Business Booms for Malaysia’s Hotel Sector
2014 was a good year for Malaysian tourism, attracting international brands like Kempinski, Four seasons, Fairmont, Ritz Carlton, Ibis and Hilton to Kuala Lumpur’s expanding market, with plans to commence operation in the capital over the next three to five years.
Visitor numbers throughout last year increased more than 10% to 18.4 million, despite the drop in tourists in reaction to the disappearance of Malaysian Airlines flight MH370 in March 2014. Malaysia ‘s government have pulled out all the stops to support investment in its hotel sector granting Investment Tax Allowance and Pioneer Status for new hotels with 4 and 5 star ratings. Hotels that are 100% foreign owned also qualify for these tax incentives, which is a big attraction for international hotel brands.
The government’s Malaysian Investment Development Authority (MIDA) has identified the country’s tourist sector as one of the 12 National Key Economic Areas (NKEAs,) set to attract investment in its private sector to drive the nation towards high-income status and global competitiveness.
The goal of Malaysia’s government is to push tourism by investing heavily in its infrastructure and providing attractive incentives to foreign hoteliers seeking to expand in Southeast Asia. The government’s Tourism Transformation Plan sets a target of 36 million tourist arrivals annually, contributing €36bn to the economy each year by 2020.
Latest hotel developments in Kuala Lumpur include a joint venture between Singapore developer Oxley Holdings and Dubai’s Jumeirah Group – the luxury hotel brand behind the Emirate’s iconic Palm Islands. The JV plans to operate a 190-room luxury Jumeirah hotel with a further 273 premium residences carrying the group’s brand in Malaysia’s most visited destination, it’s capital city – Kuala Lumpur.
Commenting on Oxley’s fifth luxury hotel in the region, chairman and chief executive Ching Chiat Kwong said: ” This partnership with Jumeirah Group further enlarges and reiterates our presence in the Malaysian market. ” He added that Oxley are seeking to launch more hotel developments in Malaysia, Cambodia and Indonesia as part of its strategy to expand its investment in property.
In terms of smaller-scale property investment in Malaysia, the strong dynamic in the country’s tourist sector in resort areas where there is significant and rising demand provides plenty of value growth opportunities, particularly in Kuala Lumpur.
Affordability remains a major issue for domestic buyers in Malaysia and sales volumes fell by around 8% year on year during 2014, while prices soared 72% over the same period of time. The country’s central bank, Bank Negara introduced cooling measures to curb rising household debt that stands at almost 87% of GDP, with loans for properties forming the bulk of household debt at around 47%.
With property prices at levels beyond the reach of many Malaysian nationals, foreign investment in the country’s private rental sector is on the rise. Apartment prices in Kuala Lumpur are reasonable at between €1,300-€2,600/m2 and value growth in the city has reached stability. The prime attraction for investors in the capital is rental income.
Gross rental yields in Kuala Lumpur have registered a decline over the past year, with rents not keeping pace with rising nominal prices. The highest value growth investment is in the 120m² apartment category which has recorded gross returns of between 7% and 8% over the last 12 months.
As major names in the international hotel business continue to construct and open luxury operations in Malaysia, demand for investment property in resort areas is set to increase significantly. With plenty of yield opportunities in both the country’s domestic private rental market and the tourist sector, there is plenty of scope for investment in Malaysia at the current time.
Article by +Roxanne James on behalf of Propertyshowrooms.com
Tourists Flock to Cape Verde in 2015
Cape Verde’s National Statistics Institute (INE) reported a 2% annual increase in visitor numbers in the first half of 2015, putting the country on target for a bumper year for tourism.
In the first six months of the year, more than 278,000 visitors arrived on the beautiful archipelago off the northwest coast of Africa, attracted by its fabulous beaches known as jumping-off points for windsports and a great location for diving among shipwrecks.
