SM Investments Corp. (SM) and its property units sought a trading halt at the Philippine Stock Exchange, fueling speculation that the group will announce a merger of its real estate assets that will create the country’s largest developer.
SM executives including SM Investments Vice Chairwoman Teresita Sy-Coson have said previously a decision to merge will be known this year. The voluntary trading suspension is most likely about the group’s decision to combine its property assets, said Rico Gomez, fund manager at Rizal Commercial Banking Corp., and James Lago, analyst at PCCI Securities Brokers Corp.
Sy-Coson couldn’t immediately be reached for a comment at her Manila office. SM Prime Holdings Inc., the company’s mall developer, said in an e-mail invitation a briefing will be held today at 1 p.m., local time. No details of the event were given.
“Based on preliminary talks and initial sound-off by the group, consolidating the property assets under one umbrella is beneficial as it enhances the value and strength of these ventures,” said Gomez, who helps manage $2.8 billion at Rizal Banking in Manila. “This has to be confirmed once details of the merger are finalized.”
Manila-based SM Investments, the holding company of Philippine billionaire Henry Sy, owns the nation’s largest shopping mall operator SM Prime and residential tower builder SM Development (SMDC) Corp. SM Prime and SM Development are two of Sy’s four publicly-traded developers, with a combined market value of 484.4 billion pesos ($11 billion), more than Ayala Land Inc. (ALI)’s 464.2 billion peso capitalization.

Rationalizing Business

SM Investments fell 4.4 percent to 1,119 pesos yesterday, while SM Prime sank 2.5 percent and SM Development lost 4.2 percent.
SM Investments’ other listed property companies include Highlands Prime Inc., a builder of a mountain resort south of Manila, and Belle Corp., which is building a Manila casino resort complex with Melco Crown Entertainment Ltd. The company’s property assets include hotel resorts, offices, convention centers, a 16,000-seat sports arena and a 6,000-hectare beach and mountain resort in Batangas, a province south of Manila.
Belle, which wasn’t suspended from trading, fell 0.6 percent to 6.24 pesos as of 11:24 a.m. in Manila trading.
“This consolidation is clearly intended to rationalize the group’s property business ,” said Lago, head of research at Manila-based PCCI Securities. “On the one hand, you have property sales that are explosive and volatile and rental income, at the other, which is steady and predictable.”
Sy, who migrated from China in 1936, has an estimated net worth of $16.3 billion as of yesterday, according to the Bloomberg Billionaires Index. He ranks 45 in the list.

Almost half of the U.K.'s £198 billion ($303 billion) in commercial property loans can't be refinanced due to declining property values and the struggling economy, a new study concludes.

Based on terms available in today's lending market, about £92 billion of bank loans would likely not meet standards for refinanced, according to a survey of 78 lenders conducted by De Montfort University.

The weakening economy and declining capital values are making lenders more cautious, said Bill Maxted, who wrote the report with Trudi Porter, said in a statement. "The situation with many existing problem loans was deteriorating." 

With almost a quarter of all property loans in "severe distress," lenders cut U.K. commercial property lending by 7.7 percent last year, according to Bloomberg. 

As the U.K. suffers from a weakening economy, many analysts are studying the performance of the property market.

For more than half of the loans issued during 2007 and 2008--when property prices were at a peak--lenders may have to adjust loans to reflect current property values, Bloomberg reports. At the same time, competition from German and U.S. lenders such as Wells Fargo and Morgan Stanley are forcing lenders to lower their rates.  

The survey found almost £45.5 billion of loans have to be repaid this year and more than 70 percent of all commercial property loans will be due in the next five years, according to the study.  

This was the second consecutive year when no lender was willing to finance developments without companies pre-committed to lease space, according to the survey's authors.

South Korea's Mirae Asset Global Investments has purchased a 31-story office tower in Chicago, marking its first investment in the city.

The fund paid $218 million for the tower at 225 W. Wacker, which is located in Chicago's West Loop. The seller was 225 West Wacker Acquisition Company.

Jones Lang LaSalle, which managed the deal, also arranged $115 million in acquisition financing through Principal Real Estate Investors and Allianz Real Estate of America, who provided the 5-year loan.

