train travel is the norm. London has also changed. Always a favourite amongst world travellers, the British capital remains a luxury destination, however, the attractions of the city in the new millennium include a vibrant and rock solid property market.

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Property prices have soared 18% year-on-year in Q1 2014 with the city remaining popular amongst European and Middle Eastern buyers. However, rental yields remain subdued, according to the Global Property Guide, ranging from 3.25% for a 60 sqm property to 2.9% for a 175 sqm house. There are better returns to be made in Southeast Asian and other European markets which may be why Singaporeans other Asian investors are increasingly viewing London as a target for long term, multi-generational investment, for instance as a business base or second home â&#x20AC;&#x201C; rather than as a source of rental income. Those flying from Singapore will face a flight that is relatively short in international terms - a comfortable 12-hour and half hour trip to London from Changi. PL

LONDON PROPERTY INVESTMENT By Albert Fontenot

ondon and railway travel fit together like a hand and glove. Perhaps it is the romantic notion of an unhurried excursion that harkens back to a simpler era. It could be the promise of intrigue and romance, a la’ Agatha Christie’s Murder on the Orient Express. Maybe it’s just the idea of being able to actually enjoy the inimitable scenery that can only be found in continental Europe. Whatever the inherent reason, the result is an experience that is decidedly British. Speaking of the Orient-Express, those with a keen interest in railway history will remember that contrary to popular opinion, the original service known as the Orient-Express never had a route that originated in London. Fortunately, there exists today a worthy linear successor that can admirably recreate a measure of the original experience of travelling with panache. Today’s Orient-Express The Venice Simplon Orient-Express is a private luxury train service that runs from London to Venice in meticulously-restored Pullman cars from the early 20th century,

You find no man, and all intellectual, who is willing to leave London. No sir, when a man is tired of London, is tired of life; for there is in London all that life can afford. Samuel Johnson

widely considered to be the heyday of the Orient-Express. Make no mistake about it, this is true luxury travel, and from the moment you depart from Platform Two at Victoria Station, you understand how a one-way 24-hour train trip from London to Venice can cost over EUR €2500 (USD $3,315) and be totally worth it. Sumptuous comfort, impeccable service, exquisite cuisine, unforgettable scenery and meticulous attention to authen-

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ticity and detail – all of these combine to create a magical, singular experience not to be found elsewhere. London as a Destination For most people around the world, London is the place to go, rather than a point of departure. For 2014, London is once again the top destination city in the world, based on the number of visitors and the money spent there. People come from all over the world to see the Tower of London, Westminster Abbey, Buckingham Palace, the London Eye, and of course, Big Ben. London is extremely diverse – there are more than 300 languages spoken in Greater London. It is estimated that London will host almost 19 million international visitors this year, and those visitors will spend EUR €14.5 billion (USD $19.2 billion). This revenue is more than half of the total amount that international visitors will spend in the entire United Kingdom. Getting There Besides the sites and attractions, one of the factors that makes London such an desirable

destination is how easy it is to get there. For example, there are at least half a dozen daily flights from Singapore to London, and travel time is a relatively short 13 1/2 hours, and a one-way first-class ticket costs about EUR €5,300 (USD $7,027). This is only slightly longer than a flight from Shanghai (12 hours, 45 minutes), Tokyo (12 1/2 hours), or Seoul (12 hours, 10 minutes). By comparison, New York to London is approximately 7 1/2 hours, and travel from Los Angeles will take just under 11 hours. London as a Financial Center Millions of visitors travel to London because of its status as one of the only Alpha++ Global cities in the world. London wields tremendous influence and makes important contributions in the areas of art, entertainment, healthcare, transport, tourism, education, research and development, media and especially commerce and finance. London has the world’s fifth-largest city economy, ranking behind Tokyo, New York City, Los Angeles, and Seoul. The city’s Gross Value Added (GVA) is almost EUR €400 billion (USD $530.5 billion), making its economy compara-

ble to that of entire countries, such as Sweden or Iran. London also offers a number of advantages to multinational companies. English is the dominant international language of business. It is located in a central time zone, so London can serve as a “time bridge” between the American and Asian markets. English contract law is the most commonly-cited contract law used in international business. Friendly to Business London is considered very business-friendly. For example, in one district, “The City of London,” a major business and financial center, both residents who live there and businesses based there are allowed to vote in local elections. In fact, the more employees that a business has, the more votes they are allowed. For foreigners, London has relatively low taxes. Domiciled residents not from the United Kingdom pay no taxes on foreign earnings. Property Investment All of these factors – the tourism numbers, the

London Shines For the casual tourist London can provide an almost endless feast of historical and cultural attractions – for the property investor London has provided rock solid returns.

economy, the strategic advantages, the location and the business atmosphere – have up to this point combined to form an extremely conducive environment to foreign property investment. In fact, according to an April 2014 BBC report, during the two year period from June 2011 to June 2013, 69% of buyers of newly-built homes in the prime market – central London – were not British;. 49% were not even residents of the United Kingdom. This is especially true for properties in central London that could be considered prime properties. Foreign purchasers bought 49% of ALL homes valued at more than EUR €1.26 million (USD $1.67 million). To put that number in perspective, new home purchases only account for 20% of all real estate transactions. Those figures are in stark contrast to sales

Property Life News | Issue 13

outside of central London. Elsewhere in London, the vast majority of those purchasing new homes are UK residents, 79% in inner London and 93% in outer London. A Cooling Market According to London property agent Savills, prime property values (those in the top 5-10% of the market) are expected to drop by 1% in 2015. Although this is not a precipitous drop, it will be the first decline since early 2009. Even more telling, price growth has started to slow. The rate was 3.1% during 4Q 2013, but was 2.0% during 1Q 2014. “The market does face some short-term challenges which means that growth is expected to slow across the prime London market over the next 18 months.” ~Lucian Cook, Head of Residential Research, Savills

A river runs through it The Thames is an icon that has shaped the fortunes of London throughout history. Today those fortunes are also being shaped by the global demand for exceptional investment returns.

Changes in Taxation Two other factors may give foreign investors pause when it comes to purchasing prime London properties as investments. Firstly, in 2015, foreign property owners will be facing an introduction of a 28% Capital Gains Tax. Currently, people who own properties in the United Kingdom and are considered nonresidents are exempt from CGT. There will also be an increase in stamp duty and an annual tax on enveloped dwellings. Secondly, one of the original catalysts that

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buoyed up the flow of foreign investments in prime central London locations was a favourable exchange rate. That advantage is eroding as the British Pound is realising stronger performance. For example, as of the beginning of August 2014, the exchange rate for GBP/SGD is at 2.1045. Eighteen months ago, in March 2013, that rate was 1.8700. “Foreign investors may be struggling to find value in the prime London market now. Not only have the sterling prices risen strongly, but the appreciation of the pound has magnified the increases when converted to foreign currency. Asian investors, in particular, had seen London property as being undervalued following the financial crisis, but are finding it less attractive now.” ~Andrew Goodman, Senior Economic Advisor, ET ITEM Club PL

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STUDENTS ENDORSE PRIVATE HOUSING MODEL IN THE UK The student property market in the UK has shifted significantly in recent years with students turning away from houses of multiple occupation (HMOs) and towards purposebuilt student accommodation (PBSA).

Southeast Asia and Europe. Vanitha Nagarajah, 23-year-old student from Malaysia is one such tenant and has lived at Vita Student’s residence in Liverpool called The Chapel for the past year.

There are around 2.3 million students in the UK, the vast majority of which haven’t got access to university-provided accommodation, meaning that a serious supply-anddemand issue is facing nearly all the main university cities in the UK.

Of her time at The Chapel, she says:

The industry has been heralded as being one of the strongest property markets, but there has been little concrete evidence about the popularity of PBSA to date since many of the developments have been under construction. However, in a clear demonstration of where the sector is heading, leading student property provider, Vita Student has announced that 75% of its 969 student apartments across the UK have already been reserved three months ahead of the 2014/2015 academic year, with its development in Exeter already at full capacity. The level of student demand for PBSA means that it is an ideal buy-to-let opportunity for investors from around the world as the occupancy level is likely to be extremely high, year after year. Fifteen percent of Vita Student sales have been to savvy buyers from Southeast Asian countries such as Malaysia and Singapore. Seventy percent of the new Vita Student residents are from overseas, predominantly

“The past year has been a great experience and definitely worth the money I have paid to live here. The studio is spacious and the facilities are great – I love having my own flat screen TV! “The staff here have been warm, helpful and welcoming at all times which has really made a difference to how at home I have felt.” Vanitha has enjoyed her time at The Chapel so much that she has re-booked to live with Vita Student for the 2014/2015 academic year and has chosen to move into the Tinlings residence next door. “The main reasons I re-booked for the upcoming year are that I believe the studios are very good value-for-money and the residence is in a perfect central location, conveniently close to everything in the city. I’m really looking forward to next year, even more so because two of my friends have also booked studios in Tinlings. During my time at university, I have stayed in several different student residences but my year with Vita Student has been my most enjoyable and pleasant stay!”

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“I’m really looking forward to next year, even more so because two of my friends have also booked studios in Tinlings. During my time at university, I have stayed in several different student residences but my year with Vita Student has been my most enjoyable and pleasant stay!”

FABULOUS FRANCE

aris today is a far cry from the city that greeted those leaving the platform at the Gare de Paris station. The station, built in 1849 was recognised as one of the most impressive in Europe, however the opulence of the Orient Express in its original 1880â&#x20AC;&#x2122;s form would have outshone the architectural majesty of even the famous Gare de Paris. In 1881, when the Orient Express was entering into its second year of service Paris had a population of just over 2.2 million people. Today the City of Lights and its surrounding neighbourhoods are home to around 10.5 million people. Those 10.5 million people live in a city that has been battered by the global financial crisis. The French property market has been trending lower for a number of years. Prices fell 2.64% in the twelve months prior to the end of Q3 2013, making it the sixth

quarter of consistent declines. Rental yields during that period were also poor, at 3.64%. A recent Savills report indicates that foreign buyers are overwhelmingly either American or from a variety of European countries. Americans make up 10% of foreign buyers, while buyers from Britain, Belgium, Spain and Germany make up the bulk of the rest of the foreign property investment contingent. The Savills report indicates that there is increasing interest from Asian buyers attracted to a variety of French Real Estate. Wine estates are of particular interest. Property in the The City of Lights may be in the doldrums - however those who know the city well are confident that the merits of its many attractions will be enough to keep the tourists arriving. It is likely that if tourist numbers remain robust then property values will rebound. PL

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Tax increases and weak household spending, coupled with volatility in the Eurozone, have impacted negatively on Parisâ&#x20AC;&#x2122;s real estate markets.

Savills 12 Cities Report 2014

THE CITY OF LIGHTS PARIS PROPERTY by Albert Fontenot

t is impossible to consider the history of the Express d’Orient apart from its original setting, La Ville-Lumiére’, “The City of Lights” – the city of Paris, France. Like its birthplace, the OrientExpress, is steeped in romance, decadent opulence and unparalleled beauty that cannot be found anywhere else on earth. For many, it was more than the epitome of luxury travel, it was also the ultimate statement about one’s social standing, station in life, and class. Everyone who was anyone in upper-crust Western Society in the late 19th and early 20th centuries traveled aboard the Orient-Express. Royalty, heads of state, prominent business people, actors, artists, authors and aristocrats all could be seen elegantly dressed to the nines as they traveled between some of the principal cities of Europe. The original route was from the Gar de

l’Est terminal in Paris to Giurgiu, Romania, or Budapest and Paris will cost just shy of via Munich and Vienna. In Romania, pas- EUR €2000 (USD $2,659), while the once sengers would take a ferry across the Dan- a year re-creation of the original route, ube River to reach Ruse, Bulgaria. From Paris to Budapest to Bucharest to Istanbul Ruse, they would take another train to is priced at a little over EUR €6700 (USD Varna. Finally, they would complete their $8,909) one-way, coming or going. PL journey by taking another ferry into Constantinople. Over time, other routes began operating – includIf you are lucky enough to have ing railway service to the lived in Paris as a young man, Serbian cities of Belgrade then wherever you go for the and Nis and a carriage ride rest of your life, it stays with you, to Plovdiv, Bulgaria. After for Paris is a movable feast. World War I, other variations Ernest Hemingway of the route would include Milan, Venice, Trieste, Zürich, Innsbruck, Budapest, Bucharest, and Athens. At one point, the service went from edge-to-edge across continental Europe.

A WORTHY MODERN - DAY SUCCESSOR

Luckily for rail fans worldwide, the legacy of the original Orient Express lives on today in the carriages of the Venice Simplon OrientExpress, a private venture that uses vintage carriages from the 1920s and 1930s that have been restored to their former glory. Running only part of the year – March through November – this is the means of transportation of choice for discriminating anoraks everywhere. A one-way trip in either direction from between Venice

Property Life News | Issue 13

PARIS AS A DESTINATION

or millions of people across the globe, Paris is the top city for any dream vacation. It played host to over 15 million tourists in 2013 and numbers continue to grow. Even nonFrancophiles will find a host of sights, points of interest, and attractions throughout the city. The city and greater Paris metropolitan region is home to almost 4000 historical monuments and four UNESCO World Heritage sites. Paris does not disappoint. The importance of international visitors to the Parisian economy cannot be understated – in 2012, Paris received 29 million visitors and received EUR €77 billion (USD $102 billion) in revenue, which represents 7% of the city’s GDP. Some estimates state at over 80% of the unemployed people in the Paris region have jobs as a result of tourism.

GETTING THERE

In addition to the overwhelming plethora of points of interest, one reason that Paris is so high on any list of preferred destinations is the simplicity of traveling there. Because of its prime European location, the city can easily be reached by rail, air, or even a car, if one prefers to drive. Nearly every major city in the world offers flights to Paris. A one-way, first-class nonstop ticket from Singapore to Paris cost approximately EUR €5700 (USD $7,577) and will take roughly 13 and a half hours of air travel. The flight from Tokyo is approximately an hour shorter, but costs significantly more – between EUR €9000 (USD $11,964) and EUR €13,000 (USD $17,277). The trip from Seoul is both the least expensive and the shortest, at EUR €5000 (USD $6,645) and 12 hours.

PARIS AS AN ECONOMIC DESTINATION

Because it is the French capital as well as the country’s most populated city, and given its status as an unofficial world capital for fashion, cuisine, culture and history, it should come as no surprise that the economy of Paris is considered among the most important in the world. The GDP of Paris represents almost a third of the country’s national wealth, and nearly 5% of the GDP of the entire European Union. Although some people tend to purport that France is in a decline, in reality, the French economy expanded by .3% during 4Q

Louvre museum Louvre museum at dusk in Paris. This is one of the most popular tourist destinations in France displayed over 60,000 square metres of exhibition space.

2013. In 2014, the expectations are that the economy will grow by .9%. Paris, in particular, seems flushed with cash, with a GDP of EUR €607 billion (USD $807 billion). That puts it ahead of most countries in the world, including European nations such as Switzerland, Sweden, Norway and Austria. The GDP of Paris is nearly 2 1/2 times that of Singapore or Hong Kong. If Paris were a country, it would rank as one of the 20 largest economies in the world. The city serves as the headquarters of over 30 Fortune Global 500 companies.

CHALLENGES AHEAD

Although the French economy is expected to grow, that growth significantly lags behind much of the rest of the European Union. For example, the UK economy is expected to grow by 3.2% in 2014. Unemployment is approaching 11%, with youths being unemployed at a staggering 26.5%. French employees face a tax burden of 57%. Foreign Direct Investment (FDI) into France has fallen by 95% in the past decade. In 2013 alone, overseas investment in France fell by 77%, when just EUR €4.4 billion (USD $5.85 billion) of foreign capital went into France, the lowest amount in almost 30 years. In comparison, FDI in the UK for the same period was EUR €40.27 billion (USD $53.5 billion). Other companies that outpaced France included Germany at approximately EUR €25 billion (USD $46.5 billion) and Spain at nearly EUR €28 billion (USD $37.21 billion).

TAXATION

Dispirited due to a slow-moving economy, rising unemployment, and a heavy taxation burden, many entrepreneurs and businessmen are fleeing France. Currently, approximately 1.6 million French citizens have taken up residence outside of the country. This is a 60% increase from 2000. The largest number, around 350,000, have moved to London, which some have given the nickname “Paris on the Thames.” Additional thousands have headed to Shanghai, Hong Kong, New York City and other locations.