During the second quarter, Cape Verde hosted 116,200 tourists representing a 4.8% increase on the same period of 2014, despite the country’s relatively under-developed tourism infrastructure. Overnight stays the first six months increased 3.5% to almost 1.8 million with hotels remaining the most popular type of accommodation for 87.3% of visitors to the tiny archipelago nation.
The data reveals that the second quarter of the year saw mostly British tourists arriving in Cape Verde, representing around 25% of international visitors. Brits holidayed for an average stay of 9 days, with the island of Sal as the most popular resort location, accounting for around 46% of overnight stays in hotel establishments.
Cape Verde is a former Portuguese colony and maintains close links with Portugal and the Eurozone. Special partnership status has been granted by the EU and in 2008 Cape Verde joined the World Trade Organisation. The country has improved significantly to achieve economic stability with plenty of potential for further growth, particularly through its tourist sector.
The country’s democracy is one of Africa’s most stable and Cape Verde was officially removed from the United Nations’ list of Least Developed Countries in December 2007. The country’s outlook has never been better according to the World Bank , recently reporting that ‘good governance, sound macroeconomic management, trade openness and increased integration into the global economy, as well as the adoption of effective social development policies underpinned an impressive development trajectory’.
Around half of Cape Verde’s 482,000 population lives on the biggest island, Santiago which is home to the capital city, Praia. Tourism is mostly concentrated on the island of Sal which has the country’s only international airport capable of receiving charter flights from Europe. New and bigger international airports are scheduled to be opened in Santiago, San Vicente and Boa Vista, boosting residential property prices in those areas.
Almost every habitable island of the archipelago has new development in construction. Capital values are consequently rising by 10%-15% annually and yet property in Cape Verde is still very much a bargain at around €1,200-€1,650/m².
Despite the recent rise in visitor numbers, Cape Verde remains largely undiscovered to international travellers, despite its unique cultural vibe and breathtaking beauty. Data from the INE from 1997 shows that 45,000 visitor arrivals were recorded for the year compared with more than 500,000 expected in 2015, illustrating the country’s massive rise in popularity among international travellers over the years.
Consequently, the archipelago has been overlooked by property investors and the market for holiday rentals is almost non-existent. A studio unit in popular Santa Maria is currently priced at around €81,000 which would offer a yield in the region of 8%-9%, according to local realtors.
The ten archipelago islands of Cape Verde are clustered 280 miles off the coast of Africa, approximately one hour south of the Canary Islands. Notable for its vibrant blend of Portuguese and African cultures the country is also blessed with long stretches of fine white sandy beaches and an all year round perfect temperature of between 25 and 34 degrees.
With booming tourism and discounted real estate, it won’t be long before investors zoom in on Cape Verde’s bountiful property market. For investors seeking a lower entry level property purchase, there are investment opportunities in the country’s hotel sector currently attracting interest among buyers of income generating assets, starting from as little as €10,000.
Article by +Roxanne James on behalf of Propertyshowrooms.com
Maltese Real Estate an ‘Opportunity Gateway’ for Ultra Rich
According to the findings of Wealth-X and Malta Sotheby’s International Realty , Malta is home to 35 Ultra-High-Net-Worth (UHNW) individuals worth around €145bn and two foreign billionaires.
Published last week, the report reveals that 77% of UHNW foreigners who have acquired a residency permit in Malta are self-made. One of Malta’s billionaire residents is Irish-born Denis O’Brien who owns Communicorp, a media holding company operating across Europe and he is listed among the World’s Top 200 Billionaires in 2015 .
To qualify as an UHNW individual, investable assets of at least €27bn are the benchmark, excluding personal assets and property such as a primary residence, collectibles and consumer durables. In February 2015, Malta Sotheby’s International announced its partnership with Wealth-X to provide valuable insights into today’s luxury real estate market and the buying behaviour of the ultra-wealthy consumer.
Malta is among the world’s smallest nations, with a rich history and culture that has been a strong pull for UHNW residents for many years. The country boasts a warm subtropical climate, stunning cliff views of the Mediterranean and numerous UNESCO world heritage sites.