The building was built in 1989 and has undergone $8 million capital improvements program "including lobby upgrades, elevator modernization, restroom and corridor renovations and an amenity floor that rivals new construction," JLL said. The 650,812-square-foot property is currently 91 percent leased to tenants including Edwards Wildman Palmer, PPM America, Merrill Lynch, CBIZ, Booz & Co., True Partners Consulting and Apple.

International investors seeking higher yields are setting their sights on Chicago, as core office assets in coastal markets are becoming more scarce and expensive," said Jones Lang LaSalle's international director Bruce Miller. "Chicago is starting to see the resurgence of cross-border investment, as evidenced by this transaction.

Headquartered in Seoul, Mirae Asset manages "$58 billion in assets globally through a diversified platform to offer market-leading franchises in traditional equity and fixed income products, ETFs and alternative strategies, such as real estate, private equity and hedge funds."

The Dubai government is imposing new earthquake standards for buildings taller than 10 stories, which could add delays and construction costs to buildings.

The regulations require that buildings be able to withstand earthquakes of up to 5.9 on the Richter scale. The new codes are effective immediately for buildings under construction and buildings that do not yet have a permit, according to a statement from the official government news service, WAM.

The new earthquake standards will add a new twist for project designers, particularly for projects already in development in Dubai, one of the world centers for tall buildings.

"These new rules will be of great concern to all those people designing and working on tall buildings in Dubai at the moment, especially those already under construction," Mark Lavery, associate director for tall buildings at the engineering consultancy Buro Happold, told the National.

"The biggest problem is likely to be the delays. It could take two or three months to re-analyze and produce the design documentation to suit the new rules, and then get a new permit from the municipality."

The announcement of the new codes follow two tremors in Iran last month that prompted evacuations of buildings in the UAE.

It is unclear how the Dubai municipality will handle address projects already under construction.

"Any delay will have clear cost implications for developers," Chris Seymour, head of property and social infrastructure at EC Harris, told the National.

The Municipality is also expected to release new codes for wind standards for tall building in the next few months.

With a rapidly ageing population, China is facing a dramatic demographic shift that is attracting overseas hospital operators and developers to the senior living industry. But despite attractive raw statistics, the industry is difficult to develop, and both overseas and local companies have struggled to find a way to make the numbers work in their favor.

There's no doubt that the figures are compelling. In 2000, only 7 percent of China's population was over 65, or 88 million people. Now, the figure has risen to 170 million, or 14 percent of the population. And research shows that by 2020 that the tally will grow to 265 million.

Only around 10 million of the senior population have an annual salary of 1.5 million or more, the level that would allow them to afford Western-style senior care facilities, estimates consultant, Bromme Cole, who specializes in senior care in China with his company Hampton/Hoerter.

After an initial surge in development from companies looking to address the demographics, it feels like "the morning after the big party," Mr. Cole told World Property Channel. "You don't feel so good, and the girl that you wake up with doesn't look so good. That's the reality of senior living now."

Several partnerships have floundered, while some promising developments, such as the General's Garden in Beijing, have struggled to attract residents. While that project's high-acuity facilities have fared very well, the rest of the development was a "lifestyle" project, and failed to draw customers. The partnership team that put it together has now fallen apart.

"The four horsemen of senior living are the cost of land, no zoning, the fact that the age group that are over 65 are children of the revolution and taught to be very thrifty, and the lack of a payer," Cole said. Many Chinese people feel their Communist government should provide senior care for free.

Overseas operators admit they've had a steep learning curve. Seattle-based Columbia Pacific struck a deal in late April to develop senior living facilities in Beijing with Beijing-based, Hong Kong listed developer Sino-Ocean Land. Columbia's Chinese subsidiary, Cascade Healthcare, is building a 110-bed facility with the developer.

"One of the things we have tried to do is to augment our skill set, which is in senior care and assisted housing," Nate McLemore, Columbia Pacific's managing director, said. "The way the market evolved in the United States, which began around skilled nursing facilities, may or may not be the way it evolves in China."

While many developers initially built huge, 1,000-bed facilities, Columbia Pacific has started small. Its first facility in Shanghai, launched in October 2012, has 100 beds over five floors. It is now targeting a second project in Shanghai.

"We're learning, and I think the market is learning and maturing as well," McLemore said. "Even in the U.S. with all our experience people think about it differently and package it differently."

