Pick of the bunch: W/E 30th August 2024

Highlighting some of our latest opportunities across each of our disciplines, alongside global market insights for real estate professionals, weekly.

Residential Real Estate

This week in the UK residential real estate market, Nationwide Building Society reported a 0.2% drop in house prices for August, although the annual growth rate increased to 2.4%, the fastest pace since December 2022. Average property prices now stand at ￡265,375, still about 3% below the peak levels reached in summer 2022. Nationwide's Chief Economist, Robert Gardner , noted that while the market is currently subdued due to high interest rates and affordability issues, there is cautious optimism that economic recovery could gradually enhance market activity.

Energy efficiency has become increasingly influential in property valuations. Nationwide’s data revealed that homes with top energy efficiency ratings (A or B) attract a 2.8% premium compared to those rated D. This trend underscores the growing importance of sustainability and energy costs in buyer decisions, aligning with the UK's broader goal of reducing emissions and improving housing stock efficiency by 2050.

In European real estate, 德勤 's Property Index highlighted Budapest as experiencing the highest rise in new apartment prices among EU capitals, with an 11.2% increase in 2023. This contrasts sharply with London, where central city apartment prices fell by 12.5%. Paris remains the most expensive capital for new apartments at EUR 14,900 per square meter, while Copenhagen saw the largest drop in prices, down 7.4%. These regional variations illustrate the diverse economic pressures affecting European housing markets.

In the US, the housing market is showing signs of life despite ongoing challenges. Recent data from Freddie Mac indicates that mortgage rates have fallen to their lowest levels in over a year, prompting a surge in refinancing activities. New home sales jumped by more than 10% last month, reaching the highest level since May 2023, and existing home sales also saw a modest increase of 1.3%. Despite these gains, affordability remains a significant issue, with the median price of existing homes 4.2% higher than a year ago. Prospective buyers continue to face hurdles due to elevated prices and high mortgage rates, though there is some hope that anticipated rate cuts by the Federal Reserve could eventually provide relief.

Contact: Michael Woda , Bradley Hellier , Mitchell Dring

In partnership with Druce

Druce, a name synonymous with luxury real estate since 1822, aims to expand its presence across multiple territories London, partnering exclusively with GKR International - Real Estate Talent Specialists, to bring top-tier talent into the business. Read the full article here.

Email: [email protected]

Website: www.gkrinternational.com/clients/druce-careers

Contact: Lee Riley , Grant Kaveney

Property Management

In the United States, a notable development in property management education is set for 2025 with the University of Colorado Colorado Springs (UCCS) launching a new four-year degree program in Property Management and Real Estate. This initiative, funded by a $2 million joint contribution from Weidner Apartment Homes and Norwood Development Group , will enhance the university’s Downtown campus, which will double in size. The program aims to provide a robust curriculum including hands-on learning and industry events, addressing the high demand for skilled property managers. Weidner’s founder, Dean Weidner, and Norwood CEO Chris Jenkins emphasized the program’s potential to enrich the local community with well-trained professionals.

In the realm of property management careers, the demand for professionals overseeing luxury short-term rentals is growing rapidly. The US Bureau of Labor Statistics projects that property management jobs will expand faster than average over the next decade. With increasing interest in high-end rentals and vacation homes, professionals in this field are needed to handle vetting, rent collection, and property maintenance. Insights from experts like Karen Hatcher, CPM? of Sovereign Realty & Management and Rebekah Boley of Hotel Home Stays underline the importance of skills in customer service, financial management, and industry knowledge for success in this evolving sector. The rise in demand reflects broader trends in real estate and property management, highlighting both opportunities and challenges in the field.

Contact: Rose Lock , Emma Bradshaw

Business Support

This week, China's property management landscape saw significant updates with the China Will Registration Center introducing a comprehensive legal framework to address challenges in senior care and estate management amid rapid urban renewal. The accelerated redevelopment of residential and industrial areas has led to increased property inheritance conflicts. Chen Kai, the Center's Director, highlighted growing issues with cumbersome inheritance procedures and unclear property rights during renovations. To tackle these challenges, the Center has enhanced its services to include will drafting, estate management, and senior care provisions, aiming to mitigate disputes and improve legal awareness through public lectures and community consultations.

Contact: Anuradha Deb , Michael Woda

When should companies disclose the full details of bonuses and additional benefits during the recruitment process? ??

1. Early on, it’s crucial (61%)
2. During the interview process (27%)
3. Only when a job offer is made (11%)
4. I’m indifferent (1%)

To attract and retain top talent, employers must prioritise transparency by sharing comprehensive compensation details, including bonuses and additional benefits, early in the recruitment process. This week's poll makes it clear that candidates value early disclosure, with 61% expressing a preference for learning about these details upfront. By being transparent from the start, employers not only build trust but also differentiate themselves in a competitive market, reducing the risk of losing top candidates to competitors who are more forthcoming. Delaying this crucial information can lead to candidate disengagement or scepticism, ultimately impacting the success of the hiring process.