Malta is a rich tapestry of cultures and traditions
Formed by its many historical rulers and influences, Malta is a rich tapestry of cultures and traditions, with classical and contemporary homes scattered throughout the island. Several new seafront complexes offer the range of modern luxury amenities while many older homes are prized for their unique architectural detail.
Foreign nationals are allowed to buy one property anywhere in Malta though in specially designated regions they may purchase additional properties. Several new and exclusive penthouse developments and the luxurious resort ‘Three Villages’ located in Sliema on the east coast are particularly attractive to foreign investors
France, Germany and the US are the top countries for foreign UHNW investments in Maltese property where the average listed price for homes over €1m is around €2.5m, while the median price per square metre is around €6,500 in that price range.
Good long term investment opportunities
The report’s findings show that Malta offers good long term investment opportunities. During 2014, market volatility in certain nations, particularly China, has led wealthy property buyers to seek homes in economically and politically stable locations like Malta, as a hedge against market instability at home. The report states that ‘Malta’s citizenship programme enhances the island’s position as an attractive location for investment, especially as the EU is the most significant region of citizen application’.
Global citizenship is becoming an increasingly popular tool for the world’s ultra-wealthy and Malta’s citizenship programme enables foreign nationals to purchase a property anywhere across the island, although more than one property situated within Special Designated Areas (SDAs) can be bought. Most of the islands luxury lifestyle developments are located in prime, highly sought-after locations in the island’s commerce, leisure and activity hubs.
Wealth-X President David Friedman commented: ” Wealth-X is pleased to partner with Sotheby’s International Realty brand for this third luxury real estate report for 2015. This new joint study explores the trend and home-buying motivations of a distinct group of ultra-wealthy individuals in the emerging markets. As their wealth grows, so will their investment fuelled by various motivations, be it to diversify their portfolio or to gain citizenship or residency in a foreign country “.
According to Philip White, president and chief executive officer of Sotheby’s International Realty Affiliates, the joint report provides an understanding of the trends driving buying decisions of the ultra-rich around the world. ” The research reveals trends that go beyond traditional motivations and help guide real estate investments that contribute to long-term wealth “, he said. ” It underscores the important role real estate plays in a larger strategy to build a valuable asset portfolio “.
Article by +Roxanne James on behalf of Propertyshowrooms.com
Specialist Property Investment Soars in the UK
As real estate investors seek to diversify within the asset class, specialist property investment has become the next big thing and nowhere more so than the UK.
According to Knight Frank’s recently published Specialist Property, The Core Markets report, investment in alternative British property assets including student accommodation and hotels has become a critical component of investors’ core portfolios.
Darren Yates, partner of Knight Frank’s commercial research said: ” Based on our in-house forecasts, Knight Frank estimates that investment in the core specialist property sectors will break through the £10bn barrier in 2015 “.
The amount of capital being poured into property has done more than drive down yields, according to Knight Frank; the difficulty of securing traditional investments and the drive for diversification has put specialist sectors including automotive, property, healthcare, hotels and student property very much into the spotlight.
As a result of increased demand for specialist property investments, the UK is set to achieve a record year, with transaction volumes likely to reach £12bn by the end of this year. Knight Frank report that the number of deals in the pipeline with completions expected by the end of the year means their original forecast is likely to be exceeded by a significant margin.
In the first six months of the year, transaction volumes for student property reached £3.5bn and are expected to exceed £5bn for the full year. With a shortage of good quality assets, prime yields have been prompted to harden to 4.5%, with increasing pressure on pricing for secondary stock.
The hotel sector has been notably buoyant among the range of specialist property assets, with investments attracting significant attention and equity. Again, this sector is affected by the supply demand imbalance that exists in the market which could potentially lead to further yield compression.