Nikki Beach, which promotes "the ultimate beach clubs," will open a new club on Ibiza in July, the brand's third location in Spain and ninth globally.

Launched in Miami in 1998 by Jack Penrod, Nikki Beach clubs attempt to combine "key elements of entertainment, dining, music, fashion, film and art into one." Featuring all-white sun beds and white "teepees," the Ibiza club will be a "luxurious haven for the world's Jet-Set, VIPs and celebrity clientele to recline, dine and immerse themselves in the familiar 'Nikki Beach Lifestyle,'" according to a press release.

Nikki was named to Travel Channel's "World's Sexiest Beach Bars" list, press release proudly proclaims.

Beyond attempts to win awards for "sexiest beach bar," Nikki is rapidly developing into a recognized international brand. In addition to the beach clubs, the company now includes a clothing line, a music label and a VIP membership card program, as well as a hotel division.

 The company has a Nikki Beach hotel open in Koh Samui, Thailand, with plans to open Nikki-branded facilities in Bodrum, Turkey; Porto Heli, Greece; Phuket, Thailand; Hvar, Croatia; and Paphos, Cyprus in the next two years.

Existing beach clubs can be found in Miami Beach, Florida; St. Tropez, France; St. Barth, French West Indies; Marbella, Spain; Cabo San Lucas, Mexico; Marrakech, Morocco; Koh Samui, Thailand; and Mallorca, Spain. The company also creates pop-up locations in Cannes, Toronto and Park City during the annual film festivals.

Global investors are expected to pump almost $750 million into Miami's hotel market this year, a 12 percent increase from a year ago, Jones Lang LaSalle predicts.

More than $200 million of hotels has already traded during the first quarter, surpassing the activity in the same quarter of 2012, JLL said in a report released last week to coincide with the Caribbean Hotel & Resort Investment Summit and Hotel Opportunities Latin America conferences in Miami.

"In the year ahead, we'll likely see more hotels trade hands than last year, but the lack of big-box hotel sales opportunities will keep Miami's transaction volume in check," said Gregory Rumpel, leader of JLL's hotel and hospitality group in Miami.

The $600 million spent in 2012 featured several high-profile transactions, including the sale of such "big box" properties as the Gansevoort, which was picked up by a consortium led by Starwood Capital Group; and the Miami Beach Resort & Spa, which sold to the Chetrit Group for $117 million.

But most of the activity was in boutique hotels in South Beach and Miami Beach, where 70 percent of the high end properties are independent and unassociated with a brand. Of the total transaction activity in Miami last year, 71 percent occurred in Miami Beach, a trend JLL expects to continue.

Since 2010 REITs, private equity and institutional investors have invested $1.6 billion into Miami, JLL said.

They are lured by Miami's growing tourist numbers, with almost 50 percent of overnight visitors coming from outside the United States. Over the last 13 years Miami has experienced a compound annual RevPAR growth rate (CAGR) of four percent, "significantly higher than the top 25 U.S. markets with the exception of San Francisco," JLL reports.

In the first quarter of 2013, "Miami fundamentals have continued to follow this positive growth trend witnessing a RevPAR increase of 16.7 percent to $192, driven by 12.2 percent growth in ADR and four percent growth in occupancy during the first quarter of 2012," JLL reports.

"The market is positioned to continue to outperform national averages, further solidifying its position as one of the top investment and hospitality markets," JLL v.p. Andrew Dickey said.

Starwood Hotels & Resorts Worldwide, Inc. today announced plans for a 50 percent expansion in Latin America during the next five years, as it looks to benefits from one of the world's fastest growing vacation and leisure markets.  

The chain plans to add an average of seven new hotels each year in the region, according to a release. 
business landscape, creating strong growth in lodging demand and many opportunities for Starwood to expand in the region," president and CEO of Starwood Hotels & Resorts Frits van Paasschen said in the release.

Starwood, which entered Latin America in 1963, considers itself the largest high-end hotel operator in the region, with 72 hotels in 13 countries offering 15,600 rooms in the region.  

In the last two years, the company has opened 13 hotels in the region including its first hotel in Mexico City and Westin Playa Conchal in Costa Rica, the company's first all-inclusive hotel in the world, according to the release.  

Starwood currently has 19 hotels in the pipeline with 3,200 new rooms and expects to open 1,100 of those rooms in six hotels this year.  