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Capital gains taxes are extremely high. Nonresidents of France or the EEA pay capital gains tax at the rate of 33.3%, plus 15.5 “social charges”, totaling a basic charge of 48.8%. In addition, there can be a supplementary tax, depending upon the size of the gain. For example, a gain that is greater than EUR €250,000 (USD $332,250) will trigger an extra tax of 6%. Likewise, the tax rate for rental income rose sharply for nonresidents in 2012. Nonresidents pay a basic rate of 20% of tax on the net rental and other income, but they also pay 15.5% “social charges” arising on the net rental income from unfurnished properties, for a total charge of 35.5% Property investors should be aware that France has the second-highest property tax rate as a percentage of the GDP, approximately 3.5%, compared to a 2.3% average across the European Union. When viewing taxes on property as a percentage of total taxation, France also has the second-highest rate, approximately 7.8%. In both instances, the country with the highest property tax rates is the United Kingdom.

A UNIQUE AND UNFORESEEN OPPORTUNITY?

“(There is)… A flood of interest because there are heritage properties coming onto the market which have never been sold before… Paris is undervalued compared to prime central London, and I am starting to have investors say they are priced out of London.” ~Susie Hollands, Founder of Vingt Paris, a property agency

According to the French Real Estate Feder-

ation (FNAIM), real estate prices rose just .8% in 2012 and actually dropped 2.9% in 2013 across the whole of France. Curiously – or perhaps not so curiously –in Île-de-France, the region which includes Paris, prices are up 6.7% compared with 2007, and in an adjacent region, Nord-Pas-de-Calais, there is a 3.7% increase. High-end properties in Paris have gained in value by 14% since 2008. Among foreign investors, Russians have taken the lead, accounting for up to 15% of new purchases. Asian investors, particularly the Chinese, and investors from Argentina and Brazil each add between 5 and 7%. For the top rung on the ladder of luxury real estate, there are three main streets in Paris that are driving the market. The most premium residential space is located on Avenue Montaigne, were purchase price will be between EUR €20,000 (USD $26,580) and EUR €30,000 (USD $39,870) per square metre. In fact, if an upper floor apartment has been decorated by a well-known designer and has a great view overlooking the Avenue, prices have been known to reach EUR €50,000 (USD $66,450) per square metre. Among the Chinese, the most sought-after street is the world-famous Champs Elysées. Prices are on “the most famous street in the world” are comparable with those on Avenue Montaigne, but there are fewer residential properties to choose from.

LOW PRICES, LOW RENTS, LOW YIELDS

Elsewhere in the city, the average price of an apartment is EUR €8260 (USD $10,977) per

square metre. To be more specific, an apartment in the city center can be purchased for an average of EUR €9785 (USD $13,004) per square metre, while an apartment outside of the city center has an average price of EUR €6838 (USD $9,088) per square metre. As a comparison, apartments in the Paris city center are approximately 12% lower than the equivalent property in London, while conversely, an apartment outside of the center is approximately 11% higher than its London counterpart. These numbers are current as of August 2014. For investors, this number represents a 3.1% inflation-adjusted decline year--overyear from 2012. This trend was slightly reversed in 1Q 2014, where prices actually rose .2% over 4Q 2014. While prices are down, transaction volume in Paris is up – in Q3 2013, existing home sales rose 13% year-over-year. Overall, home prices are expected to suffer moderate losses in 2014 of around 2%. Compared to other major European cities, prices in Paris offer a surprising bargain. Luxury homes in Paris currently cost between EUR €11,000 (USD $14,619) and EUR €17,000 (USD $22,593) per square metre. Geneva and Vienna are valued at approximately EUR €25,000 (USD $46,515), London at EUR €32,000 (USD $42,528), and Monaco at a stratospheric EUR €40,000 (USD $53,160) per square metre. To put that in better perspective, in London, EUR €1 million (USD $1.329 million) will purchase you 33.2 square metres, while in Paris, that same EUR €1 million (USD $1.329 million) will buy you 56.4 square metres. In Paris, a one-bedroom apartment will rent for between EUR €829 (USD $1,101) and EUR €1111 (USD $1,476), depending on its location within or without the city center. A threebedroom apartment will range from EUR €1748 (USD $2,323) - EUR €2454 (USD $3,261), with the same qualification. Again, for comparison, these rental rates are 30% to 40% lower than the same type of apartment in London. Unfortunately, rental yields in Paris are definitely not cause for excitement. As of August

2014, gross rental yield within the city center were an anemic 2.73%, and outside of the city center, the results are no more robust at 2.85%. Even more alarming, these poor returns may be shrinking even further. New rental controls are to be imposed on 28 locations in France, including Paris, and these controls are designed to increase “affordability.” If the rental price on a property is 20% to 25% higher than the average for that location, it will be subject to a mandatory rate reduction, as determined by each prefecture. It has been estimated that this could result in a lowering of rents in up to one-fourth of all Paris properties.

A PROPERTY INVESTOR’S QUANDARY

Ultimately, the question of whether or not a foreign property investor should direct any attention towards the Paris property market is going to depend greatly upon the individual investor’s preferred investment strategy and the individual property itself. There is no “one size fits all” strategy that seems to have a clear-cut advantageous position. To clarify, if an investor prefers to deal mainly in rental properties, then Paris does not currently seem to be an ideal location for any significant short-term returns. On the other hand, if a savvy and attentive investor happens across just the right pied-àterre or heritage property château – where the seller is motivated and cash in hand means a lower price – then an investor may stumble onto a fortunate acquisition where the profit can actually outperform the accompanying taxes. PL

Notre Dame Cathedral enjoys a magnificent setting in the heart of Paris, and is justifiably one of its most popular attractions

Property Life News | Issue 13

SWISS PROPERTY INVESTING by Albert Fontenot

Swiss Alps Winter in the swiss alps Switzerland

Switzerland’s well-performing economy and stable currency point to the long-term viability of real estate investing.

REAL ESTATE ACQUISITIONS BY NONSWISS CITIZENS In Switzerland, foreign investment in real estate is governed by a national law known as the “Lex Koller”. This law restricts the purchase of certain property by non-Swiss residents. Basically, investors who are not Swiss are allowed to invest quite freely in commercial properties, including offices, retail properties, warehouses, hotels, restaurants, and hospitals. However, with very few exceptions, they are not allowed to invest in residential properties. The purpose of this prohibition is to avoid market speculation with residential properties, ensuring that home prices and monthly rents remain affordable.

LEX KOLLER KEY ELEMENTS

uring the zenith of train travel, in the first half of the 20th century, there were no less than three services running under the Orient-Express brand, including the Arlberg Orient Express, which would stop in Zürich on its way to or from Budapest. Unfortunately, World War II interrupted the route for years, and in 1962, the Arlberg Orient Express was no more. The company’s modern-day successor, the Venice Simplon Orient-Express, no longer stops in Switzerland, but guests can still experience the country’s beauty, nonetheless. Usually, passengers will sleep while the train journeys through eastern France and northern Switzerland, typically not awakening until the train is to the east of Zürich. Lucky guests may even get to marvel at a view of the Zürichsee or the towering peaks that occupy the North Shore of the Walensee.

THE BEST ECONOMY IN EUROPE… OR THE WORLD? According to the Global Competitiveness Index 2013 – 2014, put out by the World Economic Forum, Switzerland has the top-ranked economy in the world, with a strong performance across the board. Most especially, they have notable strengths in innovation, labor market efficiency, and sophistication of its business sector. Productivity stays high because labor markets are astute at balancing both business efficiency and employee protection. Switzerland has one of the most highlydeveloped financial markets in the world and an excellent infrastructure. Perennially, the country is ranked among the world leaders for Gross Domestic Product per capita.

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The law has been carefully set up to avoid circumvention. Definitions are clearly set forth: • Real Property – this includes direct investments, building leases, shares in property companies and property funds, preemptive rights, usufructuaries, or any other right that results in a similar position to Property Owner. • Non-Swiss Residents – any citizen of the European Union (EU) or European Free Trade Association (EFTA) member state that does not possess actual and legal Swiss residence. Any citizen of any other country without a permanent permit for Swiss residence. – Companies/corporations without an actual/statutory registered office in Switzerland. – Companies/corporations domiciled in Switzerland that are dominated by a non-Swiss resident. – An actual Swiss resident who acquires a property in the interest of or for the account or benefit of a non-Swiss resident. • Dominant Position – a non-Swiss resident is considered to be “dominant” within a company/ corporation if they are able to influence the administration or management of a company by

virtue of their financial participation, voting strength, or any other reason. For example, if the individual owns or controls one third of a company’s shares or voting rights, they are considered to be in a dominant position.

EXCEPTIONS TO LEX KOLLER A citizen from a country other than the European Union or European free trade Association who does not possess a permanent Swiss residence permit may purchase one residential property, provided that the property will serve as that person’s actual and legal main residence in Switzerland. Any property exceeding 3000 square metres must be preapproved to ensure that it is not purely a capital investment. A citizen of the EU or EFTA who commutes from outside the Swiss border may purchase one residential property to serve as a secondary residence in the region of their place of work in Switzerland. There is no size limit for the house or apartment purchased, but any land exceeding 1000 square metres needs preapproval.

VACATION HOME EXCEPTION A non-Swiss citizen may purchase a vacation home in Switzerland, with Lex Koller approval. The home must be located in a community that has been designated as a “tourism area”, the size of the apartment/house does not exceed 200 square metres, and the land area does not exceed 1000 square metres. The individual is only allowed one vacation home, and there is a strictly-enforced quota that only allows 1500 vacation homes to be purchased throughout all of Switzerland annually.

ACQUIRING SWISS RESIDENCY Due to its high standard of living, world-class infrastructure, political neutrality, and emphasis on personal freedoms, Switzerland is a dream destination for immigrants worldwide. However, it is among the most expensive places to live on earth, so it is most ideal for wealthy individuals. For ultrahigh-net-worth investors, the route to residency most suited to them is Swiss Lump-Sum

Taxation. Not only will this allow the new resident to freely purchase and sell all types of property in Switzerland, it immediately grants visa-free access to the entire Schengen Area of Europe. This is a fixed-fee Swiss residence program, whereupon the new resident pays an annual lump-sum taxation fee that is a minimum of EUR €207,000 (USD $274,275), and may be as high as EUR €826,000 (USD $1.09 million). Also charged is a one-time Residence Application fee of approximately EUR €42,000 (USD $55,650) for an individual, with an additional EUR €4200 (USD $5,565) charged for a spouse and for each child. In addition, there is an annual Maintenance fee of approximately EUR €13,000 (USD $17,226). Concentrating on Commercial Acquisitions Foreign investors may purchase as many commercial properties as they wish, of virtually any size, and they are not obligated by law to obtain any special governmental permits in order to do so. Because inflation

in Switzerland is maintained at such a low level – stable at 0% in July of 2014 – commercial real estate is seen as an attractive option and reliable means of capitalizing assets. Usually, it is most convenient to have a local management company take care of the building and grounds maintenance, tenant concerns, and account management and taxes, typically for an average charge of 6% to 8% of the lease income.

top burden of 25% – 50%. After that length of time, the tax is gradually reduced, with a maximum relief from payable tax of 50% – 70%. For ownership periods of less than four years, a surcharge of up to 50% may be imposed upon the regular tax. Most municipalities and some cantons charge real property taxes, with the rates varying from .05% to .3%. Tax on rental income is very high, approaching and often exceeding 50%. PL

TAXATION At the federal level, profits earned from the sale of private property are not taxable, while gains from the sale of business property are counted and taxed as income. However, at the cantonal and municipal levels, a real estate capital gains tax is imposed on both types of sales. The rates charged are progressive, i.e., the longer the property is owned, the lower the tax rate. The standard rate is applicable after a “holding period” of four – five years, with a

APARTMENT PURCHASE PRICE, CITY CENTER PER M2 Zürich – EUR €9580 (USD $12,693), Geneva – EUR €11,975 (USD $15,867), Basel – EUR €7,295 (USD $9,666), Lausanne – EUR €8,259 (USD $10,943) APARTMENT PURCHASE PRICE, OUTSIDE OF CITY CENTER PER M2 Zürich – EUR €6,607 (USD $8,754), Geneva – EUR €8,190 (USD $10,852), Basel – EUR €6,937 (USD $9,191), Lausanne – EUR €6,194 (USD $8,207)

Switzerland is a success, Switzerland is unique and of use to the world. Of that we can be proud. Didier Burkhalter, President of the Swiss Confederation

Zurich View of the Zurich donwtown

MONTHLY RENT, CITY CENTER (1 bedroom) Zürich – EUR €1,446 (USD $1,912), Geneva – EUR €1,493 (USD $1,978), Basel – EUR €939 (USD $1,244), Lausanne – EUR €1,080 (USD $1,431) (3 bedroom) Zürich – EUR €2,753 (USD $3,648), Geneva – EUR €3,017 (USD $3,997), Basel – EUR €1,938 (USD $2,568), Lausanne – EUR €2,257 (USD $2,990) MONTHLY RENT, OUTSIDE OF CITY CENTER (1 bedroom) Zürich EUR €1,030 (USD $1,365), Geneva – EUR €1,347 (USD $1,785), Basel – EUR €938 (USD $1,243), Lausanne – EUR €908 (USD $1,203) (3 bedroom) Zürich – EUR €1,879 (USD $2,490), Geneva – EUR €2,870 (USD $3,803), Basel – EUR €1,713 (USD $2,270), Lausanne – EUR €1,793 (USD $2,376) GROSS RENTAL YIELDS, CITY CENTER Zürich – 3.38%, Geneva – 2.87%, Basel – 2.99%, Lausanne – 3.06% GROSS RENTAL YIELDS, OUTSIDE OF CITY CENTER Zürich – 3.42%, Geneva – 3.88%, Basel – 2.97%, Lausanne – 3.34%

Property Life News | Issue 13

There are big funds looking at commercial real estate in Portugalâ&#x20AC;Ś Investor appetite for Portugal is clearly on the rise. Luis Rocha Antunes Head of Capital Markets Group Cushman & Wakefield Lisbon

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Commerce Square Statue of King Jose I on the Commerce Square (Praca do Comercio) in Lisbon, Portugal.

PORTUGAL PROMISING VALUE T

he Santa Apolonia station in Lisbon on the banks of the Tagus River, which opened in May 1865, was never a stop on the itinerary of the Orient Express. However, the popularity of Portugal as a property investment destination demands that we deviate from our set route. Think of it as a day trip to one of the most exciting property destinations in Europe. During the 1880s when Portugal’s population stood at only 4.6 million, the local men who thronged the platforms of the Santa Apolonia station to greet incoming trains wore black tight-fitting trousers with white shirts with a bright-coloured vests, while the women wore colourful gathered skirts with aprons and cloth shawls over their shoulders. Today, the heady days of the Orient Express and other luxury train services have long passed and the journey towards a normalisation of the Portuguese property market has begun. Like other European Union members, Portugal was hit hard by the global financial crisis in 2008 that saw three years of

Santa Apolónia Station Santa Apolónia is the oldest railway terminus in Lisbon, Portugal. It is situated in the city’s central part on the bank of the Tagus river in the historical district of Alfama. It was opened on 1 May 1865.

Today, the heady days of the Orient Express and other luxury train services have long passed and the journey towards a normalisation of the Portuguese property market has begun.

significant declines in property values. The situation has only recently started to improve when in Q1 2014 property prices showed a 1.22% growth. Fortunately for rental property owners, the rental yield is good, averaging 4.36%. However, Cushman & Wakefield is optimistic that for 2014, commercial property investments from overseas would double to EUR €800 million (USD $1.09 billion). Residential properties continue to be attractive to foreign investors because of the historically low prices as well as minimum restrictions on ownership. Most of the Asian buyers are from China and India who are taking advantage

of Portugal’s Golden Visa scheme which allows residency, access to a Schengen Visa and a path to citizenship for property investment of EUR €500,000 (USD $663,295). The Portuguese property market is still relatively unknown among Singaporean investors – perhaps a function of the fact that only one airline, Lufthansa, flies a direct 15hour, 40-minute Changi to Lisbon route. A recent uptick in interest in Portugal as a property investment destination shows that Singaporeans are increasingly being drawn to the Mediterranean climate, beaches, world-class golf courses, the Schengen Visa opportunity and low prices. PL

Property Life News | Issue 13

A GREAT INVESTMENT OR AN OPPORTUNITY TO OWN A BEACHSIDE APARTMENT FOR MORE INFORMATION CONTACT US: Tel No: (+65) 6534 9390

ALL ABOARD FOR VALUE

GERMAN PROPERTY

INVESTMENTS By Albert Fontenot

ortunately for train lovers and those who can appreciate the amenities of luxury travel, the Venice Simplon Orient-Express re-creates the experience of the iconic original by offering a plethora of service options between several major European cities. Unfortunately for Teutonphiles, the train does not make a stop in Germany. There is service from either Paris or London to Innsbruck, the capital of Tyrol, Austria, and from there, it is less than a two-hour drive to Munich, the capital and largest city of the German state of Bavaria. From London, the train fare aboard the Venice Simplon Orient-Express to Innsbruck is EUR €2,217 (USD $4,266) or EUR €3,190, (USD $4,230)depending upon the choice of double-occupancy or a cabin suite. From Paris to Innsbruck, the corresponding fares are EUR €1,820 (USD $2,413) and EUR €2,791 (USD $3,701), respectively.