” Specialist property is attractive to many investors and there are a number of common threads across the various sub-sectors, not least the strong alignment with residential, the opportunity to diversify away from traditional property and the occupier-driven nature of the sector. However, the key reason why we are seeing such an exceptional level of investor interest is the structural under-supply of high quality, purpose-built accommodation. This is supported by buoyant demand from increasingly discerning occupiers, ” said Shaun Roy partner of specialist property investment at Knight Frank.
The specialist property market continues to evolve as a segment in its own right, led by fixed income sectors such as hotels, healthcare and retirement accommodation but also encompassing automotive, student property and even private rented sector (PRS) residential accommodation. Nevertheless, fixed income transactions account for a small portion of the total specialist market.
Investor appetite for specialist property is growing in the UK amid an accelerating economic recovery that has broadened out around the country. There is underlying support for specialist investments from a combination of improving occupier demand, easier to access finance, a broader understanding of operators’ businesses and a willingness to take on greater risk.
Knight Frank say it seems inevitable that investors will move further up the risk curve in search of returns, increasing their operational exposure to these markets through turnover-related leases, direct let and management contracts.
As with other emerging property sectors over the years, yields on alternative assets historically start at a high level and harden as investor interest increases and some sectors have become more accessible in the process. As a result of the growth in capital values in recent years, many early entrants to the specialist property market have reaped significant rewards.
Article by +Roxanne James on behalf of Propertyshowrooms.com
Record Growth for Monaco Real Estate Market
Monaco is the richest and most glamourous country in the world, known for its high average income and individual wealth and for being the location of one of the most dramatic Formula 1 Grand Prix circuits in the sport.
Homes in the tiny Principality have long been beyond the reach of buyers without bottomless pockets and yet its property market is accelerating at a greater pace than Nico Rosberg’s F1 Mercedes when he won Monaco’s 2015 Grand Prix in May.
Monaco saw record property sales in 2014 and looks set to do the same this year, according to global real estate advisor Savills. The Principality’s status as a tax haven makes it an attractive place to establish residence for wealthy people from all over the world. A significant number of residents are from a variety of nationalities and many are celebrities, making Monaco synonymous with wealth, power, fame and prestige the world over.
Material symbols of wealth such as luxury goods, expensive cars and exclusive shops are visible everywhere, while Monaco’s coastal position makes it a popular port for luxury yachts. Long-established as a safe haven for European and international investors, Monaco nonetheless took a hit during the global recession with cumulative value of resales plummeting 53.9% down to €495.8m, according to a study by Ismee Monaco statistics.
Monaco’s real estate market stopped and started through to 2010 and began to recover the following year when sales rose to €980.5m. Since then, transactions volumes have increased by a massive 159%, with most growth being recorded in 2014, when sales soared to 555, 21% higher than at market peak in 2007 and aggregate values broke the €2bn mark for the first time ever.
With property prices in the region of €60,000/m2, Monaco remains one of the world’s most expensive real estate markets, yet in dollar terms it has slipped to second place behind Hong Kong as a result of euro weakness. The Principality’s property market is driven by demand for small homes in its resale sector, with properties having up to three rooms accounting for 80% of transactions and 50% of the total value in 2014.
The new development market is tiny and exclusive and since the global economic downturn, developers in Monaco have shifted their focus to the global ultra-prime segment, developing larger units at higher price points. This has pushed new build sales volumes to €345m, two-and-a-half times the volume recorded in 2013 and 13 times that of 2008.
Paul Tostevin, associate director of Savills World Research said: ” The unique offering of Monaco’s global appeal and it’s extremely limited land supply will all combine to keep its real estate prices with few or no mechanisms for them to fall. Prices are at, or near, a high plateau and will be for some time to come “.
There is every expectation that prices in Monaco will remain solid in 2015 because supply is extremely short – the pipeline of new development currently being built in the Principality will hit the market in a few years, while demand is very strong. Savills found that for the global super-rich, Monaco is part of a network of city property holdings that also includes London, New York and Moscow.
Article by +Roxanne James on behalf of Propertyshowrooms.com
Business Partners