As investment interest grows in Latin America, the company is focusing heavily on Brazil and Colombia.

"Latin America is emblematic of the growth we are seeing in regions around the world... there is strong affinity for all of our brands in the region across the luxury, upper upscale and mid-market segments, and we're looking to build on this interest," said Simon Turner, president of global development and acquisition for Starwood Hotels & Resorts.

The 2014 Soccer World Cup and the 2016 Summer Olympics are expected to attract tourists to Brazil, Latin America's largest economy.  

Starwood previously announced plans to focus on management-fee driven revenue in some regions, including Latin America, as it planned to sell hotels. 

Viceroy Hotel Group is planning its first hotel in Dubai, a $1 billion project the company is calling "one of its most important portfolio additions to date."

Viceroy Dubai Palm Jumeirah will be located on Palm Jumeirah, the man-made island. The hotel, which is scheduled to open in 2017, is owned by SKAI Holdings, a Dubai-based investment firm.

"This property marks our first foray into the Dubai market and is a milestone in our growth in the region," Bill Walshe, chief executive of Viceroy Hotel Group, said in a statement.

Viceroy's first project in the UAE was Yas Viceroy Abu Dhabi, which is next to the F1 race course.

Designed by Yabu Pushelberg and NAO Taniyama and Associates, Viceroy Dubai Palm Jumeirah will offer 481 guest rooms and 221 residences. About 96 percent of the homes have already been sold, Patrick Hayden, a sales consultant at Allsopp & Allsopp, the broker for the properties, told Bloomberg.

The project will also include a beach club, a 100-meter pool, children's clubs and various entertainment and sporting facilities.

After prices fell more than 50 percent in many areas from 2008 to 2012, the Dubai housing market has shown signs of recovery in recent months. Palm Jumeirah weathered the storm better than most markets, thanks to its unique location and availability of large villas, which are hard to find in Dubai.

But Palm Jumeirah was still effected by the downturn. A Trump-branded hotel planned for the waterfront was never built.

Overall, though the hotel market has been one of Dubai's strongest performing sectors, posting high levels of occupancy and room rates. 

Wyndham Worldwide Corporation has announced plans to enter the United Arab Emirates with its first property in Dubai. 

The hotel group signed an agreement with Sigma III Limited, a subsidiary of British developer The First Group, to manage the 33-story Wyndham Dubai Marina, according to a company release.

"I have no doubt that Wyndham Dubai Marina will be another superb addition to the brand, which we are already growing in key cities throughout the Middle East," said Wyndham Hotel Group chief executive Eric Danziger, said in the release.  

The Dubai Marina tower, which is still in development, will offer 497 guest rooms, 6,800-square-feet of restaurants and bars and 2,500-square-feet of leisure facilities. It is expected to open within the next three years, the hotel group says.  

The Wyndham Hotel Group already has more than 30 hotels with more than 6,100 rooms in the Middle East. Recent additions include the Wyndham Grand Regency Doha, which opened in 2011.

In addition to the Dubai Marina property, the hotel group has also announced the development of Wyndham Grand Manama and Wyndham Grand Riyadh, both expected to open by the end of next summer.  

Wyndham is not alone in expanding in Dubai. Earlier this week Viceroy Hotel Group announced the development of its first property in Dubai, scheduled to open in 2017. 

Norway's oil fund has dramatically increased its property acquisitions in recent months, as it looks to establish itself as a key player in the real estate world. 

In the six months to March, the world's largest sovereign wealth fund increased its purchase pace for property assets by more than 10 times from a year before, according to the Financial Times. 

The fund now has almost NKr37.6 billion ($6.5 billion) of property assets, representing 0.9 percent of the total $720 billion fund. That's up from NKr11.2 billion last September, when property assets represented only 0.3 percent of the fund, the FT reports.

So far, the Norwegian Pension Fund Global Fund has mostly focused on buying commercial and office properties in Switzerland, France, Germany and the UK, according to IPE. The fund also took over Credit Suisse's headquarters complex in Zurich, bought a stake in Sheffield shopping center Meadowhall and spent €2.4bn on European warehouse and industrial property, according to the FT.