CONCRETE GOLD After the financial crisis of 2009, the German property market only attracted EUR €10.5 billion (USD $13.9billion), but in 2013, the market rebounded sharply, with EUR €30.4 billion (USD $40.3 billion). Some experts predict that 2014 will see sales in excess of EUR €35 billion (USD $46.4 billion). Indeed, in the first six months of the year, property investors spent nearly EUR €17 billion (USD $22.5 billion) on commercial real estate, and this number represents a 27% year-over-year increase. Almost 50% of property investors in the first six months of 2014 were from countries other than Germany, up from a decade ago, when foreign investors only made up a quarter of purchasers. About 15% of investors were from the United States, 11% were from the United Kingdom and 9% were from France. In other countries, foreign investors are able to find an easy inroad by focusing on one or two major cities. For example, Asian

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and American investors made their way into the United Kingdom and France by focusing on London and Paris. This strategy is not as effective in Germany. Germany is so large that regional variances are created, and this precludes the existence of any centralised property hub. Each of Germany’s major cities, Berlin, Munich, Hamburg, Frankfurt, and Düsseldorf, has its own particular advantages, effective strategies and potential shortfalls.

RISING RENTS, RISING PRICES Over the past five years, rent in Germany has risen by 15%. Only 53% of German residents own their own homes, so rising rent is an encouraging sign for property investors. At the same time, apartment prices have risen by 23%. Across the whole of Europe during that period, prices are down by 3.7%. One possible reason for the increases is a significant shortfall in available apartments. For example, approximately 30,000 people move to Berlin annually, but only

Das Glück hilft dem Kühnen. Translation—“Fortune favors the bold.”

about 4,000 apartments are built in the city every year.

COMPARE THE NUMBERS In London, it costs EUR €11,115 (USD $14,738) per square metre to buy an apartment in the city’s centre and EUR €6181 (USD $8,196) outside of the centre. In Berlin, an apartment’s purchase price is EUR €3,202 (USD $4,246) and EUR €1,968 (USD $2,609), respectively. Likewise, in London, a one-bedroom apartment will rent for between EUR €1,181 (USD $1,566) and EUR €1,868 (USD $2,477), depending upon location, while a three-bedroom apartment will range between EUR €2,126 (USD $2,819) and EUR €3,475 (USD $4,608). That same one-bedroom apartment in Berlin will cost between EUR €428 (USD $568) and EUR €610 (USD $809) per month, while the three-bedroom will range between EUR €876 (USD $1,162) and EUR €1,259 (USD $1,669). Munich is the most expensive of Germany’s major cities, while Düsseldorf is the least

expensive. In Düsseldorf, apartment can be purchased for between EUR €2,000 (USD $2,652) and EUR €2,164 (USD $2,869) per square metre, while in Munich, the purchase price will range from between EUR €4,211 (USD $5,384) and EUR €6,688 (USD $8,873) per square metre The rents in Düsseldorf for a one-bedroom apartment will range from between EUR €450 (USD $597) and EUR €541 (USD $717), depending upon location, while three-bedroom is currently going for between EUR €975 (USD $1,293) and EUR €1,500 (USD $1,989). In Munich, the onebedroom range is between EUR €661 (USD $876) and EUR €856 (USD $1,135), while a three-bedroom can be rented for between EUR €1,222 (USD $1,620) and EUR €1,734 (USD $2,299) per month. Rental yields are more or less equivalent to that of London, with the exceptions of Munich and Düsseldorf. For comparison, London has rental yields of 3.72% within the city centre and 4.17% outside of the city centre.

Düsseldorf offers the best Gross Rental Yield, 6.78% within the city centre and 5.36% without, Berlin’s yields are 4.43% and 5.04%, Frankfurt’s yields are 3.94% and 4.47%, while Munich brings up the rear at 2.95% and 3.47%.

SOME CAVEATS Germany has several “major” cities and nearly 2 dozen more “large” cities, each with their own idiosyncrasies requiring seasoned insight and local expertise. If spread too thinly, that insight and expertise may take longer to acquire. For that reason, it is advisable for investors who are new to the German property market to have an experienced fund manager on-site, a German one, if at all possible. Also, in a nation where so small a percentage of citizens own their own home, liquidity can be an issue. Investors would be well advised to take into consideration the fact that they may not be able to sell a property in Germany as quickly as they might like. PL

Property Life News | Issue 13

Grand Canal and Basilica Santa Maria Venice has long been regarded as one of the most beautiful and romantic cities on Earth.

n the 1880s Venice Simplon Orient Express staff garbed in blue or black and white uniforms at the Sta. Lucia, Venice station greeted Italian passengers who stepped onto the platform of the famous city of canals. The gracious offers of assistance were certainly appreciated by the passengers, including the elegantly dressed women who wore long-sleeved blouses, skirts demurely concealing the ankle, white stockings and hat, while carrying a parasol. The station, built from a convent and a church named Sta. Lucia that was demolished in 1861, had its façade decorated with Venetian lions, lending an air of genteel old world charm to this stop on the journey of the Orient Express across Europe to its final destination in Istanbul. Unfortunately for many Italians today, luxury is the last thing on their mind, following the global financial crisis of 2008 which saw property prices plummet, a situation that is only today showing any signs of im-

provement. As of Q3 2013, the house price index showed a decline of 6.54% over the previous 12 months. Home sales were down 6.6% and rental yields were considered very poor, ranging from 4.22% for 50 sqm flats to 3.71% for 85 sqm and 3.84% for 120 sqm apartments. The declining property prices of Italian homes have however attracted foreign property investors, resulting in cross-border investments hitting the EUR €3.6 billion (USD $4.9 billion) mark in 2013, of which EUR €900 million (USD $1.2 billion) came from Asia and Middle East, according to property management group CBRE. Singaporeans wishing to join the growing number of Asian owners of stylish Italian properties can book a flight that will take approximately 11 hours and 50 minutes from Changi International Airport to Rome to see for themselves why investors from across the globe are snapping up Italian property, from condominiums and castles to wine estates and villas. PL

ITALY CHARMS INVESTORS Although Italy’s economic challenges have led to a more cautionary attitude amongst buyers, the world’s wealthy still consider it one of the most desirable second-home hotspots. Knight Frank, Postcards from Tuscany

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Greece has always been, and will continue to be, a popular tourist destination and the tourism industry in fact concentrates the highest demand from both local and foreign investors. Alexander Moulas Property Advisor, Savills Greece

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ALL ABOARD FOR GREECE T

he Athens station is the result of the merger of the older Stathmos Pelponnisou, which opened in 1884, and the Larissa station, which was inaugurated in 1904. This station was an integral part of the route taken by both the original Orient Express lines and its more modern variant (London to Athens via Paris-Zürich-Vienna-Budapest-Belgrade-Skopje), which was in service until 1962. The original Orient Express which saw its heyday in the late 1800’s would have stopped in a city of no more than 130,000 people. Today the bustling metropolis of 4 million is the capital of a country of almost 11 million citizens. Greece was one of the EU nations hardest hit by the global financial crisis in 2008. The effects of this are still being felt in the property market, which remains depressed. The average price of apartments was down 10.87% in 2013 (from highs prior to the financial crisis) while on a quarterly basis, as of Q4 2013, it was down 4.23%. Rental yield is a very poor 2.87%.

Greece has recently been placed on the radar for second homes because of the low prices, with most buyers from the US or Europe. With the June 2014 visit of Chinese Premier Li Keqiang to Greece, the country is hopeful that more Chinese property investors can be convinced that buying real estate on both the mainland and the Greek Islands as a lifestyle choice is a viable option. The country is also making gains in the property market due to the huge interest in its Golden Visa scheme which offers residency and access to a Schengen Visa in exchange for property investment. EUR €250,000 is required to qualify, less than the EUR €300,000 required by Cyprus and EUR €500,000 in Spain and Portugal. The Greek residency permit is renewable every five years for as long as investors own the property, so it can last a lifetime. Singaporeans who might be interested in Greek property can book a flight with a number of different airlines that will have them in Athens in around 13 hours and change PL

Santorini Golden light on the sea and Santorini island at sunset, Greece

Property Life News | Issue 13

GREEK PROPERTY INVESTMENT By Albert Fontenot

“W

onder is the beginning of wisdom.” ~Greek proverb

Most of the general public is familiar with the iconic Orient Express, the famous luxury train service that ran across continental Europe from London (or Paris for purists) to a terminus in Istanbul. What many people fail to remember is that during its heyday of the pre-World War II 20th century, there was another, more southerly route taken by the Arlberg Orient Express that offered a different journey through Milan, Venice, and Belgrade, before traveling on to the endpoint of Athens. Unfortunately, World War II and other European conflicts interrupted the service several times, and by 1962, the Arlberg Orient Express had stopped running, and service from Paris to Athens was curtailed to twice a week. In 1976, the direct route from Paris to Athens was discontinued. The next decades saw the fortunes of the original company continue to decline, with direct service from Paris to Istanbul ending in 1977, and from there, further reductions until the slightly renamed “Orient-Express” was discontinued in 2009.

THE VENICE SIMPLON ORIENTEXPRESS As good fortune would have it, there exists today an heir apparent, the Venice Simplon Orient-Express, which combines impeccable service, sumptuous appointments, world-class cuisine and original-era railway carriages that have been lovingly and painstakingly restored to their former glory to re-create the pomp, lux-

ury, comfort, and overall experience of a more romantic and refined era.

THE JOURNEY TODAY While, sadly, it is not possible to perfectly trace the original route of the Arlberg Orient express, it is eminently doable to come quite close. Today, a well-heeled and intrepid traveling anorak can step aboard the carriages of the Venice Simplon Orient-Express in Paris (or London if they must) and travel in inimitable style to Venice. From Venice, it is only a short two-hour flight to Athens. Travelers who are not spending any holiday time in Venice are advised to plan carefully, because there are only seven flights per week from Venice to Athens. The Paris-to-Venice leg of the train trip costs EUR €1,955 (USD $2,610) and will take two days and one night, while a one-way first-class ticket from Venice to Athens has a price of EUR €600 (USD $800).

LEGAL REQUIREMENTS AND TAXATION FOR PROPERTY OWNERS AND INVESTORS A new law, effective January 1, 2014, is the Unified Tax on Property Ownership (ENFIA), which will charge between EUR €2 (USD $2,67) and EUR €13 (USD $17.35) a square metre. This is slightly less than the previous rate. Property owners pay a real estate property tax (FAP) between .1% and 1% of the official property value. There is an additional tax of EUR €1 (USD $1.33) per square metre for the land plot. Capital gains tax is 15%. Property transfer tax, paid by the buyer, has been decreased from 10% to 3%.

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Attorney/Notary fees will total between 2% and 3% of the purchase price. The attorney will help investors obtain a Greek tax number (AFM) and a Greek bank account, which are both necessary to purchase real estate. In addition, the Greek government needs proof of the source of funds for the bank account, or the incoming funds will be considered as taxable income. Most property will be sold with a certificate of ownership, a listing on the land registry, and a certificate from a civil engineer attesting to adherence to building codes and energy emission guidelines. The so-called “Golden Visa” offers residency to non-European Union investors who purchase or offer to let property worth over EUR €250,000 (USD $333,679). The residency plan is valid for five years and is renewable.

A RED-FACED GREEK GOVERNMENT “I… corrected mistakes which you haven’t even seen, affecting almost two million people.” ~Greek Finance Minister Gikas Hardouvelis

As of early August 2014, the property tax situation in Greece could only be described as chaotic. Errors in the system that computes the ENFIA created tax bills that had property owners paying up to 10 times more than they did before the recent overhaul at the beginning of year. Even buildings still under construction were charged at the full rate. Under the Greek system, tax obligations are included as part of the electric bill, which in effect means that property owners can have their electricity turned off if they do not pay their taxes. As a temporary solution, Greek Prime Minister

Antonis Samaras has decreed that the value of real estate is to be in line with the regulations that were applicable last year. In addition, it has been announced that the payment of the first installment of the ENFIA property tax will be delayed by at least a month, so that mistakes may be corrected in the necessary adjustments can be made.

APPROACHING SEVEN YEARS OF DECLINES “For (those) who want to buy a holiday home or a plot to develop for business, it’s a golden opportunity.”

~Stratos Paravias, President of the Hellenic Property Federation (Pomida)

Home ownership in Greece sits at nearly 87%, the highest in the European Union, but over a third of property owners are unable to meet their tax obligations. One in three are also unable to keep up with mortgage payments and fear impending confiscation, while four out of ten Greek citizens said in a recent poll that they would voluntarily turn their properties over to the state if it would ensure relief from future payments. According to some estimates, the tax burden has increased sevenfold in the last two years, and this has inspired a type of gallows humor among Greek property owners-- if you want to punish your children, pass your property on to them, says a current joke. According to the Bank of Greece, the price of apartments in the capital of Athens fell by almost 11% in 2013 YOY from 2012. In 4Q 2013, Athens house prices plunged by almost 4.23%. These declines are part of a several-year trend – 2008 (-.77%), 2009 (-4.21%), 2010 (-5.83%), 2011 (-8.0%), and 2012 (-12.91%). The pattern continues, because as of late May 2014, it is estimated that house prices have decreased by 7.5% so far this year.The value of both older and newer homes fell at almost identical rates. Apartment prices went down by 10.6% in Athens, 7.4% in Thessaloniki, 5.3% and other large Greek cities, and just under 4% in other regions of the country in the first part of 2014. This was after larger declines in 2013 – 11.9%, 8.8%, 10.1%, and 7.9%, respectively. According to the European Union’s statistics agency, Euro-

stat, Greece has endured the second-steepest decline in home prices after Croatia.

Rental Information

A BOOM IN FOREIGN OWNERSHIP?

Apartment Purchase Price, City Centre, per sq. m.

It is most definitely a buyer’s market – some estimates purport that there are half a million property owners who want to sell, and across all of Greece, there are about 300,000 vacated residences. Says Manolis Akalestos, head of the Scopas Estate’s Agency on the island of Paros: “In 2013, I had my best year yet, with 90% of all sales being made to people overseas. Before, property prices were incredibly inflated… and foreigners took a step back. Now that prices have come down and returned to natural levels, they are coming back with a vengeance.” After years of decline and deficit, the Greek economy is poised for a slight comeback in 2014, with a projected growth of .6%, and the same factor that is driving that recovery– Greek tourism – is also presenting a target for investing for foreign property buyers. Many foreign property investors are looking for hotels to take advantage of the increased tourism. The preference seems to be hotel units purchased from banks, but when there are none available, investors look for individual owner sales, especially on the islands of the Mykonos, Santorini, Crete and Rhodes.

GUARDED OPTIMISM It was only a short time ago that the countries of Ireland and Spain were facing the same economic woes currently happening in Greece, and yet now they are successfully recovering. This fact gives a number of investors the hopeful outlook that a similar recovery will occur in other European countries that were hurt by the crisis. They are taking the long look by buying now, when prices are so low, and hoping for better things to come. “They buy only when the price is extremely low, usually 40% below the already-low value of each property. Their aim is to reduce the investment risk they take by entering the Greek market. This is why they seek out distressed sales, which offer high yield due to the low price paid.”