GKR International - Real Estate Talent Specialists can assist employers in implementing this strategy effectively. With deep expertise in the real estate sector, GKR understands the importance of aligning recruitment practices with candidate expectations. By partnering with GKR, companies can ensure that their compensation packages are communicated clearly and at the right stage, helping to secure the best talent and improve overall recruitment outcomes.

Commercial Real Estate

Scott Kelley , CEO of Aetos Capital Real Estate, LP , has reported that data centres are experiencing unprecedented growth, driven by surging demand for data storage and processing. The market for data centres has doubled in size over the past four years, with colocation data centre vacancies plummeting to a record low of 3%. This surge contrasts sharply with broader market trends, as office vacancies remain high and values in central business districts have plummeted by 52% since their peak. The general commercial real estate market is grappling with over $900 billion in maturing debt, which will need to be refinanced at potentially higher rates, adding to the sector's uncertainty.

In the U.S. commercial real estate market, sector-specific trends reveal a varied picture. The industrial sector is notably struggling, with net absorption plummeting nearly 70 percentage points from the previous year and an increase in vacancy rates. This downturn reflects broader challenges, including rising inventory levels and reduced rent growth. Conversely, the multifamily sector is experiencing robust demand, with net absorption soaring by 90% from the previous year. Despite a consistent vacancy rate of around 8%, the strong demand for rental units underscores the sector’s resilience and growing appeal amid high mortgage rates impacting housing affordability.

Romania's commercial real estate market is showing robust activity in 2024, with total transactions reaching EUR 661 million in the first eight months, surpassing the entire volume for 2023 by 20%. Significant investments include the purchase of the Iride office complex in Bucharest by local investor Alin Niculae. Romanian investors, though ranking third in investment volume with EUR 139 million, have been active, with notable deals involving Belgium’s WDP - Warehouses with brains and Czech Republic’s CTP , who acquired properties totalling EUR 207 million and EUR 168 million, respectively. This heightened investment reflects growing confidence in Romania's real estate sector and indicates a strong performance moving into the latter part of the year.

Contact: Rose Lock , Michael Woda

Built Environment

A recent review investigated the impact of social and built environments on physical activity, with a focus on socioeconomic status and urban planning. The analysis of 72 studies found that infrastructure improvements, such as walking and cycling facilities, parks, and sports venues, significantly boost physical activity, particularly in higher socioeconomic areas. Lower socioeconomic regions often lack these amenities, which restricts physical activity opportunities. The review highlights the importance of inclusive urban planning to ensure equitable access to physical activity resources across all communities.

Smart buildings are pivotal in reducing carbon emissions, a significant contributor to the UK’s carbon footprint. According to Stacey Lucas , President of the Building Controls Industry Association (BCIA) , these buildings leverage automation and advanced technologies to optimise energy use. They integrate systems for lighting, heating, and cooling, and utilise renewable energy sources like solar panels. The use of the Internet of Things (IoT) for real-time data monitoring enhances energy efficiency and occupant well-being, aligning with the UK’s net-zero targets and supporting overall sustainability.

Gender inequality remains a significant issue in South Africa’s built environment sector, with only 13% of professionals being women, as reported by the Council for the Built Environment. To tackle this, the Built Environment Women’s Network, in collaboration with Tshwane University of Technology , hosted an event focusing on empowering underprivileged female students. The event featured a hygiene products drive and networking opportunities, aimed at enhancing women’s career prospects and advocating for greater inclusivity. This initiative underscores the need for ongoing efforts to address gender disparities in the sector.

Contact: Peter Wallis

Investment, Finance & Accountancy

Luxury brands, traditionally associated with high-end fashion or automobiles, are increasingly venturing into real estate. Companies such as Pagani Automobili , Mercedes-Benz Group AG , and Aston Martin Lagonda Ltd are developing branded residences, particularly in Miami, where luxury and brand association are highly coveted. Pagani has announced a 70-unit condo project in Miami, joining other high-profile names like Porsche Retail Group Ltd and Bentley Automotive Group in this trend. The growing appeal of branded residences reflects a shift towards combining luxury with real estate, driven by the prestige and status associated with elite brands.

The D7 visa has gained popularity among wealthy foreign nationals after Portugal’s Golden Visa Program abolished its real estate investment option to address the housing crisis. The D7 visa offers residency to non-EU/EEA nationals based on passive income, such as rental income or financial investments. With the Golden Visa's real estate route terminated, the D7 visa has become a prominent alternative for those seeking Portuguese residency. The D7 visa, valid for two years and extendable, requires applicants to demonstrate a minimum income of €820 per month.

The Saudi Real Estate Refinance Co. (SRC) has signed a memorandum of understanding with BlackRock to bolster Saudi Arabia's real estate finance market. The agreement, formalised during a visit by Saudi Minister Majid Al-Hogail, aims to enhance the real estate sector's presence in capital markets. BlackRock President Robert Kapito attended the signing, highlighting the strategic partnership's potential to bring global expertise to Saudi real estate development. This deal aligns with Saudi Arabia's broader efforts to modernise and expand its real estate sector through international collaboration.

Contact: Mitchell Dring

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