At the end of last year, the fund announced it was entering the U.S. real estate market. It recently agreed to a $1.2 billion joint venture with TIAA-CREF to buy five office properties in major U.S. cities, reports IPE.

In 2010 the fund announced plans to invest 5 percent of its money in property assets. The expectation is that the fund's strategy will allow the 5 percent to be reached within a few years, according to the fund's chief executive, Yngve Slyngstad. 

"The key to realizing the higher return is to adhere to the strategy also in times of heightened uncertainty, as we did through the financial crisis in 2008 and 2009," Mr. Slyngstad told the FT.

As the fund continues to grow, the same 5 percent now equals more than NOK200 billion, leading to speculation of when the five percent will actually be reached. 

However, the oil fund has already established itself as a major property investor. It stands out by investing in large, co-investment deals, including the management of the UK Crown Estate, the Queen's property portfolio.

Direct investment in global real estate hit the highest level since 2008 in the first quarter, led by a surge in investment in Asia Pacific commercial property.

More than $27 billion was directly invested in Asia Pacific commercial real estate in the first quarter, a 26 percent increase from the same quarter of 2012, according to the last capital flows report from Jones Lang LaSalle. Of the total, $20 billion came from domestic deals, while cross-border transactions in the region slipped 24 percent from a year earlier.

Japan is the "one [market] to watch," said Stuart Crow, head of Asia Pacific capital markets at Jones Lang LaSalle. Investment in Japan property rose to $10.6 billion, up 32 percent year from a year ago and 38 percent from the previous quarter.

The dramatic increase in Japan reflects "a broad improvement in sentiment across the economy, with consumer confidence at a five year high and a weaker yen that will help to support the large export market," Jones Lang LaSalle reports.

"We expect a lift in investment activity in the country, as positive signs are emerging following announcements about stimulus measures targeted at reflating the Japanese economy," Mr. Crow said.

JLL attributed the overall increase in Asia Pacific real estate to continued quantitative easing, which has increased liquidity and reduced the cost of debt in Asia. Asia Pacific investors increased their overseas commitment to property to $2.6 billion, a 45 percent increase from a year ago, focused primarily on office and hotel assets in Paris and London.

"We maintain our expectation of an increase in transaction volumes in Asia Pacific to USD110 billion for 2013, which will be about 12 percent up on last year," said Stuart Crow, head of Asia Pacific capital markets at Jones Lang LaSalle.

Transactions in Hong Kong rose to $3.3 billion, a 68 percent increase from a year ago.

Overall, global volumes of direct property investment hit $105 billion for the first quarter, the highest first quarter since 2008. "The weight of money chasing real estate has increased significantly," JLL said.

A new master plan has been submitted for the long-delayed redevelopment of Convoys Wharf, the 18.6 hectare project in Deptford, London. 

The new plan by Terry Farrells will include 3,500 new homes, three public parks, 12,000 square meters of stores and 10,000 square meters of artistic and cultural space, according to BD Online. 

Originally Henry VIII's royal shipyard, the highly publicized project will be dominated by a 48-story residential tower.

The new plan will also include Raleigh River Gardens, a floating river park connected to land by a series of jetties. The park is named after Sir Walter Raleigh, who, according to legend, laid down his cape for Elizabeth I when she visited the docks. 

The Grade II-listed Olympia warehouse, built on the site in the 1840s, will be transformed into a cultural destination, the paper reported.

Driven by potentially high returns, U.S. investors are increasingly targeting funds that invest in foreign commercial and residential property.  

During the first quarter of 2013, investors put $2.6 billion into mutual and exchange-traded funds that invest in offices, hotels, and other foreign commercial properties, the largest number since the record $5.3 billion during the first quarter in 2007, Reuters reports.  

In 2012, Americans directly invested $38.71 billion in foreign commercial properties, an increase from the $32.8 billion the year before, according to Real Capital Analytics.  

"The big plus is diversification of your portfolio, number one," New Jersey's public pension funds chief investment officer Timothy Walsh told Reuters. "Number two, we actually think there's better returns going forward."

Investors are also attracted by the high net operating income found overseas, Mr. Walsh added.  

Overall, global commercial investment is expected to increase this year. But this is a new model for many U.S. investors. 

"The basic assumption and belief, which is still untested, is [returns] won't be super highly correlated with stocks and bonds in other countries," said Joseph Gyourko, a business professor at the University of Pennsylvania specializing in real estate, told Reuters. "It's going to be different than owning equities on the German stock exchange."