~Giorgos Kambouropoulos, head of the Greek branch of the Urban Land Institute

Greek Mainland

Athens - EUR €1,530 (USD $2,037) Thessaloniki - EUR €1,963 (USD $2,613)

Apartment Purchase Price, outside of City Centre, per sq. m. Athens - EUR €1,880 (USD $2,503)

Monthly Rent, City Centre (1 Bedroom) Athens - EUR €268 (USD $359) (1 Bedroom) Thessaloniki - EUR €288 (USD $383) (3 Bedroom) Athens - EUR €474 (USD $631) (3 Bedroom) Thessaloniki - EUR €498 (USD $663)

Monthly Rent, outside of City Centre (1 Bedroom) Athens - EUR €285 (USD $379) (1 Bedroom) Thessaloniki - EUR €236 (USD $314) (3 Bedroom) Athens - EUR €536 (USD $714) (3 Bedroom) Thessaloniki - EUR €397 (USD $528)

Greek Islands

Apartment Purchase Price, City Centre, per sq. m. Heraklion - EUR €2,433 (USD $3,239) Chalcis(Chalkida) - EUR €1,750 (USD $2,330) Chania - EUR €1,740 (USD $2,317) Rethymno - EUR €1,500 (USD $1,997)

Apartment Purchase Price, outside of City Centre, per sq. m. Heraklion - EUR €1,250 (USD $1,664) Chalcis(Chalkida) - EUR €1,650 (USD $2,197) Chania - EUR €1,600 (USD $2,130) Rethymno - EUR €1,197 (USD $1,593)

Monthly Rent, City Centre (1 Bedroom) Heraklion - EUR €284 (USD $378) (1 Bedroom) Chalcis(Chalkida) - EUR €250 (USD $333) (1 Bedroom) Chania - EUR €273 (USD $363) (1 Bedroom) Rethymno - EUR €450 (USD $599) (3 Bedroom) Heraklion - EUR €486 (USD $647) (3 Bedroom) Chalcis(Chalkida) - EUR €483 (USD $643) (3 Bedroom) Chania - EUR €404 (USD $538) (3 Bedroom) Rethymno - EUR €425 (USD $566)

Monthly Rent, outside of City Centre (1 Bedroom) Heraklion - EUR €247 (USD $329) (1 Bedroom) Chalcis(Chalkida) - EUR €183 (USD $243) (1 Bedroom) Chania - EUR €216 (USD $287) (1 Bedroom) Rethymno - EUR €250 (USD $333) (3 Bedroom) Heraklion - EUR €440 (USD $586) (3 Bedroom) Chalcis(Chalkida) - EUR €383 (USD $510) (3 Bedroom) Rethymno - EUR €358 (USD $476)

Gross Rental Yield, outside of City Centre Athens - 3.37% Thessaloniki - 3.99% Heraklion - 4.29% Chalcis(Chalkida) - 2.60% Chania - 2.84% Rethymno - 4.03%

Property Life News | Issue 13

urkey stands at the crossroads of Europe and Asia. As such, its culture is a mixture of the two, as reflected in the attire of those who crowded the platforms of Istanbul Gar in the 19th century. The old Orient Express reached this terminus after a journey that spanned the entirety of Europe. The station, more commonly known as Sirkeci station, was inaugurated in February 1888, and stands near Seraglio Point beneath the walls of Topkapı Palace, right next to Eminönü, its ferry docks and the Galata Bridge. In the 1880s Constantinople’s (as Istanbul was known) population stood at 9.7 million – today the vibrant and bustling city is home to 14.1 million people. During 2013, REIDIN (Emerging Markets Real Estate Information) reported that home prices rose strongly after a lackluster performance the past few years, logging growth of 17.11% in the year to January 2013. But for US and European buyers, the price increase was offset by the fall of the Turkish new lira, making the city even more attractive. Besides a moderate 5.05% rental yield, Turkish real estate became even more attractive in 2012 with the lifting of restrictions on foreign ownership. The latest move has seen increasing interest in real estate from Asian, European and Middle Eastern property investors. The result is that the PwC US and Urban Land Institute study titled “Emerging Trends in Real Estate 2014” named Istanbul as one of the top 10 investment choices amongst European cities. It takes only 10 hours and 20 minutes to fly from Changi to Turkey. PL

Istanbul Sunset Panorama Istanbul is the largest city in Turkey, constituting the country’s economic, cultural and historical heart.

TALKING TURKEY

The number of investable geographies has expanded globally as growth markets like China, Brazil and Turkey are attracting global investors together with an improvement in the quality and availability of retail assets, rising liquidity levels and further progress in real estate transparency, the retail investment sales sector is set for further rapid globalisation Arthur de Haast Head of International Capital Group, Jones Lang LaSalle

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If one had but a single glance to give the world, one should gaze on Istanbul. Alphonse de Lamartine, French writer, poet, and politician

ALL ABOARD FOR

ISTANBUL By Albert Fontenot

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ith over 14 million residents, Istanbul is the historical, cultural, and economic center of the nation of Turkey. Moreover, as the Turkish economy continues to evolve, Istanbul has become an increasingly prominent player on the world stage. Recognised as a Global City, Istanbul was designated a “European Capital of Culture” which was in 2010 noted for being one of the “fastest-growing metropolitan economies in the world," based on data compiled by the International Monetary Fund. As Istanbul goes, so goes the rest of Turkey, because the city generates more than 25% of the entire country’s gross domestic product. Istanbul received over 10 million visitors per year and was the sixth-most popular tourist destination in the world in 2013, partially because of its existence as a true transcontinental city,

located in both Europe and Asia. Some would say that the cultural center of Istanbul is in Asia, while the economic center is in Europe. Among European cities, Istanbul is behind only London and Paris for annual visitors. Because of its central location, reaching Istanbul is extremely simple. A first-class ticket from Singapore to Istanbul will cost approximately EUR €6000 with an average of 20 hours of travel time, with approximately 11 hours of flight time.That is roughly equivalent to the flight time from Seoul, Korea or from Tokyo, Japan. From London, a direct flight from London Heathrow to Istanbul Ataturk airport takes less than four hours, and from Paris, the flight takes just over three hours. New arrivals in Istanbul will find no shortage of cultural sites and points of interest. Among the highlights are – the Hagia Sophia, built in 537 A.D., and at one time the largest cathedral in the world,

the iconic Blue Mosque, with its 20,000 blue ceramic tiles and 200 stained-glass windows, Topkapi Palace, considered to be the oldest and largest palace in the world, and of course, the Grand Bazaar, which dates back to the 15th century and currently contains over 5,000 individual shops. The increase in Turkish tourism is the driving force behind the four-year long and continuing surge in the market for foreign property investment. In 2013, new rules were implemented that favour foreign buyers. These changes in the law, effective last October, now facilitate the approval process, which of course shortens the time it takes for buyers to get the title deeds to their properties. In some cases, property purchasers won’t even need approval. If a particular property was already approved after 5 May 2011, or if a new development already has an existing approval, the process is no longer necessary. Furthermore, visa/residency restrictions have been greatly reduced. In the past, foreign homeowners without a residency permit could only stay in Turkey a total of 90 days within any given 180 consecutive days. Under the new rules, citizens of other countries are now awarded a shortterm residency permit of one year when they are

purchasing property in Turkey. This visa may be indefinitely extended as long as long as they remain the owner of the property. Finally, Turkey’s reciprocity law was relaxed in 2012, and this relaxation has opened the door to foreign buyers from countries other than Europe, including the Middle East. Data seems to indicate that the Nisantasi and Bebek districts, located on the “European Side” of the city and Basdat Street, on the “Asian Side” are of keen interest to wealthy Gulf buyers. Investors from the Middle East attempting to target “buy-to-let” opportunities within residential developments are focusing on the suburbs, specifically Esenyurt, Arnavutkoy, Sariyer, Beylikduzu and Bahcesehir. Approximately 1% of all unit sales in Turkey involve foreign interests, accounting for 12,181 units. The majority of property purchases by foreign parties are mainly done by Germans, who are responsible for 51%, followed by the British, the Greeks, and the Austrians, at 10%, 10%, and 5%, respectively. The rest of the countries combined make up the last 24%. As of 2013, the home price index showed an increase of 41% since 2010. Furthermore, according to the Turkish government, between January and

Property Life News | Issue 13

April of 2014, foreign investors purchased over EUR €938 million (USD $1,244 million) worth of real estate in Turkey, a 42% increase over the same period in 2013. These astronomical numbers follow a trend that has been going on for a decade and a half. Between the years 2000 and 2005, the average share of new house sales, rental and business activities, construction and real estate as part of the total Gross Domestic Product saw an increase of 16.7%, this was followed between the years 2006 through 2009, where the increase was 20.5%. In a recent survey of 200 world business leaders about the possibilities within the Turkish market, 71% opined that the countries investment attractiveness has grown considerably during the most recent three-year period. The global economic situation aside, over 50% of those who responded stated that they intend to do business in Turkey within the next year. Overall, over 80% expect further improvements in the attractive viability of investing in Turkey, the second-highest percentage among major emerging markets. More telling, only 38% expect conditions elsewhere in Europe to improve. In fact, the economy of Turkey is actually in much better shape than many of its European

neighbors. For example, Turkey, a debt-to-GDP ratio is a low 33% and the account deficit is lessening. In comparison, Spain has a debt-to-GDP ratio of 120% and France languishes at 110%. In 2013, it was predicted by the International Monetary Fund that Turkey would realise 3.8% growth, and Turkey actually surpassed that by reaching the 4% threshold. In particular, the city of Istanbul has seen property price grow by more than 20% just within the last year, and that number is a 6.2% upswing that is ahead of the national average of 13.8%. As of July 2014, an apartment in the city centre can be purchased for an average of EUR €1,764.59 (USD $2,341) per square metre, with a wide range that varies from EUR €1,420.01 (USD $1,883) to EUR €2,307.51 (USD $3,060). Outside of centre, average prices drop to an average of EUR €784.54 (USD $1,040) per square metre, with a low-to-high variance of EUR €532.50 (USD $706) to EUR €1,065.01 (USD $1,412). An apartment in the centre has a rental price ranging from EUR €319 (USD $423)-€532 (USD $705) per month for a one-bedroom, and between EUR €532 (USD $705) and EUR €1,000 (USD $1,326) for a three-bedroom, with averages being EUR €399 (USD $529) and EUR €747,

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(USD $990) respectively. An apartment outside of the city centre rents for between EUR €177.50 (USD $235) and EUR €532.50 (USD $706) per month, with averages of EUR €222.30 (USD $295) and EUR €406.09 (USD $538). Compared to many other European countries, the nation of Turkey has a low price-to-rent ratio of 20 years. On the other end, the United Kingdom has a price-to rent-ratio of 48 years, Greece- 35 years, France-28 years, Italy-26 years and Germany -23 years. Istanbul will generate a Gross Rental Yield of approximately 5.03% in the City Centre and 6.22% elsewhere. This GRY actually outperforms that of London (3.83% and 4.18%), Singapore (3.93% and 4.15%), Berlin (4.33% and 5.09%), Athens (3.83% and 3.36%), Seoul (2.64% and 3.71%), and Paris (2.71% and 2.86%). However, the GYR is a bit less than New York City (6.23% and 7.93%). Adil Yaman, Investment Director of Universal 21, said: “There are several factors contributing to the rise in property prices in Turkey and Istanbul in particular. Much is made of foreign investment and there is little doubt that more and more foreign investors have been looking seriously at Turkey as a place to make a good return on property investment.” PL

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slands provide property investors with the opportunity to enjoy above average returns, as well as access to a lifestyle investment which allows an escape from the stress of city living. However, these investments need to be carefully considered. Although sun and sand are important selling points, there are other considerations that must be taken into account if the property investment is to perform as part of a balanced investment portfolio. For those in search of rental returns from their island style investment, the cyclical nature of tourism is one of the most important considerations. Given that tourists will usually only visit (and rent) during peak seasons, how does the investor balance the requirements of income generation with their own particular requirements for a holiday haven? Other considerations include ease of access and the proximity of transportation hubs and the infrastructure on the island. In some instances, an island investment destination meets many of the criteria that contribute towards successful investment, but foreign ownership is either restricted or the process of making the purchase is convoluted and overcoming legal or legislative challenges requires the assistance of skilled local partners. Very few island destinations manage to tick all the boxes, but there are a few that meet the criteria for an exceptional property investment. In this section of Property Life we take a look at some of the most attractive up and coming island property destinations in the world. PL

ISLANDS IN THE SUN Can an island property investment deliver great returns?

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A PROPERTY IN PARADISE How Cape Verde has become an Investment hotspot.

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ape Verde, a picturesque archipelago of ten small islands off the west coast of Africa, is quickly developing into not only one of the most popular tourist destinations in the Atlantic, but also an increasingly sought after property investment destination. Sun seekers have increasingly been drawn to the islands due to their reputation as the ‘European Caribbean’ due to the year round sunshine, pristine sandy beaches, unspoiled natural environment and a fascinating mix of creole cultures and cuisine. This is a country offers an escape from the increasingly crowded traditional tourist destinations. Those investing in property are also drawn to Cape Verde’s ‘Old World’ charm and the welcoming nature of the locals. Property Life spoke to Luis da Silva, an international property investment broker about the increasing popularity of Cape Verde as a property investment destination. Mr da Silva’s relationship with Cape Verde goes back to the 1970’s, when he first visited the relatively undeveloped island chain. On his return in 2004 he realised the investment potential of the islands and together with John Vollands, a real estate and marketing professional from the UK, formed a company to promote investment.

The company – InvestCV became the partner of choice for TUI, Europe’s largest tour operator and was soon providing continental clients with a selection of off-plan property investment opportunities. With over 19 years experience in the international property business between the two company directors, InvestCV has built a solid reputation among property developers and holiday home investors who wish to enter the fast growing Cape Verde market. “Our experience in Brazil, France, Bulgaria, Spain, China and the UK, has given us a solid understanding of emerging markets and Cape Verde is emerging as a mainstream investment opportunity,” says John Vollands, InvestCV Marketing Director. “In these markets the selection process is all important. When we select a property we perform exhaustive on the ground research, as well as aerial reconnaissance. We also place huge emphasis on using local partners. This gives our clients the peace of mind of knowing that we have personally performed the due diligence required for successful investment.”

GROWTH MARKET

The 15th century discoverers of Cape Verde, the Portuguese, described the islands upon their arrival in 1456 as “completely uninhabited.” Cape Verde’s strategic location in the Atlantic Ocean was tremendously attractive as it opened up the possibility of

new routes to markets in Africa and India in a world where inland trade routes were heavily taxed by Islamic and Turkish traders. After gaining independence in 1975, Cape Verde faced challenging times in establishing itself as a stable soverign state, however, today Cape Verde is an African success story. This success is largely due to a democratically elected goverment that is eager to reap the rewards of a structured foreign investment and tourism programme. “In 1975, our GDP per capita was barely $200 (US dollars) and the perception of the world toward Cape Verde was that we would never be a nation,” says Cristina Duarte, Minister of Finance. “But we have come a very long way. And we have just one secret; a commitment to the country and a shared vision for the future.” In 2008 Cape Verde was upgraded from a low-income to a middle-income country, and is currently rolling out a number of social and economic policies to further improve the lives of its 500,000 citizens. The archipelago become somewhat of a transportation hub, due to its four international airports (the island of Sal has one of the largest international airports in the mid-atlantic region) and an enlightened ‘Open Skies’ policy. This policy allows access to European and American air space and Cape Verde is now the weekly transit point for a total of 40 direct flights from Boston, Holland, Germany, Italy, England,

Portugal, Sweden, Finland, Belgium, and Czech Republic.

UNIQUE EXPERIENCE

Each of the islands in the archipelago has its own unique character. The islands to the west (specifically Saint Antao, Saint Vincent, Saint Nicolau and Santiago) offer luscious green valleys where bananas, papayas and vegetables are grown for national consumption, while the islands on the eastern side (Sal, Boa Vista and Maio) provide Cape Verde’s world renowned pristine white sandy beaches boasting ideal watersports conditions and newly built tourist resorts. “Every island offers a unique experience,” says Humberto Santos de Brito, Minister of Tourism, Industry and Energy. “Indeed, there are very few places in the world as unspoilt as Cape Verde.” If the Minister and the government have their way, Cape Verde will remain an unspoiled gem – he has been quoted in numerous occasions stressing that the islands are committed to being “sustainable tourism destination.” The natural environment is complimented by the welcoming nature of the people of Cape Verde. Most Cape Verdeans view themselves as “world citizens” due to the multicultural nature of island society. A prime example is the town of Santa Maria, on the island of Sal, where around 43 different nationalities live and work together in one of the country’s tourism hotspots.

Baía das Gatas São Vicente

Property Life News | Issue 13

THE ASIAN CONNECTION

Interestingly an estimated 200 Chinese shops can now be found in Cape Verde, concentrated on the islands of Santiago and Sao Vicente. Reliable statistics on the number of Chinese in Cape Verde are hard to come by, but a Cape Verdean official estimates that as many as 2,300 Chinese nationals now live there “in one way or another.” This is a large number, considering the country’s small population. It is estimated that the Chinese community is second in size only to the Portuguese. The Cape Verde government is aware of the potential for Asian tourism, as well as investment. In 2012, China became number one on the list of the world’s largest consumers of tourism, with approximately 83 million Chinese travelling the world. According to Ambassador Su Jian, in October 2007 China and Cape Verde signed a memorandum to ‘Level the Tourism Cooperation’, which culminated in the inclusion of Cape Verde in the list of tourist destinations recommended by Beijing.

