20230915-0921 Newsletter

Macro & Business Matters in Global?

ECB raises rates to record high, signals end to hikes

The European Central Bank raised its key interest rate to a record high of 4% on Thursday but, with the euro zone economy in the doldrums, signalled that the hike, its 10th in a 14-month-long fight against inflation, was likely to be its last.

That illustrated the dilemma ECB policymakers had faced: prices are still rising at more than twice the target rate but with high borrowing costs and a downturn in China, overall economic activity is struggling.

Against this backdrop, the ECB sent a message that its rate hikes were probably at a end, prompting euro zone bond yields and the euro to fall and European shares to rise as investors bet that it would start cutting rates next year.

Turkey to seek more revenue outside budget, including privatisation

Finance Minister Mehmet Simsek said on Monday that Turkey's government would seek further revenues outside the budget, including from privatisation, and that quantative tightening will be carried out if necessary.

Simsek said consistent domestic consumption and credit growth was needed to lower inflation to single digits, as is targeted in the country's medium-term programme.

U.S?August core inflation, excluding food and energy, rose 0.3%, hotter than expected

Inflation posted its biggest monthly increase this year in August as consumers faced higher prices on energy and a variety of other items. The consumer price index rose a seasonally adjusted 0.6% for the month, and was up 3.7% from a year ago,?the U.S. Department of Labor reported?Wednesday.

However, excluding volatile food and energy, the core CPI increased 0.3% and 4.3%, respectively.

“Housing continues to contribute an outsized share to the inflation measures,” Sturtevant said. “Rent growth has slowed considerably and median rents nationally fell year-over-year in August. ... However, it takes months for those aggregate rent trends to show up in the CPI measures, which the Fed must take into account when it takes its ‘data driven’ approach to deciding on interest rate policy at their meeting ... later this month.”

SOURECE: REUTERS,?Daily News, Daily Sanah

CRE & Tourism in?Global?

Wyndham Hotels & Resorts Surpasses 100 Open Hotels in Türkiye

Wyndham celebrated its 100th?hotel milestone with the addition of the 176-room new construction Days Hotel by Wyndham Istanbul Esenyurt, followed by the opening of Ramada by Wyndham Karapinar in Central Anatolia.

Wyndham’s portfolio in Türkiye, its fifth largest market globally by hotel count, now includes hotels in more than 45 cities and sought-after destinations across the country, ranging from economy to upper-upscale accommodation options.

In 2022, Türkiye received over 51 million inbound visitors and is targeting 60 million travellers in 2023. The country remains a leading performer amongst European markets with strong occupancy rates driven by both domestic and international demand.

PHP acquires care facility in Ireland for €30m

Primary Health Properties has agreed to acquire?Ireland’s?first Enhanced Community Care (ECC) facility at Ballincollig, near?Cork, Ireland, for €29.64 million.

The property is fully let to the Health Service Executive (HSE) on a 25-year?lease?and benefits from five yearly, compounded annually, Irish CPI indexed?rent?reviews.

The Government led ECC programme is a?€240 million?initiative to enhance and increase community-based health services aimed at reducing pressure on hospital services in?Ireland. The building will provide a variety of services primarily to support elderly care and those suffering from a variety of chronic diseases including cardio, respiratory and endocrine issues.

The property will be managed by Axis Technical Services,?PHP’s Irish property management business, and the acquisition will increase PHP’s portfolio to 514 assets, of which 21 are in?Ireland, with a contracted?rent?roll of over?￡149 million.

Meridia?buys two hotels after closing latest?real estate fund

Meridia, the Spanish-based alternative investment manager, has launched Meridia V, after completing a first close. The fund is expected to be the largest vehicle raised to date by Meridia.

Meridia V has already made its initial investment: a portfolio of two hotels in Barcelona and Málaga, comprising a total of 213 rooms.

The investment manager see the properties — the Hotel Gallery in Barcelona's city centre and Hotel Molina Lario in Málaga — as offering significant growth potential.

Meridia V plans to implement a smart capex and asset management strategy to position both assets in the upper four-star segment, while maintaining high environmental, social, and governance (ESG) standards.

Meridia V focuses on diversified value-add real estate opportunities in Spain, established to target areas of unsatisfied demand at the end-product level and to exploit the long-term secular trends in the Spanish real estate market such as brown to green transformation, new demographics re-shaping real estate needs or scarcity of land.

SOURECE: Google News, GTP, Greek City Times, PORTUGAL NEWS, Daily News, Daily Sabah

Market Performance & Institution Views

Global Cross Border Commercial Property Capital Flows Implode 52 Percent Annually in 2023

According to a new report by CBRE, global cross-regional capital flows totaled $30.5 billion in H1 2023, down by 52% from H1 2022 and the second consecutive half-year period with an approximate 50% decrease in volume.

Much of this decline in cross-regional activity was due to less North American capital flow to Europe amid high interest rates, constrained debt markets and economic uncertainty. Europe saw inflows decline by two-thirds year-over-year, which is notable because the region is the largest recipient of cross-regional investment by a wide margin.

Global Chief Economist for CBRE Richard Barkham says, "Global investors likely will remain cautious for the rest of this year due to high interest rates and economic uncertainty. Nevertheless, it appears that inflation has peaked globally and central banks are either at or near the end of their rate-hiking cycles. Therefore, we expect the global investment market to begin recovering in the first half of 2024."

Cross-regional investment to North America increased by 5% year-over-year as Singaporean and Japanese investors made two major acquisitions and accounted for half of total cross-regional inflows to the region. Singapore-based GIC's share of the $14 billion buyout of real estate investment trust STORE Capital in partnership with Chicago-based Oak Street Real Estate Capital boosted North American inflows in H1 2023, along with a large New York City office sector acquisition by Japanese investors.

Cross-regional capital inflows to Asia-Pacific (APAC) decreased by approximately one-third year-over-year. Investment was evenly distributed among industrial & logistics, multifamily and office assets. However, cross-regional investment in office assets fell by two-thirds year-over-year. Japan received relatively strong volume from North America due to favorable exchange rates, lower cost of finance and positive carry.

SOURECE: HNR, CRE HERALD, Hospitality Investor