Global Investment Observation| 20241012
JWP Global Investments
Creating value on international asset-backed investments
Economics?& Markets??
?i?? Macro?Economy??
Hungary has overcome inflation crisis, economy minister says
Data suggests Hungary has overcome its inflation crisis, its economy minister said on Wednesday, after the country posted the highest rate of price growth in the European Union last year before it started slowing towards the central bank's target.
Marton Nagy said Prime Minister Viktor Orban's cabinet would still "keep an eye" on inflation, but would also focus on reviving economic growth amid a weaker-than-expected recovery from last year's inflation-led downturn.
The bank has also flagged a rebound in core inflation to around 5% by the end of 2024 and said its preferred measure of underlying price trends could still exceed 3% next year.
The forint , central Europe's worst-performing currency which has lost more than 4% versus the euro this year, also plumbed its weakest levels per euro this week than at any point since the NBH started cutting rates in May 2023.
ECB to cut rates by 25bps in both Oct and Dec as euro zone economy wobbles
The European Central Bank (ECB) will cut its deposit rate by 25 basis points on Oct. 17 and again in December, according to more than 90% of economists polled by Reuters who now see a quicker decline in euro zone inflation.
The ECB doesn't have a neutral rate estimate, which neither restrains or stimulates the economy, but staff published a paper this year showing a?real rate?of around zero - or about 2% in nominal terms - when adjusted for inflation.
Greece's growth seen nearly unchanged in 2025, draft budget shows
The Greek government is forecasting economic growth of 2.3% in 2025, outperforming Europe's major economies, thanks to strong tourism revenues, robust consumer spending and investment, a 2025 draft budget showed on Monday.
Greece, which is still recovering from a debt crisis that nearly saw the country drop out of the euro zone in 2015, is projecting a 2.2% rise in its economic output this year.
The government trimmed its previous estimate for 2025 growth of 2.6% in April due to a stagnating European economy, a key source of investment and tourism in the country, along with high inflation.
The draft budget saw downside risks from the conflicts in Ukraine and the Middle East, along with possible new geopolitical tensions. More than half of foreign direct investment into Greece comes from northern European countries, while two-thirds of the country's exports such as agricultural goods, fuel and pharmaceutical products go to the EU.
Since emerging from a bailout in 2018, Greece has regained its investment grade ratings last year, revived its?banking system?and relied solely on debt markets for its borrowing needs. But unemployment remains at 10% and the average monthly salary is 20% lower than 15 years ago.
Public debt is seen dropping by five percentage points to 149.1% of GDP in 2025 from 153.7% this year.
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Antalya welcomes record 14 million tourists in 9 months
Antalya, Türkiye’s major holiday destination on the Mediterranean coast, has hosted a record 14 million tourists in the first nine months of 2024.
This marked an 8 percent increase from a year ago and an all-time high figure for the January-September period, according to a statement from the Culture and Tourism Ministry.
As was the case last year, Russians were the largest group of foreign holidaymakers in the first 9 months of 2024.
From January to September, 3.25 million Russian nationals visited the city.?Germans ranked second on the list at 2.7 million, followed by tourists from the U.K. at 1.3 million.?Holidaymakers from Poland, Kazakhstan, Romania, the Netherlands, Ukraine and the Czech Republic and Slovakia constituted the other largest groups, vacationing in Antalya.
In September alone, the number of tourists visiting the city increased by 92,682 to reach 2.34 million people, said the ministry.
The latest available data from the ministry showed that foreign tourist arrivals in Türkiye rose by 7 percent year-on-year to 35.8 million.
Istanbul had the largest share at 34 percent or 12.3 million, followed by Antalya at 30.8 percent or 11 million visitors.
Türkiye aims to welcome 60 million visitors and generate $60 billion in tourism revenues this year.
Türkiye ranks fourth in Europe in hotel projects in pipeline
Türkiye ranks fourth in Europe’s hotel constructions in the pipeline with 117 projects/17,856 rooms, according to Lodging Econometrics’ (LE) second quarter Europe Hotel Construction Pipeline Trend Report.
The United Kingdom leads the list with 306 Projects/43,515 rooms, followed by Germany with 178 projects/28, 637 rooms and France with 120 projects/12,831 rooms. ?Portugal came fifth after Türkiye with 114 projects/14,247 rooms.
These five countries combined account for 50 percent of the projects and 47 percent of the rooms in Europe’s total pipeline and are expected to lead in new hotel openings through 2026.
The cities with the largest pipelines are London (76 projects/14,954 rooms), Istanbul (50 projects/8,397 rooms), Lisbon (36 projects/4,425 rooms), Dublin (26 projects/5,012 rooms) and Dusseldorf (24 projects/4,448 rooms).