PRISTINE WATERS

Since hosting the Windsurfing World Championships in 2007, Cape Verde has also gained world wide recognition as a watersports destination. Windsurfing, kitesurfing, sailing and diving are all popular tourist pastimes. Crystal clear waters and favourable tides combine with natural rock formations to provide some of the best surfing on the Atlantic. For divers, humpback whales, dolphins and loggerhead turtles, coral reefs teeming with life, volcanic caverns and wrecks to explore are only some of the highlights of a dive into these pristine waters. The government is actively promoting Cape

investment is crucial for the islands, and noted that in November of last year the government rationalised and reviewed the fiscal system to create incentives for investors from all sectors. The country’s banking sector has also seen significant modernisation and growth in the last ten years enabling it to largely escape the worst effects of the financial and banking crisis. The central government is not resting on its laurels as regards updating infrastructure. A strategic project for the government of Cape Verde is the modernisation of the port of Mindelo, Sao Vicente. ESAPOR – the company that controls the Cape Verdean ports – and the government are seeking partners in China for this project. Plans include a new cruise ship terminal as part of the government’s commitment to keeping sustainable tourism as one of its core focus areas. With regard to investment, some challenges do exist. Beauracracy and the language barrier can be confusing for first time buyers but with help of a reputable investment advisor with local partners property purchase can be by and large a stress free experience. Luis da Silva of InvestCV is bullish about the property market on the Islands, “Cape Verde is experiencing increased interest from property buyers in both Europe and Asia and we believe that timeous investment will pay dividends not only in strictly monetary terms but also in enjoyment of a lifestyle destination that is growing enormously in popularity. I spend many months of every year on the islands for both business and pleasure and I would encourage property investors to visit and view the exceptional world class developments being built on Cape Verde.” PL

CAPE VERDE IS EXPERIENCING INCREASED INTEREST FROM PROPERTY BUYERS IN BOTH EUROPE AND ASIA Verde’s pristine marine environment in order to attract investment and tourism while at the same time it is also keen to promote Cape Verde’s cultural and musical heritage. Annual music festivals on the beach, as well as poetry readings, and locally made film screenings are a regular occurence throughout the country.

THE FUTURE

Jose Armano Duarte, President of the Cape Verde Investment Authority, believes that the country is well prepared to meet the challenges of the future. “Given its location in the world, the main goal is for Cape Verde to be an ideal investment, transport and tourism hub by 2030.” He also admitted that direct foreign

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Sao Felipe Rooftop overlooking the city of Sao Felipe in Fogo, Cape Verde

Bay of Faja D’Agua in Brava, Cabo Verde

JUST THE FACTS

WHY CAPE VERDE? TOURISM GROWTH ▶ According to the World Travel & Tourism Council (WTTC), the direct contribution of Travel & Tourism to GDP was CVE 23.9bn (15.3% of total GDP) in 2012, and was forecast to rise by 5.2% in 2013, and to rise by 6.8%p.a., from 2013 to 2023. ▶ Travel & Tourism investment in 2012 was CVE 19.3bn (18.1% of total investment). It was expected to grow by 15.7% in 2013 and rise to CVE 47.9bn in 2023 (27.2% of total investment). ▶ Tourism has been the main source of growth, with visitor numbers increasing by 268% between 2000 and 2012 (22.3% annual growth) ▶ The WTTC (World Trade and Tourism Council), has ranked Cape Verde as the world’s fourth-fastest growing tourist destination, for the period 2010 – 2019. Lonely Planet ranked Cape Verde at no.3 on their top 10 places to visit in 2011 Europe’s closest tropical islands. ▶ Europe – ideal holiday climate with long white fine sandy beaches and a crystal clear turquoise sea. CV is a year-round holiday destination, peak season is Nov– Apr when it attracts tourists from cold countries in Europe. ▶ In 2005, Cape Verde enjoyed 26.1% tourism growth with 199,000 visitors. In 2010, this figure had doubled to over 400,000.

FINANCIAL STABILITY & FDI ▶ The absence of exchange-rate risk, given the pegging of the Cape Verdean escudo (CVE) to the euro. ▶ Significant growth in FDI, totalling 1.148 billion in 2007, a 3,000% increase over four years (approx. 750% per annum) and now 3.3 billion.

REAL ESTATE INVESTMENT MARKET – PROMISING HEALTHY CAPITAL GROWTH ▶ A genuine relatively unknown virgin property market with all the boxes ticked for excellent capital growth. ▶ 2004-07 were the boom years in CV with increases of as much as 20-30% p/a in property values & 40% inland. Even during

the economic downturn, one developer alone was selling on average 20 units a month in Sal. ▶ While there is never a guarantee as to future growth, consensus is that property in CV hit rock bottom prices in 2008, with a rise seen from 2011-13 by 10-20% per annum, bringing prices in line with worldwide comparables. ▶ Very high level of investment in infrastructure, property development and business – private and public, national and international, further airport expansion, new roads, utility infrastructure, port expansions, new fast ferry service linking the islands and various new hotels – in the last 6 years. ▶ Lower risk than many similar property markets, and much more evolved than comparable markets (the existence of multiple options among mortgage providers is one example).

SPECIALIST TOURISM ▶ Year-round holiday season within 4hrs of Europe, with particular emphasis on winter-sun destination for Northern European visitors. ▶ World-renowned watersport conditions, especially for wind surfing and kite surfing. The incredible white sandy beaches are a huge draw for tourism. ▶ Also available are nature trekking tours, bird spotting tours, eco-tourism tours, stargazing tours, world-class scuba diving and big-game fishing. ▶ International holiday client base. ▶ Appeal to broad demographic audience (young, old, family, single, couples etc.). ▶ At least one golf course is planned to be built on the island of Sal in the future.

POLITICALLY STABLE VISIONARY GOVERNMENT ▶ Being advised by the World Bank, UN, World Tourism Organisation (WTO) and International Monetary Fund (IMF) – among others. Promotion to a middle-income country from January 2008. Special status granted to Cape Verde in late 2007, affording the country similar

benefits to the autonomous regions of ▶ Madeira Azores and the Canaries and also allocating specific additional development aid.

STRONG ECONOMIC GROWTH ▶ Averaging at over 5% 2001-06, 7% in 2006 and consistent 4-6% to 2010. Continued economic growth since 1997. Increased in the fourth quarter of 2010 with double figures forecast going forward. ▶ Low inflation over the last 6yrs.

SAFE AND AFFORDABLE ▶ Socially very stable. No religious and/or political conflict or corruption. ▶ Diverse and unique culture – friendly, educated, welcoming and relaxed locals. ▶ Property is protected by national laws, ensuring the same rights for foreign investors as for national. ▶ Although some resorts properties are retailing at over EUR €1.5 million (USD $2 million), property can still be very affordable: studios from EUR €20,000 (USD $26,537), 2-bed apartments from EUR €60,000 (USD $79,616) and Villas from EUR €120,000, (USD $159,232) all within a 5-minute walk of a very good beach.

BIG PLAYERS ▶ An array of 5-star resorts, hotels, golf courses, marinas and casinos at various stages of planning and development. ▶ Sol Melia plan to take over operations of a 5-star resort to be built by The Resort Group on the island of Boa Vista within the next three years.

TAX INCENTIVES & MORTGAGES ▶ Tax incentives for both developers and investors including no taxes on profits, dividends and interest on loans. ▶ Fiscal benefits for foreign employees. eighty-five per cent LTV mortgages currently available, including construction mortgages and interest-only for limited periods. ▶ Cost of capital has fallen from around 1112% to about 7.5-8%.

CAPE VERDE TOP 10 PROPERTY PLAYS SAL - SANTA MARIA

• Most popular tourist resort in the country. • First destination for more than 50% of tourist arrivals. • Most established holiday and foreign tourist let market. • Most established tourism hotel market. • Watersports investment destination.

SAL - ANTÓNIO SOUZA

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• Area with greatest potential for growth within walking distance of Santa Maria. • Combination of small and mid-sized plots. • New established resorts. • Successful international hotel operators.

BOAVISTA - SANTA MONICA

• Most beautiful beach on the archipelago. • Infrastructure in the last 5 years has improved access to this area tremendously. • For the higher-risk investor - large projects, significant infrastructural investment, larger risks and payback periods.

BOAVISTA - SAL REI AND SURROUNDS

• Fastest-growing tourist market in Cape Verde. • Always ‘bubbling under’ in terms of real estate: traditional real estate with potential for improvement but pulled away by larger projects. • Closeness to airport.

SANTIAGO - PRAIA

• National capital and most important business centre. • Best long-term business rental market. • Santiago - São Francisco beach and surrounds. • Most beautiful beach close to an urban market in Cape Verde. • One of few potential locations which could easily target wealthy Cape Verdean clients.

SÃO VICENTE - MINDELO

• Cultural centre of the country. • Opportunity for hostels and small boutique hotel investments.

SÃO VICENTE - BAÍA DAS GATAS

• Unexplored jewel of a location with potential for small B&B and boutique hotel investments. • Some potential as an exclusive residential area for Mindelo expats. • Unique location because it its backdrop is a high mountain against an azure sea.

WILDCARD - SANTO ANTÃO

• One of the best chances of agricultural investments due to mountainous terrain and greatest abundance of water. • Accessibility issues may prove a decisive factor against.

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Property Life News | Issue 13

WELCOME TO PARADISE THE CARIBBEAN OPPORTUNITY

ccording to Knight Franks' Caribbean Prime Residential Insight 2014, the Caribbean property market felt the effects of the Global Financial Crisis acutely. However, 2013 was a watershed year, with sales volumes of luxury homes increasing. According to the report, prices on the smaller, more exclusive islands such as Mustique, Jumby Bay and St Barts have performed better than some of their neighbouring islands over the last six years. The larger markets, such as Barbados and the Bahamas, where residential and leisure development had been expanding rapidly in 2007-08, felt the effects of the crisis more strongly. Some islands have seen luxury prices fall by around 30% since 2007, but the rate of decline has slowed significantly in the last year. 2014 saw sales volumes increase, particularly in Barbados and the British Virgin Islands. Purchasers have started to see buying opportunities in the market as some vendors have adjusted their asking prices downwards, in response to the effect of the global financial crisis on market sentiment. Critical to this turnaround has been the renewed confidence amongst buyers from Europe and the US. There is evidence of higher disposable incomes in the mid-market with interest in the USD $2.5m-USD $4.5m price bracket strengthening, particularly amongst US buyers. The weak dollar has fuelled interest from buyers spending Euro. An increase in enquiries from Swedish, French and Eastern Europeans was particularly noticeable in 2013. A quick look at currency valuation trends tells us why. In 2010 a French buyer looking at purchasing a USD $2m property in Barbados would have paid EUR â&#x201A;Ź1.53m. In 2013, due to currency rates and price movements, the same property would cost the buyer closer to EUR â&#x201A;Ź1.26m. Despite the revived optimism, there remains a large inventory of properties on the market across the Caribbean. Those vendors or developers that want to sell need to price their offerings realistically as buyers are highly price sensitive.

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2013 marked a watershed for several markets with Barbados and the Bahamas in particular seeing sales volumes increase. Kate Everett-Allen Knight Frank International Residential Research

Nevis Peak Yet another example of the natural splendor of the Caribbean islands.

HELLO CITIZEN There can be no doubt that another factor has increased the attractions of Caribbean property. This is the possibility of earning economic citizenship on one of the island nations. Take for example two of the most wellknown of the Caribbean islands - St Kitts and Nevis, which together make up a single island-nation that combines a rich history with unsurpassed scenic beauty. The minimum required investment is USD $400,000, excluding government and third party fees. But for this investment, you are not only gaining residency and a path to citizenship. In the case of St. Kitts and Nevis, you immediately become a fully fledged citizen of one of the most secure tax havens on the planet, with all the rights and obligations that citizenship entails. It’s not just wealthy Americans who are interested in the Caribbean islands – Asian and East European investment in the region is rapidly increasing beyond the traditional trade and commerce. According to an Inter American Dialogue brief released in 2012, Chinese investors are on the lookout for new opportunities, amongst them real estate. In this article, we look at two of the most attractive options for those with an eye on Caribbean island property investment.

beaches combine to make the St. Kitts islands one of the most popular spots in the Caribbean. Christopher Columbus first passed by St. Kitts in 1493, when it was populated with native tribes, but the Europeans didn’t colonise until the British arrived in 1623. Its strategic location and valuable sugar trade led to rapid colonisation and that tradition continues today as property investment attracts the attention of buyers from across the globe. With a promise of providing applicants with an international passport in only 4 months, while other nations offer a path to citizenship that can be measured in years, St. Kitts and Nevis’s Citizenship Investment Programme offers a significantly different value proposition. Established in 1984, this is the world’s oldest economic investmentbased program. The government promises no revocation of citizenship irrespective of

ST. KITTS AND NEVIS: Fabulous natural beauty, a great climate, warm waters, and pristine white sandy

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future changes in administration. It is obtained via a minimum investment in real estate of USD $400,000 in a governmentapproved project or through a financial contribution to the island’s Sugar Industry Diversification Foundation. The passport, which is valid for ten years, opens the door to 125 countries. Prior to the global real estate crisis, St. Kitts enjoyed 5-10% increases in home values, but in 2010, the country suffered from an average 20% drop in home prices for units worth between USD $600,000 and USD$1.2 million. Current home prices range from USD $550,000 to USD $850,000, according to the Global Property Guide. Once again, The Knight Frank Prime Residential Insight 2014 paints a picture of improving fortunes for the Island nation, with British, American and Canadian buyers once more entering the market in numbers.

BASSETERRE, ST KITTS Basseterre is the capital of the island of St Kitts, one of the Leeward Islands in the West Indies.

Antigua Bay View from Shirely Heights, Antigua, West Indies, Caribbean

ANTIGUA AND BARBUDA:

Antigua and Barbuda are two of the most exotic islands in the Eastern Caribbean, each offering a distinctly different experience to both tourists and those in search of property. Antigua, the bigger of the two islands, houses the nation’s capital, St. John’s and boasts an intriguing charm with its rugged interior and 365 stunning beaches. Barbuda, the smaller island, is an eco-lover’s paradise, secluded and untouched. Antigua and Barbuda’s Economic Citizenship Programme Act of 2012 opened the door of citizenship to foreign investors who purchase USD $400,000 in real estate, contribute USD $250,000 to the National Development Fund, donate USD$250,000 to an approved charity or invest USD $1.5 million in a local business. It became the third sovereign state in the Caribbean to grant citizenship-by-investment after Dominica and St Kitts and Nevis. It is similar to the offering of those two islands, except applicants must submit to an interview and are required to spend at least 70 days in the country during a five-year period upon acquiring Antiguan nationality. According to Global Property Guide, house prices have remained static despite a slight economic recovery that began in 2010. The latest Knight Frank Prime Residential Insight 2014, however, gives property investors hope that an upward trend in sales volumes at least may be on the horizon. A two-bedroom house costs an average of USD $350,000 and a three-bedroom unit USD $600,000. PL

SOME CONSIDERATIONS PRIOR TO PURCHASE IN THE CARIBBEAN: WHERE TO BUY? • Become familiar with the entire island, not just your corner of paradise. If you’re buying to enjoy a second home make sure that you are going to be within easy reach of the amenities. • Ease of access – Can you get to your island paradise easily and safely. Is there a nearby airport and if not, is access easily arranged? • Think about your island lifestyle. There are both advantages and disadvantages to buying a property in an isolated area or in a community. • Properties need to be loved and used. As those who call Southeast Asia home know, a neglected property can get damp and musty - and nature has a way of wanting to reclaim your home. A property management company and a reputable security firm are both essential. • Consider a well-managed hotel development or a managed estate. Many offer full services and some may even handle rentals on your behalf. WHY ARE YOU BUYING • Do you want something which can attract rental income? As usual, location is the name of the game. Prior to purchase, have a look at tourism numbers and seasonal variations. • Portfolio or pension investment? Are you considering a long-term purchase or is short-term capital appreciation more important? • If it’s a retirement or long-term residential option, remember that location of schools and medical facilities may be extremely important. And always keep in mind… • Sound research can mean the difference between a great investment or a miserable experience. To buy on most of the Caribbean islands an Alien Landholder’s Licence is required. Stamp duty can add significantly to the purchase price – make sure that you factor this in. • One of the most important ways that you can make your property purchase easier is to find reputable local legal advice on both purchase and immigration. In many instances, a real estate agent can help. • You will need to check on matters which affect your tax status in your country of origin. This includes basics like inheritance tax, capital gains tax, and other local issues such as undeveloped land tax, etc. • Do you want to buy with cash or finance your property? Mortgages in the Caribbean are expensive with high current interest rates. It may be cheaper to remortgage at home (and could be as much as 10% cheaper) and still buy with cash. Property Life News | Issue 13

Another Country One of the perks of being a freelance journalist is not having to go into work every single day. This has been particularly useful in recent times for anyone living in parts of the UK that have been deluged by a welter of rain with which Noah may have been familiar.

