Real estate analysts are warning that China may have created the largest real estate bubble in history, and that it could crash soon. China’s real estate boom has been fueled by government infrastructure spending and speculative investing by the emerging Chinese middle class. Chinese citizens have been able to purchase real estate since the 90′s but have few other options for investing. 60 Minutes recently profiled the resulting phenomenon of massive ghost cities in China, with block after block of skyscrapers sitting completely empty:
Archive for the ‘International Real Estate’ Category
This post was written by Dan Jackson, a 2012 UST MBA graduate. Dan completed many of his electives in real estate including participation in the spring 2012 REAL 714 International Real Estate Development course in the Cayman Islands.
The Big Blue Box… furniture products that are easy to assemble… cheap and affordable, yet chic items… Swedish meatballs and cheap meals are all items that remind people of the retail giant IKEA. But the retailer now wants to get you to think outside of the big blue box.
The popular Swedish home furniture products company IKEA has its sights set on expanding its well-known footprint. The next endeavor for the company, which already has a large international presence, revolves around building entire communities where people will be able to live, work, stay and play. According to the Globe and Mail IKEA is “launching a bold push into the business of designing, building and operating entire urban neighbourhoods.” The Globe continues to state that while this is a new and bold endeavor for the furniture icon they still want these new neighborhoods to have an emphasis on the traditional affordability concept that IKEA is well-known for with its furniture products model. One of IKEA’s current slogans is “Affordable solutions for living better,” and this is the type of slogan that the property development division anticipates as they move forward into the first phase of development of these new communities. The property development team wants to create communities that are beautiful, well-maintained and allow for a maximum lifestyle benefit, but yet still affordable for families and individuals. (more…)
U.S. Benefiting from ‘Being a Safe Haven’
Minneapolis has been attracting international attention from foreign investors who are looking for attractive commercial real estate assets. CoStar’s Mark Heschmeyer writes in a recent article(see below) that while New York, Washington, and San Francisco have traditionally been that first choice for foreign investors, cities like Minneapolis are now being viewed as attractive alternatives.
Global investor commercial real estate purchasing activity picked up in the second quarter with total market volumes increasing 24% from the first quarter to $108 billion, according to data collected from more than 60 countries by Jones Lang LaSalle Capital Markets Research in London.
This level of investment reverses the slight dip in activity recorded in the first quarter when volumes reached $87 billion.
REITs and unlisted funds were the second quarter’s biggest net buyers of property.
London remains the world’s most sought-after location, according to the report, with the United States moving back towards the $40 billion transactions mark in the second quarter, with 35% of deals involving cross-border parties.
While New York, San Francisco and Washington DC have long topped the target list for foreign investors, a number of second-tier U.S. cities have entered the Top 10 list for cross-border purchases into the United States, including Miami, Minneapolis and Phoenix.
“Life’s a moving target” for David Marquis, Director of Corporate Real Estate for Target Corporation. After graduating from the University of Minnesota with a degree in architecture, Marquis joined Target as a CAD store planner, and eventually moved into Target’s real estate group. His current responsibility is managing the non-retail portfolio including office and distribution space.
Target’s Canada expansion strategy, which commenced when Target acquired the leasehold interests for Zellers retail locations throughout Canada, includes launching approximately 130 new stores in 2013. The existing Zellers stores will be renovated; Target negotiated with the landlord in each case to allow the store to go dark during the renovation. Target will be hiring 35,000 new team members for its Canadian expansion. Both logistics and brand translation are important issues, namely, how to re-create the Target shopping experience with Canadian employees who have never shopped at a Target store.
As for US stores, Target is focused on two major initiatives: City Target and renovating existing stores. While a traditional store is 130,000 square feet, new City Target stores springing up in popular urban locations throughout the US will be sized at 60,000-100,000 square feet . This year Target broke ground on a historic rehab project in Chicago and will complete City Target stores in Seattle, Los Angeles, and San Francisco next year. The investment in existing Target locations will add fresh grocery departments to stores, improving Target’s convenience factor as a “one-stop shop.”