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In the second quarter, most projects in the pipeline in Europe are concentrated in the upper upscale, upscale, and upper midscale chain scales, according to the report.
The upscale chain scale leads with 358 projects/55,936 rooms, accounting for 21 percent of the pipeline.
Europe experienced significant growth in new hotel openings during the second quarter with 81 hotels and 10,569 rooms opening, a 72 percent increase compared to the first quarter, the report said.
In total, 128 new hotels with 16,829 rooms opened throughout Europe in the first and second quarters.
LE analysts forecast an additional 202 new hotels with 27,106 rooms to open in the third and fourth quarters, bringing the total forecast for new openings in 2024 to 330 hotels with 43,935 rooms.
Portuguese to join China visa exemption list
China has extended its visa exemption policy to Portuguese citizens and, as of October 15, Portugal will be added to a list of 16 countries whose citizens do not require a visa to enter China for stays of up to 15 days.
According to Lusa, the extension of the visa exemption policy to Portugal was announced by the Chinese Ministry of Foreign Affairs, following Norway, Slovenia, Greece, Denmark and Cyprus, which have also started to waive visa requirements for stays of up to 15 days in China.
The visa exemption applies to citizens travelling to China for tourism, business or transit purposes, and will be in force until 31 December 2025, with Lusa explaining that China intends, with this measure, to stimulate international tourism and foreign investment.
In November last year, the Chinese authorities had already announced that nationals of France, Germany, Italy, the Netherlands and Spain would benefit from a unilateral visa exemption, in a list that was expanded in March of this year with the addition of countries such as Switzerland, Ireland, Hungary, Austria, Belgium and Luxembourg.
Hungary's house prices rose 6.7% year-on-year in September
Prices of homes in Budapest averaged HUF 1,070,000/sqm at the start of October but were as high as HUF 1,730,000/sqm in central District V.
Hungary's house prices rose 6.7 percent year-on-year in September.
Listings site ingatlan.com said on Thursday that home prices in the capital climbed 9.1 percent and price growth continues to accelerate.
Prices of homes in Budapest averaged HUF 1,070,000/sqm at the start of October but were as high as HUF 1,730,000/sqm in central District V.
In Debrecen, Hungary's second-biggest city, home prices averaged HUF 839,000/sqm. ?Homes were the cheapest in Salgotarjan (NE Hungary) at HUF 282,000/sqm.
Next year, ingatlan.com will augur a 10-15pc increase in home prices.
Construction Cost Increases Hit 3-Year Low
The national average increase in construction costs was 1.07 percent in the third quarter, the lowest in the past three years, according to Rider Levett Bucknall’s crane index and quarterly cost report, which studies 14 key markets.
Boston, Denver, Honolulu, New York City, Seattle and Washington, D.C., all saw gains exceeding the national average this quarter. Chicago, Las Vegas, Los Angeles, Phoenix, Portland and San Francisco recorded gains that were below the national rate.?
The national average increase in construction costs?in the second quarter?was 1.12 percent over the previous quarter. The U.S. national average increase in construction costs was approximately 5.41 percent, compared to 5.85 percent year-over-year in the first quarter.
With lower inflation rates, prices should continue normalizing, barring any major supply chain disruptions,” Romero told?Commercial Property Executive.
ii?? Investment Observation??
European Hotel transactions reached €10,6B in the first half of 2024
Hotel transaction activity increased to the highest levels since 2019 in the first half of 2024, according to HVS' H1 2024 European Hotel Transactions report.
Reaching €10.6 billion, the total volume transacted increased by 123% year-on-year, already reaching the total volume for the whole of 2023. There were 20% more transactions this semester, with a decrease of 11% in the number of rooms per hotel, translating into a 30% increase in price per room over H1 2023.
Single-asset transaction volumes increased 50% year-on-year last semester, totalling €5.8 billion, surpassing H1 2019 totals for the first time since the start of the pandemic.?
Portfolio transaction activity doubled year-on-year, despite eight fewer transactions compared to H1 2019. While the volume reached €4.7 billion, the highest since 2019, it remains nearly 40% behind pre-pandemic levels.?
Private and hotel investment companies were buyers, and hotel unit owner-managers were sellers.
With the pick-up in transaction activity last semester, the price per room increased by 30% year-on-year, 9% ahead of 2019 levels in nominal terms. Transactions where the price per room was above €1 million accounted for 12.2%, a volume which increased nearly two-fold, signalling a growing proportion of luxury assets transacted.
https://ered.gr/real-estate-news/european-hotel-transactions-reached-10-6b-in-the-first-half-of-2024