My default couture setting for some weeks nowhas been neoprene; with a full dry suit on hand, just in case the weather turns really bad. While the strange looks directed at me a few weeks ago - as I waded down the high street in full scuba apparel - have abated, my local publican still complains that my fins are damaging his carpet. Occasionally, you might receive invitations that are to good to turn down, one of the benefits of being a freelance journalist. Was I interested in doing a piece on `second citizenship’? Maybe. Would I be interested in taking a trip to the Caribbean to find out what it was all about? That was never going to be a difficult question to answer.

pervades until the moment you leave. I’m struggling to think of a nicer, more relaxed place I’ve been to or spent time in. To delve into themodern vernacular; it’s wickedly cool.

Down to Business, as Usual But I wasn’t there for a holiday, regrettably. I was there in the spirit of investigative journalism having been informed of the fact that St. Kitts and Nevis operates the oldest ‘Economic Citizenship’ programme in the world, and it’s a programme that appears to be gaining both momentum and increased popularity. The natural questions to ask are; who would need a second citizenship, and why would they need one? After some research, and not a little thought, the answers came thick and fast.

Jewel in the Caribbean Sea St. Kitts and Nevis is the smallest sovereign state in the Americas. Situated in the Leeward Islands of the West Indies and close to the exotic-sounding St Bart’s, Antigua and Barbuda. It is, quite simply, a gorgeous place, boasting golden sandy beaches, lush tropical vegetation, and a couple of stunning peaks that look as though they want to be mountains when they grow up. Visually, the two islands that make up St. Kitts and Nevis are as arresting as anything you’ll see in a holiday brochure, but it’s the spirit of the place that makes it so special. From the moment you arrive at the Robert L Bradshaw international airport, everything seems to whisper a lilting “relax”. Even the immigration officers smile as you hand over your passport, and I can’t remember the last time something like that was tucked away in my file of pleasant experiences. There is something about the place that calms you down and slows your pace; even reduces the activity in your cynicism glands, and it

Mission Control We are living in uncertain times, whether we like it or not, being a citizen of a single country pretty much means that we are at the mercy of its government.The government has complete control of our lives and our assets. I read somewhere that governments have used citizenship as a “tool of economic enslavement”, which sounds somewhat melodramatic, but has more than a ring of truth to it when you consider the extent to which a government can control where we go, what we do, and how we spend our money. A second citizenship is now being viewed as an essential part of diversification in a world where the next government overthrow may be just around the corner, or where political turmoil and economic disaster are potential realities.

Diverse Appeal Any investment broker worth his or her salt will be keen to point out the need for diversification in any portfolio, and what could possibly be a

more logical next step than acquiring a second citizenship, with a second passport, to protect assets from governments whose vicissitudes can often lead to whimsical changes of legislation? St. Kitts and Nevis is politically stable, economically sound, and provides its citizens with exemptions from a wide variety of taxes, including foreign income, capital gains, wealth, gift, and inheritance. It’s a parliamentary democracy, based on the constitution and judiciary of the United Kingdom, and already has more than 30 years’ experience in operating its citizenship programme. It appears to have become the best established and most respected in the world – something that hasn’t escaped the attention of neighbouring countries.

ECI Wealth is on hand – to guide clients, actual and potential, through the process of achieving a second nationality. The rules and regulations are too complex to go into, but the bottom line is that for around $400,000, an individual can open up the world. A St. Kitts and Nevis passport offers visa-free travel to almost 140 countries worldwide, and a level of acceptance in those countries that may previously have been but a dream.

Learning Curve It’s also worth mentioning all the possibilities in the world of education.

Passport to Heaven So far so good then, although I have to confess that I’d rather be talking about the flora and fauna on a lush tropical island than asset protection and tax exemptions – which is fabulously diverse and spectacular, by the way. Having established why an individual would seek a second passport, it’s now appropriate to talk about the ways in which one can be obtained. Popping into a St. Kitts and Nevis embassy in a country of your choice and filling in a form, isn’t going to work.

Opportunity Cost There is, not surprisingly, a price to pay, and while you don’t have to be a billionaire, a certain amount of substance will be required. There are a number of ways to secure citizenship of St. Kitts and Nevis, but by far the most logical seems to be through investment in property, and this is where my hosts come into the equation. ECI Wealth, along with its associate companies, are developing areas on Nevis – building luxury residences on hillside and by shoreline – and with the investment comes a second passport and citizenship of a British Commonwealth country. The Citizen by Investment programme offered by St. Kitts and Nevis has brought with it a controlled and regulated construction boom on the islands, which appears to be working to the benefit of all concerned. ECI is in the process of putting together its Nevis Hill Club, which is set to provide the levels of understated luxury that investors require – whether they intend to live on the island, or merely treat their residence as a holiday home or pied a terre. I have always imagined owning a home on a Caribbean island. To me, it’s right up there with having a luxury yacht, and travelling around the world in a private jet. Let’s face it, the Citizenship by Investment programme is designed for a global elite, and even members of that rarefied group will not be able to fulfil all the necessary criteria for acceptance. The programme is designed for special people, in special circumstances, and that is one of the reasons

For St. Kitts and Nevis passport holders – both for individuals and their children – they are almost limitless. Access to top schools, colleges and universities around the world is something many of us take for granted. A second citizenship can turn those “dreaming spires” into reality. Add to that a superbly appointed residence on a beautiful tropical island, and you’ve got an investment option with considerable cachet and a diversification aspect that ticks plenty of boxes. It’s interesting to note that Canada has recently closed down its ‘Immigrant Investor Program’ – a move that is currently reverberating around the world of would-be economic immigrants, particularly in China. Other countries have taken note, and while questioning the decision of the Canadian government, are perceiving opportunities.

Such Sweet Sorrow Three days on St. Kitts and Nevis was never going to be enough – it’s a place you will want to come back to again and again. Just when the stress elements in my mind and body had been dispelled – left on a beach somewhere on Nevis, waiting to be taken up by the ebbing azure waters of the Caribbean Sea – it was time to leave. Calm and refreshed as I was though, I couldn’t help reflecting on the ever-changing world in which we live, and the apparent simplicity of an investment programme that opens up the world for those fortunate enough (in every sense) to qualify. Holding my UK passport with increased tightness and no small amount of affection, I realised the extent to which I have taken visafree and no-hassle travel around the world for granted. Asset protection and tax exemptionsare not matters I tend to concern myself with, but that’s certainly not the case for everyone.

info@eciwealth.com, Tel: +971 4432 5173 ECI Wealth Limited, St. Kitts and Nevis Office, Unit A3 The Sands Complex, George Street, Basseterre.

LOMBOK PROPERTY INVESTMENT

sia’s new tourism hotspot, the Indonesian island destination, Lombok, may be about to give its rival Bali a run for its money in terms of tourism. With a brand new, sparkling international airport and over 300 weekly flights direct from Singapore, Kuala Lumpur, Perth, and multiple connections via Bali, tourism numbers are strong and growing month on month. It’s not just tourists that are flocking to Lombok, property investors are taking a real interest in the fast-evolving market on the island-paradise. Of course, with the tourism numbers soaring, hotel investment is one of the focus areas for Asian and international property investors. This growing interest is fast transforming the formerly sleepy island into one of Southeast Asia’s most dynamic property marketplaces. In June 2014, the C-9 Hotel Group released an in-depth report on the potential of the destination as far as property investment is concerned. For those interested in the prop-

erty market on Lombok, which many view as the next Bali, the C-9 report makes for very interesting reading. In the interests of transparency, Property Life would like to acknowledge that much of the information in this article is sourced from that report. The report was authored by Bill Barnett, who is the Founder and Managing Director of C9 Hotelworks. The firm is a leading hospitality and real estate consulting firm based in Thailand. In the report, the section detailing the current status of Bali, outlines some of the pressures that exist in that market. Over the last 5 years the premier South Bali condo market has been growing at an incredible rate with domestic Indonesian buyers responsible for an estimated 80% of real estate transactions. Motivation has been two-fold with unit owner holiday usage in hospitality-led residential projected and termed guarantee return offerings driving market sales absorption. Over the past twelve months, traction in these types of projects is decid-

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edly slowing as concern grows about hotel oversupply and rolling back of return programmes to actual performance levels. Some other concerns about the transition from an emerging to a mature leisure market across the Asian region include: • High leveraging of the domestic buyer segment. • Shift of hotel-branded demand from resort to urban products and locations. • Downward pressure on unit sizing and price. • Changing composition of geographic source markets. • Key tiers of sales activity at entry-level and top-end with decided gap at midscale. • Lack of financing and ownership restriction for foreign purchasers.

A TROUBLED HISTORY The report summation of the history of property investment in Lombok neatly encapsulates just why Lombok is becoming a

LOMBOK'S BEACHES ARE SECOND TO NONE AND A BLESSED RELIEF AFTER BALI'S BUSY STRIPS. Time Magazine Five Reasons to Visit Lombok, Indonesia current focus of investment activity. In the period after the Bali bombings, with tourism gearing up in South Bali, Lombok failed to capture the imagination of investors. Perhaps the biggest setback at the time was the well-publicised mega tourism development joint venture between BTDC and a Middle-East consortium led by Dubai’s Emaar Properties. In what had been planned to be a leading destination resort with international hotels, a marina and residential developments, but was hit hard by the aftereffects of the GFC.

During this time, most retail property sales were on land parcel subdivision deals to individual buyers and a few foreign-led developments which failed to complete. Investment sentiment was also impacted due to tension in local estate trades where resentment of locals over projects which have failed to materialise.

A BRIGHT FUTURE In the last 12 months, things have begun to look up for the Lombok market, driven in part by the sale of fifty resort-managed villas at

the Royal Kamuela by the Latitude 8.1 Group. Priced well below the inflated levels of South Bali, most units were transacted to institutional investors. At the same time, new offerings in the planning stages such as BASK Gili Meno have created positive international public relations coups overseas. The Big Two – Phuket and Bali –have proved that tourism paves the way for real estate development and investment. The creation of a destination brand is created by loyal returning holiday visitors. This remains a key underlying fundamental across Asia and is often overlooked in the day and age of “property focused” developers. Given the infancy of the Lombok cycle, most real estate players are still working with a moving target on profiling the buying segments. Bali, as stated previously, is heavily dependent on Indonesian buyers from Jakarta, Surabaya and other domestic locations. Whereas, the guest profile for Lombok’s hotels is fairly slanted toward markets such as Australia and other regional locations. It

Property Life News | Issue 13

should be fairly obvious that an emerging and maturing property market like Lombok is both an attractive opportunity for investors, as well as providing some risk – even if only marginal in terms of its competition for visitors with the other ‘Big Two’ – Bali and Phuket. The C-9 report also indicated a connection between the nationality of a developer and the major purchasing segments. It’s likely that the buying profile for Lombok will be connected to who are developing the products in the future.

CYCLIC DEVELOPMENT According to author of the C-9 report, Bill Barnett, Lombok’s development cycle will likely be underpinned by both tourism and domestic investment. If the examples of Bali and Phuket are any indication, there can be very little disagreement with this point of view. As stated at the beginning of this article, the growing numbers of tourists and increasing flights into the new international airport will fuel the property market. Barnett also notes that South Lombok and the intended destination resorts are long-term strong demand generators for real estate. But what has to be remembered is that the Laguna Phuket mixed use project kicked off with its first hotel in 1987 and was followed by more hotels in 1991 and 1992. Only in 1993 did the first residential component appear with the Allamanda resort condominium, followed by the Sheraton Island Villas in 1995. Vacation ownership evolved as the property market in 1998 and the residential gated estate of Laguna Village only came under development in 2002. This is a full 15-year

cycle to go through investment-oriented properties to eventually move into a maturation process with primary residences. However, it should be noted that the development on Lombok is proceeding at an accelerated pace and that investor sentiment may be informed by the success of the Bali and Phuket models. It may be that the cyclic development of primary residences may be accelerated on Lombok due to sentiment based on the acceptance of the Bali and Phuket models. The report, however, does state that neither Phuket nor Bali should be directly compared to Lombok as far as the cycle for property development is concerned. Those two islands are Asia’s two dominant resort destinations with decades of hotel product, support infrastructure and experience. Both are now rapidly urbanising and will soon be fully fledged cities at the edge of a warm and welcoming ocean. Each of the islands, Bali, Phuket and Lombok offer different value propositions for investors. Looking at Lombok, it may be more instructive to make a comparison to Koh Samui given the boutique nature of the underlying accommodation markets, strong independent hotel offering and natural surroundings. At some point in the medium term, it is anticipated that Lombok may be able to outperform smaller competitors due to the development of that all important airport and ongoing public relations activities. It’s also interesting to note that Phuket and Bali may not be as attractive to certain classes of travellers as they once were. Whispers of the inappropriateness of certain beachside attractions on Phuket for those with families are becoming louder,

for instance. The unspoiled nature of Lombok is also an attraction for nature lovers and eco-sensitive tourists. It may very well be that Lombok avoids some the perceived problems of both Bali and Phuket.

HOTEL INVESTMENT Asian investors are focused on resort-style hotel branded residences at the moment, and for many, Lombok offers the opportunity to get in on the ground floor of an attractive investment opportunity. These investments rely on discretionary spending and combine attractive yields and lifestyle usage. According to the report, in the post financial crisis world, and shift to more Asian buyers, pricing is shrinking to the manageable levels of USD $75,000 to USD $200,000 band. The Banyan Tree Group’s June launch of a new hospitality-led residential brand, Cassia, is targeting this exact same pricing band in a number of the regions resort market. Nestled in a niche sector between hotel and apartment, Cassia offers oneand two-bedroom units with flexible living and dining options. Cassia has been created to bring together investment opportunities for the growing middle-class looking for affordable holiday homes as well as the opportunity to develop an innovative hotel product in the serviced apartment segment. Five projects are already in development in Phuket, Thailand; Bintan, Indonesia; Beruwala, Sri Lanka, Gold Coast, Australia and Lijiang, China. Interest has already been strong with 70% of Phuket and 45% of Bintan being sold in phase one. Since the tightening of property restrictions more Singaporean buyers purchase similar products and there is no reason to think that this trend is going fade any time in the short or medium term. Property cooling measures remain in place in Singapore and there is a growing taste for investment in overseas markets. With development on Lombok growing, Singaporeans are being offered even more regional choice as far as property investment - at the right price, and within easy reach of Changi International Airport. PL

A New Day The sun is rising on a new era where Lombok may compete directly with both Bali and Phuket for tourism generated revenue and property investment.

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LOMBOK TIME Developer T-ierra Bullish on Island Investment

ingapore’s T-ierra Group Pte Ltd is amongst the largest developers on Lombok and is in its final stages of developing the 5 star Sundancer Resort & Spa as part of a 50 hectare integrated resort project. The resort is on target to open in the first half year 2015 with hotel units available from USD $30,000. This price point and a growing tourism boom is attracting interest from investors across the globe. These investors, including property buyers from Southeast Asia are hoping that returns on an island that has been labelled ‘Asia’s Fastest Growing Tourist economy’ will mirror those on Phuket and Bali – the ‘Big Two’ islands in the region. Property Life [PL] spoke to Dave Jay, Director of Sales and Marketing [DJ] at T-ierra to get some insight into just why Lombok is attracting the attention of savvy island investors.

[PL] Many thanks for your time. Can you give the readers some insight into just why Lombok is attracting so much attention? [DJ] Thanks for the opportunity to explore the attractions of Lombok and our new development on the island. The serene and tranquil landscape of Lombok attracts visitors from all over the world for a number of reasons, including the unspoiled natural beauty and increasing accessibility due to the new airport. Having been featured amongst the most recommended places to visit by the likes of Lonely Planet, Lombok is firmly on the radar of traveller’s in search of an unspoiled tropical paradise. The Indonesian Government had marked Lombok as a tourism corridor in the country’s Economic Master Plan 2011 – 2015, giving it priority funding status for the development of infrastructure and facilities. One of the first concrete examples of that commitment is

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the Lombok International Airport. A clear sign that development on Lombok is a top priority is the launch of the USD $3 billion, 1.175 hectare Mandalika Resort. The project was developed by the Bali Tourism Development Corporation (BTDC), which developed the highly successful Nusa Dua (Nusa Dua is known as an enclave of large international 5-star resorts in southern part of Bali), back in 1978. The project is to be developed in three stages to include an F1 race track, an 18hole Jack Nicklaus golf course, integrated theme park, underwater marine museum, eco park, meeting spaces and a concert hall. Hotels will include Club Med and Marriott Vacations. [PL] Can investors draw any parallels between development and possible ROI on Lombok compared to Bali and Phuket?

