European Property Headlines

Property investors look East
● Investors heading to Russia, Ukraine and Balkan countries (Bulgaria and Romania) as competitive Czech market may lead to conservative yields
● CB Richard Ellis annual European investment report showed investment market turnover doubled this year for Central and Eastern Europe. Czech Republic’s turnover up 46%, Russia rapid rise of 1,016 % in transaction levels and Romania saw a 768% increase
● Local property development opportunities scarce with increased competition among developers
● Prague-based developers looking to foreign markets with joint-venture partners in Ukraine, Croatia, Romania and Slovakia to explore local investment opportunities.
● Regional markets opportunities growing in Brno, South Moravia, Plzeň, West Bohemia, Ostrava, North Moravia, and other smaller cities.

50 million euro real estate project in Sofia
● Greek investment fund Global Finance to build EUR 50 M Real Estate Project in Sofia’s Iztok neighbourhood
● Iztok one of the Bulgarian capital’s most expensive districts
● Project will comprise residential housing, office and commercial space

Ibex index crash signals end of Spanish property boom
● Ibex 35 index of leading shares fell 2.7% caused European market ripple with investors worried about knock-on effects.
● Stemmed from last week’s 70% free-fall of Astroc, a Valencian real estate developer whose audited accounts revealed inflated profit figures.
● Heavy debt load of real estate groups, oversupply worry 800,000 new housing stock approved vs. 600,000 estimated demand and corruption scandals negative impact on sector.
● Recent surge in Spanish home prices and low euro interest rates fuelled a real estate frenzy investors now worried a distorted economy will lead to mortgage crisis and market crash.
● Spain’s housing minister predicts a soft landing for real estate market rather than a crash, recent data showed prices in the year to March grew at their slowest rate since 1998.