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SUNDANCER PROJECT Beautiful 5 Star Resort in Lombok Indonesia

[DJ] I think that savvy investors can take their cue from the returns possible when investment takes place at the early stages of island and resort development. If you look at the last three decades those who invested in tourism growth cycles that begin from infancy stages have reaped the rewards. Lombok is definitely at that early stage right now. Phuket was at the forefront of the resort property push with the innovation of hotel managed private villas such as the Banyan Tree. Bali’s cycle was no different and being Lombok’s sister island, I think that investors can take their cue from that example. Bali’s land prices two decades ago were a fraction of what they are today and yet have continued to push upwards by extraordinary percentages for the past three years yet investment has continued unabated even in the face of ever increasing prices. [PL] Can you tell us why hotel investment on Lombok is so attractive? [DJ] During 2013 investment in the Asian hotel market reached USD $7.5 billion as investors turned their backs on the underperforming and restrictive residential markets. Hotel investments provide investors the unique opportunity to take advantage of tourism dollar inflows at low entry levels of investment – especially when compared to traditional real estate whilst providing much higher returns due to premium room rates hotels. The primary factors in choosing the right hotel investments are the average nightly room rates in the destination, the potential occupancy levels and consequently the supply and demand relationship. Current 5 star hotels in Lombok charge a premium of any-

The Sundancer Resort, which is due to open in the first half of 2015 features 66 spectacular and spacious one and two bedroom apartments.

where between USD $250 to USD $400 per night and are usually at 85% occupancy levels throughout the year. This is in part due to Lombok’s ever growing tourist arrivals made possible by the new international airport. These are only some of the reasons that investors in Lombok are enjoying what could be termed an early mover advantage in terms of potential returns on investment. The market is by no means saturated, whereas in the more mature markets of Bali and Phuket some hotels are slashing rates to compete for tourist dollars, leaving investors at a disadvantage. [PL] Give us a little insight into the 5 star Sundancer Resort? [DJ] The Sundancer project covers over 50 hectares of land and is segmented into the apartment hotels which are already at 90% complete and the private villa estate which is currently under development. The Sundancer Resort, which is due to open in the first half of 2015 features 66 spectacular and spacious one and two bedroom apartments. Each apartment is furnished to 5-star beach resort specifications and has a balcony that offers a stunning panoramic sea view. The Sundancer Resort is also a fully integrated resort project providing full amenities including a private beach and

jetty, tennis courts, a helipad, spas and, I’m happy to say currently the largest swimming pool in Lombok. [PL] If Lombok is growing at such a pace why would the investor choose Sundancer? [DJ] Apart from possessing world class 5-star facilities, the key feature that distinguishes Sundancer Resort from other hotels in Lombok is its room size and occupancy allowance. A typical 80 sqm one bedroom apartment in Sundance comprises of walkin wardrobes, Jacuzzi bathtubs, a kitchenette and living room with attached balcony. Occupancy allowance for those units is four persons, allowing for family and friends to book a single apartment as compared to having to book two hotel rooms and pay double the cost in a traditional hotel that allows occupancy for twin sharing only. As an investor, this is a critical feature in understanding how Sundancer has its edge over other 5 star hotels when charging its room rates and how this contributes to the high occupancy levels that Sundancer is targeted to achieve. Q6. How can Singaporeans Invest in Lombok’s Tourism Boom? From just USD30,000, T-ierra Group’s investment programme provides the unique opportunity to gain from Lombok’s booming tourist economy with an investment in the limited hotel units that Sundancer Resort has put up for sale. The investor is expected to earn a gradually increasing return on investment every year starting from the minimum guarantee of 8% up to the projected 25% as room rates are incremental throughout the investment term. With the rapid development of Lombok and its real estate price growth fuelled by the tourism influx, investors are also looking at high capital appreciations on their assets in the short term. PL

Property Life News | Issue 13

LIVING THE

LIFESTYLE STRIVING FOR BALANCE

roperty means many things to many people. It is both path to prosperity and a haven for the family. A property can be both an investment and a place that we call home. As a home, it is a base for exploring the world around us – including opportunities for leisure and enjoying our chosen lifestyle. At Property Life we recognise that the savvy investor is not completely preoccupied with his or her property investment, they have other interests and are continually in search of an investment / life balance. This is why we include our Lifestyle section in each issue of Property Life. In this issue, we have included articles on evening entertainment options, travel, and leisure activities. We hope that you enjoy the articles which have been put together by our in house team and some of our many partners. We are always looking for new ideas – so tell us about what you’d like to see included in future issues – we’d be only too happy to oblige. PL

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High Net Worth property investors. Property Life is changing the way Asian buyers ﬁnd information on property investment. With a Website, print magazine, and advanced mobile versions, Property Life provides advertisers with the results they want in a format reader’s demand. The Property Life subscriber database (in compliance with Singapore’s Personal Data Protection Act) ensures that your advertising message is seen and acted on by real property investors across Asia.

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The

Orient Express

– Then and Now By Albert Fontenot

ince the latter part of the 19th century, the name “The Orient Express” has evoked images of prestige and opulence in the minds and hearts of both seasoned and romantic travelers alike. Universally regarded as the quintessence of luxury leisure travel, the original Orient Express and its successor, the Venice-Simplon Orient-Express, have together withstood the test of time to remain iconic reminders of a not-yet-bygone era of adventure, mystery, and wonder—all sentiments that are sorely lacking in the overly-rushed travel and hospitality industries today.

HISTORY The original Orient Express owes its existence to Georges Nagelmackers, who was born into an important Belgian family of bankers that had close ties with the court of King Leopold II. The family had interests in the railway industry, and as a young man in 1867, the 23-year-old Nagelmackers spent nearly a year in the United States furthering his professional education and development. During his travels, Nagelmackers became intrigued with train travel via Pullman sleeping cars, and formed the belief that there could be a market for similar luxurious carriages that could travel

across national borders in Europe. After delays that included a rejection of his proposal by George Pullman and the beginning of the Franco-Prussian War, Nagelmackers was finally able to found Le Compagnie Internationale des Wagons-lits (The International Sleeping Car Company) in 1874. Almost immediately, the CIWL enjoyed a virtual monopoly as the only railway company that specifically catered to the unique needs and desires of international railroad travelers, operating as the premier provider of dining and sleeping cars in Europe.

THE ORIGINAL ROUTES The earliest version of the service that would shortly become the Orient Express was unveiled on October 10,1882,when Nagelmackers invited a select group of guests on a 2000-km rail trip on his new “Train Éclair de Luxe” (lightning luxury train), running from Paris to Vienna. After proving that longdistance speed could be compatible with the finest accommodations and cuisine, the way was paved for a more dedicated service. The very first Express d’Orient began service from Paris to Vienna on June 5, 1883, and this original route was to remain unchanged for several months. In October, the route was expanded – from Paris to Munich and Vienna, eventually ending in the Romanian city of Giurgiu. From there, passengers would ferry across the Danube River to the Bulgarian city of Ruse, where they would board another train to the seaside resort of Varna. From Varna, travelers would complete the journey by ferrying to Constantinople, the cosmopolitan largest city in Turkey. A different route was established in 1885, but it still required connecting

service to reach Constantinople – in one instance, travelers would actually have to take a carriage ride into Plovdiv to be able to complete their railway journey into Constantinople. Nonstop train service from Paris to Constantinople did not commence until June 1, 1889, and this remained the eastern terminus until May 19, 1977. It is interesting to note that the Oriental Express line into the city of Constantinople actually predates its name changed to Istanbul, which did not officially occur until 1930. This is concurrent with the heyday of the Orient Express services, which is why the train line and the city of Istanbul are irrevocably linked. During the 1930s,there were a total of three separate routes–the original Orient Express,the Arlberg Orient Express, which ran from Zürich to Budapest and eventually on to Bucharest in Athens, and the Simplon Orient Express, which eventually became the most important railway service between Paris and Istanbul.

THE PINNACLE OF LUXURY Everyone who was anyone traveled on the Orient express – prominent business people, diplomats, the famous and well-to-do, even royals and other members of the nobility.The name “Orient Express” became synonymous with the utmost in comfort and prestige. The company’s club and sleeping cars were sumptuously appointed with precious woods, gilded brass, art deco marquetry, and inlaid molten glass panels, and uniformed staff offered permanent service to tend to passengers’ every need. In particular, the restaurant cars were renowned for the gourmet quality of their cuisine. Exquisite four-course meals were served after being expertly prepared by a Paris-trained chef. History records that the first meal aboard the maiden trip consisted of oysters, Mediterranean turbot served with a sauce verte flavored with tarragon, parsley, and sage, a jellied chaud-froid of game animals, chicken chasseur with mushrooms, tomatoes, and white wine, and Châteaubriand with buttery pommes de terre Château, along with a complete buffet of desserts.And, because this was a French company, only the finest wines were served in the accompanying crystal stemware.

A CHANGING ERA The commencement of World War II forced an interruption in the Orient Express service, from 1939 until 1945, and the war’s aftermath significantly reshaped the company’s routes. Border closures meant the demise of the Athens leg, and in the 1950s, even the Istanbul portion of the route was

Railway termini are our gates to the glorious and the unknown. Through them we pass out into adventure and sunshine… E.M. Forster English novelist

perience of period travel, the cabins do not come equipped with lavatories, and there are no showers on the train. It is important to understand that any journey on the Venice Simplon Orient Express is meant to be an experience, and to that end, many guests willingly participate, even going as far as to dress in fashions that were appropriate during the zenith of elegant train travel, especially the 1920s and 30s. Smart casual wear is appropriate during the day, and proper black tie and eveningwear is required at dinner. Jeans are never acceptable. Michelin-rated French cuisine is still de rigueur in the restaurant cars, replete with polished cutlery, starts napery and elegant crystal glassware. For many, dinner aboard the Venice Simplon Orient Express is a highlight of the trip.

THE MODERN ROUTES suspended for a period. As in Eastern Europe fell behind the Iron Curtain, many communist countries used their own railway cars and services. By the early 1960s, the Simplon Orient Express was the sole remaining line, and by 1971, the CIWL no longer operated its own railway carriages, having sold or leased their holdings to the variegated railway companies of the individual nations through which it passed. The last Paris to Istanbul service concluded on May 19, 1977. A greatly truncated version of the Orient express continued to run from Paris to Budapest and Bucharest until 2001, at which time the service was further reduced to just Paris to Vienna. Further reductions eventually shortened the route to Vienna – Strasbourg, but it was eventually discontinued in December of 2009.

A WORTHY SUCCESSOR In 1977, American James Sherwood purchased two of the original CIWL carriages at auction. Eventually, Sherwood would spend over USD $16 million acquiring a total of 35 carriages – Pullman, sleeper, and restaurant.These are all period pieces from the 1920s and 1930s that have been painstakingly restored, and in May of 1982, the maiden run of the Venice Simplon Orient Express, London to Venice, was made. Travelers today willingly step back in time to experience the elegance, mystery and romance of a bygone era. The train is distinguished by its eraappropriate decor, its exquisite uniformed service, and world-class cuisine. Cabins are decorated with plush fabrics, polished woods, and attended to by uniformed stewards. Travelers can opt for a single cabin or a double cabin suite. To enhance the ex-

On the most popular route, three of the continent’s most romantic cities are linked, London, Paris and Venice. In London, the British Pullman train, distinctively coloured in an iconic chocolate and cream departs from London Victoria in the morning.The train that runs in France is in the traditional royal blue of the original Orient Express of the 19th century, and in keeping with tradition, even the same station is used, Gare l’Est. Guests will sleep the night away in their elegant cabins as the train continues on, stopping for lunch in Innsbruck. In the early evening of the second day, passengers will depart, having arrived At the Santa Lucia terminus in Venice. There are many other itineraries available ranging from single-day excursions to week-long packages that can include overnight stays in Kraków or Dresden. In 2013, Copenhagen and Stockholm were added as destinations from a Venus departure. The most sought after route happens but oncea-year – a recreation of the original 1883 route linking Paris and Istanbul. On this trip, there are overnight stays in Budapest and Bucharest, with an excursion to what once was the summer residence of the King of Romania, located in the Carpathian Mountains.

COST The Venice Simplon Orient Express is designed to service upper-crust patrons wishing to experience the utmost in fine luxury travel. The principal route between London and Venice costs EUR €2426 per person, based on double occupancy and includes all meals. The one-week tour from Venice to Stockholm costs EUR €6128, and the once a year Paris to Istanbul recreation has a price tag of approximately EUR €14,000. PL

Property Life News | Issue 13

VIETNAM UP AND COMING GOLF DESTINATION by Trevor Watling

a Lat in Vietnam may just be one of Asia’s best kept secrets, known only to locals and a select group of well travelled tourists as a mini France, or a region in Vietnam which has a unique, almost European climate. However, the word about this literally cool retreat is going to spread fast as the region may be on the cusp of becoming a major golf destination.

WORLD CLASS PGA TOUR ATTRACTION

The owners of one of the newest developments in the region, The Da Lat at 1200 Country Club and Private Estate are convinced that their golf investment project will provide a unique golfing destination for high net worth individuals from across the wider Asian region, as well as attracting investors from across the world. The development represents the first phase of an Asian Tour Destination – an exclusive network of world-class golfing estates, developed in partnership with the Asian Tour, a member of the International Federation of PGA Tours. Recently the developers hosted myself and a group of journalists from across the region at the luxurious Palace Hotel and Golf Club to give us some insight into what they believe are the unique selling points

of the Da Lat 1200 development. I arrived in Da Lat during the late evening due to delays on my internal flight from Ho Chi Minh city, to find Mr CJ Corman, Project Coordinator for Da Lat at 1200 waiting on us to join him for dinner, during which I listened to his enthusiastic explanation of this unique Golf investment opportunity. After the tedious and time consuming journey, I only had one question; why would anyone invest in The Da Lat at 1200 Country Club and Private Estate in order to play golf in such a difficult to reach destination. CJ immediately responded that if I did not know the answer to that question by dinner the next evening I should ask it again. Over the next 24 hours I was to discover that the charms of the The Da Lat at 1200 Country Club and Private Estate, and the town of Da Lat itself were answer enough to the question of why anyone would journey to this soft and pleasant land.

DA LAT DELIGHT

The following morning, I breakfasted on the terrace of the luxurious Palace Hotel and Golf Club and the cool, clear air, a rarity in Southeast Asia immediately lifted my spirits, the beautiful view across the lake to the almost European looking town of Da Lat. Exploring Da Lat was a delight, the bustling market with fruit stalls full of almost

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football size avocados were evidence of a unique climate. The architecture around the town was so unusual, that at times, I had to remind myself that I was in Vietnam. Although bustling and noisy with bikes horns, the people, as with most towns and cities in Vietnam, carry on with their daily routine day never hassling the tourists or forcing themselves on you. Certainly a different attitude towards tourists than that of neighbouring Thailand. My initial opinion was that I may return to Da Lat for a weekend break, but to play golf? On that the jury was still out. For lunch we stopped at a newly opened small resort which CJ and his team assured us was a similar concept to the planned Da Lat 1200 golf destination. It was blissful with only birds and fresh air to district from the top class cuisine. Back to nature, but with all the creature comforts. As I walked around this resort, I started to realise, that if The Da Lat at 1200 Country Club and Private Estate could top this and have an integral golf course, then there was every reason to believe that the development would be a success.

A QUESTION ANSWERED

On reaching Da Lat 1200, we stopped at

the top of the valley and I realised my question the night before was close to being answered. The valley currently features a nine hole golf course which will become 18 holes in due course. The scenery was breathtaking â&#x20AC;&#x201C; with lush greenery tumbling towards a huge lake full of carp. The surrounding hills where all the residences will be located, looks down on some of the best natural splendour anywhere in Asia.Â It is breathtaking and with plans for 1200 villas, a hotel, tennis, adventure playground, plus much more including a new three tier clubhouse and a natural grandstand around the 18th hole The Da Lat at 1200 Country Club and Private Estate has an opportunity to become a unique golf membership investment opportunity not only for golfers but also corporate clients. With membership prices being announced shortly, it is a worthy lifestyle addition to any property portfolio. My question was finally answered as I sat on the terrace of the existing clubhouse watching the sun disappear into a glorious sunset. Da Lat is simply a very special place. This is a lifestyle investment opportunity that will bring rewards in relaxation, fun and possibly a future income. PL

Property Life News | Issue 13

THE PODIUM LOUNGE TO HOST THE F1TM GRAND PRIX PARTY OF THE YEAR. This September The Podium Lounge plays host to a Singapore’s style F1™ extravaganza. As the city state of Singapore prepares once again to host the F1™ Grand Prix one of the city’s most vibrant night spots, The Podium Lounge is gearing up to once again offer visitors an unforgettable evening at an after party that will thrill patrons just as much as the on track action. Recognised as the ultimate A-List party for the racing community, situated within the track and directly across from The Paddock Club, The Podium Lounge hosts Formula 1™ drivers, teams, Royalty, celebrities, ambassadors, supermodels and the who’s who of Asia’s jet-setting party elite each year. Having hosted sell-out, celebrity packed events at The Ritz-Carlton, Millenia Singapore since 2009, the high octane Podium Lounge event is expanding from their poolside loca-

tion to The Grand Ballroom at The Ritz-Carlton, Millenia Singapore which will undergo a dramatic and glamorous transformation. The room will be completed with Singapore’s largest pop-up island bar, a dizzying overhead catwalk and VIP balconies offering a magical party experience with the racing community for up to 2,500 guests per night.

3 Michelin Star Dinners Inject the Glamour For the first time and in association with Vitisasia, Asia's premier wine and gastronomy experience provider, The Podium Lounge Singapore is rolling out the Race Dinner with Quique Dacosta of his eponymous 3 Michelin starred restaurant in Denia, Spain. In Singapore for the first time, Chef Quique Dacosta will be designing and cooking exceptional dinners. On September 19th the dinner will be complemented with multi-awarded wines from Castell d’Encus: the most original and exclusive vineyard in Spain and September 20th with wines from the world famous Château Margaux: one of only four wines to achieve Premier

Cru status in the Bordeaux Classification 1855.

Prestigious Partners DeLaCour, the presenting sponsor of The Podium Lounge is the breath-taking partnership of motor sport and refined luxury. deLaCour timepieces transcend classic convention with exclusive watches that merge haute horlogerie and timeless art. deLaCour is proud to bring you one of the watchmaker’s most exquisite sporting masterpiece yet – the City Ego Chrono 45 FB. With a debut second to none, the evolutionary Lamborghini Huracán LP 610-4 will bring its ‘Instinctive Innovations’ to Singapore this September. As part of the launch programme, Lamborghini Singapore, the Official Car Partner of The Podium Lounge presents the Lamborghini Huracán LP610-4, a new luxury super-sports car legend. Successor to the Gallardo, supercar enthusiasts at The Podium Lounge will be able to admire the glory of this automotive masterpiece with its beautiful, bold design and breathtaking silhouette. While, Singapore Airlines, the Title Sponsor of the FORMULA 1™ SINGAPORE GRAND PRIX

are also the Official Airline Partner of The Podium Lounge. This year The Podium Lounge is partnering with Red Bull to make the famed Podium F1TM after party event into a supercharged evening. Red Bull, which this year has two teams vying for Formula 1™ glory is inviting Singaporeans and visitors to the island to celebrate their participation in one of Singapore’s signature events. Fuelling the event and patrons will be the brand new flavour of the Red Bull Special Formula 1™ Edition Energy Drink, which features a perfect mix of ruby orange and mixed-fruit flavour with a hint of herbal juniper berry and vanilla. There’s even more to look forward to as The Podium Lounge is also partnering with Naked luxury artesian water, one of the purest, untouched and most immaculate artesian waters in the world. Exclusively for The Podium Lounge Singapore 2014 Naked will introduce the naked angels to the world. The Podium Lounge will also be offering guests even more, with The nightly Fashion Circuit by Gnossem. The fashion show will be immediately followed by a live auction of authenticated F1™ Memorabilia with proceeds to a good cause. Auction items including: signed and framed

photo of triple Formula 1™ World Champion Sir Jackie Stewart, Fernando Alonso signed race shoe framed with a custom matboard, Michael Schumacher hand signed full size Ferrari Race Suit – 7 times Formula 1™ World Champion, Sebastian Vettel signed race glove, Lewis Hamilton signed 20 x 30 inch photo, Mark Webber signed and box frame official Red Bull F1™ pit crew shirt and a Formula 1™ race helmet signed by all of the drivers of the 2013 season. The Podium Lounge will also be hosting a Tribute to the Legends with Special Guest Host Freddie Hunt who will be making a heart-warming tribute to his father, F1™ Racing Legend James Hunt, who’s fierce rivalry with Niki Lauda was the focus of the Formula 1™ Hollywood biopic Rush. Freddie will be joined by Former Formula 1™ World Champion Jacques Villeneuve who won motorsports’ biggest prize in 1997. DJs Miles Slater (UK) - music director of premier private-members club Boujis, Patrick Oliver (US) famed for his 2 year residency at Pangaea ultra-lounge, Marina Bay Sands) and legendary house music DJ and record producer Ian Carey (US) will be on the decks alongside celebrity DJs & vocal performers to be announced soon.

THE ULTIMATE A-LIST PARTY FOR THE RACING COMMUNITY THE PODIUM LOUNGE TEAM Following a partnership struck between The Podium Lounge’s Chief Executive Officer & Founder Robbie Hoyes-Cock and Steve Yallop, formerly with Singapore’s only luxurious ultra-lounge Pangaea, at last year’s Podium Lounge, the Singapore based company has since expanded to the Yas Viceroy Hotel in Abu Dhabi, Ms. Collins in Melbourne (March

’14) and Zelo’s at the Grimaldi Forum in Monaco (May ’14). The Podium Lounge’s first international foray was in Abu Dhabi in November 2013 where Infiniti Red Bull Racing chose The Podium Lounge as the venue for their celebration of Sebastian Vettel’s fourth consecutive Formula 1™ World Driver’s Championship

and victory at the Abu Dhabi Grand Prix. Recognised as the ultimate A-List party for the racing community, situated within the track and directly across from The Paddock Club, The Podium Lounge hosts Formula 1™ drivers, teams, Royalty, celebrities, ambassadors, supermodels and the who’s who of Asia’s jet-setting party elite each year.

PRICE (NETT PER PERSON, PER NIGHT): VIP Tables (nett per table, per night)

Early Bird / On The Door

S$1,388 for 4 + 1 magnum (1.5L) of Moët & Chandon and a bottle of spirits

S$188 / $218 General Admission

S$2,888 for 8 + 2 magnums (1.5L) of Moët & Chandon and 2 bottles of spirits S$4,888 for 12 + 4 magnums (1.5L) of Moët & Chandon and 3 bottles of spirits S$25,000 for 25 + 4 jeroboams (3L) of Belvedere and 3 magnums (1.5L) of Dom Pérignon 3 Michelin Star Race Dinner with Quique Dacosta (nett per person, including Admission to The Podium Lounge) Friday 19th with Castell d’Encus Saturday 20th with Château Margaux S$788 (before August 5) / $838 S$938 (before August 5) / $988

S$298/ $328 General Admission + a bottle of Moët & Chandon S$498 / $528 General Admission + a bottle of Dom Pérignon 3 Night General Admission Pass S$388

FOR TICKETS AND VIP TABLES PLEASE CONTACT ROBBIE HOYES-COCK MANAGING DIRECTOR OF THE PODIUM LOUNGE ON +65 9459 5211 OR EMAIL ROBBIE@PODIUMLOUNGE.COM

UPCOMING EVENTS

PROPERTY EXHIBITIONS/EXPOS

Name

Date (2014)

Venue

Organiser

Property & Immigration & Investment Shanghai Exhibition

5-7 September

SECEC Shanghai China

Shanghai Formote Exhibition

Beijing International Property & Investment Expo Spring

18-21 September

Beijing Exhibition Centre

Beijing Jia Hua Four Seasons International Exhibition

SMART Singapore Expo

27-28 September

Sands Expo & Convention Centre (MBS)

SMART

Philippine Property Show 2014

27-28 September

Level 2 Conference Centre, Orchard Hotel

Property Guru

A Place in the Sun

3-5 October

NEC Birmingham

Pattaya Property Show

3-5 October

Dusit Thani Pattaya

Dusit Thani

17th International Trade Fair for Property and Investment

6-8 October

New Munich Trade Fair Centre Munich Germany

Expo Real

Bumiputera Property Showcase

10-12 October

Paradigm Mall, Petaling Jaya KL

Iproperty Malaysia

International Investment Show (Malaysia) 2014

11-12 October

Mandarin Oriental Kuala Lumpur

Property Guru

Property & Investor Show: London UK

10-11 October

Excel, London

Property Investor

MIPIM UK 2014 International Property Trade Show

15-17 October

Olympia Exhibition Centre

MIPIM

St Petersburg International Property Show

17-18 October

Lenexpo, St Petersburg Russia

aigroup

International Investment Show (Indonesia) 2014

18-19 October

Grand Hyatt, Jakarta Indonesia

Property Guru

Penang Property Showcase

24-26 October

G Hotel, Penang

Iproperty Malaysia

Smart Investment & International Property Expo 2014 (Shanghai)

24-26 October

Shanghai Exhibiton Centre

SMART

Thailand Property Show

1-2 November

Orchard Hotel, Singapore

Property Guru

The Luxury Property Show

4-5 November

The Hurlingham Club, London

23rd Moscow International Property Show

14-15 November

Tishinka Exhibition Centre, Moscow Russia

aigroup

Smart Investment & International Property Expo Chongching(China)

8-9 November

Chongching International Convention & Exhibition Centre

SMART

Smart Investment & International Property Expo Hong Kong

22-23 November

Hong Kong Convention & Exhibition Centre(HKEC)

SMART

Bumiputera Property Showcase

28-30 November

Setia City Convention Centre Setia Alam, Selangor

Iproperty Malaysia

Indian Property Show

11-13 December

Dubai International Convention and Exhibition Centre

Sumansa

Property Life News | Issue 13

HONG KONG COMES ALIVE IN SEPTEMBER.

NOVOTEL EXTENDS A WELCOMING HAND TO VISITORS DURING THIS EXCITING MONTH. September 2014 is set to be one of the most exciting in recent memories with Hong Kong playing host to a variety of cultural and sporting events including:

HONG KONG TENNIS OPEN 2014, 8 – 14 SEPTEMBER Get set for top sporting action as some of the brightest stars in women’s tennis descend upon Hong Kong for this premier showpiece event. A blend of style, glamour, excitement and athleticism, the Hong Kong Tennis Open is a Women’s Tennis Associationsanctioned International Series Event.

TAI HANG FIRE DRAGON DANCE 2014, 7 – 9 SEPTEMBER Coinciding with Mid-Autumn Festival is the unique Fire Dragon Dance - a spectacular ritual featuring a 67 metre long dragon studded with thousands of burning joss sticks for a night time spectacle of fire, smoke and dynamic fury as the dragon wends and dances through the backstreets of Tai Hang in Causeway Bay.

THE NEW TERRITORIES WEST MID-AUTUMN LANTERN CARNIVAL 2014, 7 SEPTEMBER The Mid-Autumn Festival turns Hong Kong into an enchanting world of fiery dragons, ancient lanterns and modern light shows! During this ancient Chinese festival, Asia’s world city pays homage to its roots, a bygone era when farmers thanked the moon god for bountiful harvests. In true Hong Kong spirit, age-old tradition and innovation rub shoulders for a fun family week.

AK’S BAR + LOUNGE Looking down onto the bustling streets of Wanchai, AK’s bar + lounge has always been a hot spot for drinks and snacks in the evenings, for business and pleasure!

PEPINO ITALIAN RESTAURANT Pepino Italian Restaurant provides a spacious and airy venue for a relaxing business lunch, an intimate dinner with someone special, or just a night of good fun with a group of friends. Pepino offers a traditional menu of the very best Italy has to offer. The big portions are accompanied by value-for-money prices.

NOVOTEL WELCOMES YOU TO VIBRANT HONG KONG! Novotel Century Hong Kong is strategically located in the heart of Wanchai, Hong Kong bustling commercial, shopping and entertainment district. Within minutes you’re at the Hong Kong Convention & Exhibition Centre, Wanchai MTR station, Star Ferry Pier and Causeway Bay shopping district. Easily accessible by all forms of public transport. The hotel has 511 rooms catering to both leisure and business needs. Leisure facilities include a gym, an outdoor swimming pool, a sauna and La Regina (Beauty Spa) to relax and rejuvenate, whereas business travellers can take full advantage of the WiFi wired and wireless broadband Internet connection in all areas of the Hotel. Free WiFi is also provided in lobby and all restaurants.

RESERVATION DEPARTMENT (852) 2598 6634 H3562-RE1@accor.com www.novotelhongkongcentury.com

ADVERTORIAL

AFRICAN ODDYSEY Kempinski adds iconic hotel to growing African portfolio

n August of 2014 Kempinski Hotels officially took over the management of the famous Hôtel Des Milles Collines in Rwanda’s capital Kigali. Hôtel Des Milles Collines by Kempinski will be the European luxury hotel company’s ninth hotel operating on the continent, with three more hotels in Africa scheduled to open in the next six months. The hotel, which opened in 1973, was made famous three decades later by the film “Hotel Rwanda” as a place of refuge during the Rwandan genocide in 1994. The hotel is now officially part of the Kempinski network. Plans are in place for a major refurbishment to the rooms and restaurants over the next eighteen months to facilitate the full implementation of its signature services and standards. Located atop a hill in the center of Kigali, the hotel features 112 rooms and suites, meeting and conference facilities including a large conference room for up to 300 people, an outdoor swimming pool, a recreation area and seven boutiques. The name of the hotel translates as ‘hotel of a thousand hills’, after the lush, hilly land-

Hotel Rwanda The newest Kempinski property is the perfect base for tourists and business travelers.

scape of Rwanda that can be seen from the property. Located at the heart of the CBD and a 15-minute drive from Kigali International Airport, Hôtel Des Mille Collines by Kempinski provides quick access to the upcoming Kigali Convention Centre, the Kigali Memorial Centre, and the popular Inema Art Centre. Ideal for business travellers visiting Rwanda during this period of unprecedented growth, as well as for leisure travellers staying pre or post their way to famous gorillas treks. Home to a third of the world’s remaining mountain gorillas Rwanda offers tourists a rare opportunity to observe them in their natural habitat on the luxuriant slopes of the Volcanoes National Park, just a two and a half hour drive from the hotel. Akagera National Park, known for its “Big Three” and its variety of wildlife; Nyungwe National Park with its dense rain forest, 13 different types of primates and over 200

different tree species; and Lake Kivu, one of the African Great Lakes and one of the 20 deepest in the world, are all within a few hours’ drive from the hotel. Commenting on the soft opening of Hôtel des Milles Collines by Kempinski, Christoph Strahm, General Manager, said, “This is definitely the right time to be in Rwanda. We experience here a perfect marriage between Hôtel Des Mille Collines, the first grand hotel to open in Rwanda forty years ago, and Kempinski, Europe’s oldest luxury hotel group. Kigali is a remarkable city. The people are warm and generous and we have a great team already in place ready to showcase the unique personality of Hôtel des Milles Collines by Kempinski. We are excited to bring our signature Kempinski service to this city and usher in a renaissance of hospitality in Kigali.” Kempinski Hotels currently operates 74 hotels in 32 countries and has more than

40 hotels under development worldwide. Kempinski Hotels, founded in 1897 is Europe’s oldest luxury hotel group. Kempinski’s rich heritage of impeccable personal service and superb hospitality is complemented by the exclusivity and individuality of its properties. Kempinski now comprises a portfolio of 74 five-star hotels in 32 countries and continues to add new properties in Europe, the Middle East, Africa and Asia. Each one reflects the strength and success of the Kempinski brand without losing sight of its heritage. The portfolio includes historic landmark properties, award-winning urban lifestyle hotels, outstanding resorts, and prestigious residences. Each one imbues the quality guests have come to expect from Kempinski while embracing the cultural traditions of its location. Kempinski is a founding member of the Global Hotel Alliance (GHA): the world’s largest alliance of independent hotels. PL

Property Life News | Issue 13

INSIGHT

COMMENT FROM THE MANAGING DIRECTOR

o there you have it - another issue of Property Life filled to the brim with content that you will have hopefully found both interesting and entertaining.

Since the last issue of Property Life we have seen Panashco Media make some important strides in growing its presence throughout Southeast Asia. The organisation now has an established presence on three continents and our magazines are distributed across the region. If you attend any of the growing number of Property and Lifestyle exhibitions that take place across Southeast Asia, chances are that you will find one of our representatives there and that the latest issue of both Property Life and Investment Life will be available. We are also working diligently on info evenings and seminars of our own.

Yours sincerely,

TREVOR WATLING Managing Director Panashco Media

We have significantly increased our editorial staff component, and more information on these exciting developments will become obvious as we continue to work towards even better magazines, and an even more immersive online experience. We have relaunched the Investment Life website and the revamp of the Property Life website is well underway. Soon we will be adding video and audio functionality. By the time this magazine hits the shelves, our new Apps should be available for both Apple and Android operating systems. These really are exciting times for Panashco Media, which is rapidly evolving into a full service communications company â&#x20AC;&#x201C; however, we still have our roots firmly in publishing and doesnâ&#x20AC;&#x2122;t seem likely that we will change that anytime soon.