As a way for Americans to get in the foreign property game, almost 5.5 percent of 401(k) retirement funds now offer a global real estate fund as an option, up 30 percent since 2007, according to San Diego-based retirement firm Brightscope. 

 
New York-based Jenel Management has purchased the Beverly Hills offices of Giorgio Armani from GLL Real Estate Partners, a Munich-based fund.

No sale price was disclosed for the 18,205-square-foot retail and office building at 9533 Brighton Way, which occupies one of the largest storefronts in Beverly Hills, spanning more than a half-city block. 

Originally built in 1930, the building underwent renovations in 1991 and 2001, according to a statement from Jones Lang LaSalle, which handled the transaction.

Central London's commercial property attracted more investors in 2012 than the rest of the U.K. for the first time, according to DTZ. 

Commercial property investments in the U.K. capital last year totaled a record 16.1 billion pounds ($25 billion), a 48 percent increase from the previous year. The total represented more than half of the 32 billion pounds invested in the rest of the country, the consultancy reports.

Foreign investors led the interest in London. Foreign investors purchased 16 billion pounds of U.K. commercial property last year, a 61 percent increase from 2011.

"The surge in investment activity in central London can be linked to very strong demand for prime U.K. assets from foreign investors...London offers large lot sizes and liquidity," Ben Burston, head of U.K. Research at DTZ, said in a report.

Real Estate News | North America Commercial News

A conflict is looming between small business owners and their bank lenders.  About $276.2 billion of nonresidential commercial property loans will be due in 2013, more than any other year, according to data from commercial-mortgage research firm Trepp LLC.

Many small business owners who bought their property are facing balloon payments and banks are showing an increasing willingness to foreclose, the Wall Street Journal reports.

"So many small businesses have lost their reserves during the recession," Brent Case, president of Coldwell Banker Commercial Atlantic International Inc., told the WSJ. "They don't have that chunk of cash that banks want as a buffer."

The majority of the loans coming due were made before the financial collapse in 2008. Lenders normally reevaluate loans every five to 10 years, choosing to either renew the loans or ask to have the loans paid off.

During the crisis, some loans were due but banks were willing to grant extensions, delaying the refinancing process. About 60 percent of commercial property loans that were due were granted extensions, according to the Wall Street Journal.

Now those extensions are running out, but many small businesses who own commercial property are short on cash and are still recovering from the down turn, making them less favorable to lenders. 

As of last summer, almost one in three loans expected to be due through 2016 were under water, according to a Trepp estimate.   "Roughly 20,000 small commercial properties...are facing distress in the next 12 months," Phil Jemmett, chief executive at Breakwater Equity Partners, told the WSJ. "We expect similar numbers in the next three years, and then it will taper off after 2016."

Overall, analysts are not worried about commercial properties experiencing a complete collapse.  In January a report found 60 percent of $399 billion of troubled commercial properties tracked since 2008 have been purchased by a third-party investor or refinanced, the WSJ reported.  This falls in line with the ULI/E&Y (Ernst & Young) Real Estate Consensus Forecast that reports confidence rising in U.S. commercial markets.
   
However, this positive outlook applies less to small businesses. With so many loans due in the near future and lenders scrutinizing loan applications, foreclosures could rapidly increase in the coming years.

The Industrial Trust sold Hartlebury Trading Estate, a 180-acre industrial property complex located about 130 miles northwest of London, to Schroder Life Fund for £46.5 million.

Hartlebury Trading Estate is Worcestershire's largest industrial property. It has a total floor area of 1.4 million square feet with 182 units. There are about 85 tenants including TNT, Fedex, Forest Garden and Just for Pets.  
The assets of the Industrial Trust, a multi-let industrial fund, were handled by Valad Europe.

"Prior to identifying a purchaser for Hartlebury Trading Estate, we completed a comprehensive programme of intensive asset management and a rolling property maintenance plan which reduced the void on the estate by 60 percent in the last 12 months," Rob Howe, Valad Europe's head of U.K. Real Estate, said in a statement. "Intensive management of this kind is only achievable with local teams of asset managers who have the requisite level of skills and local knowledge about both the assets and the occupier market."
 

The government of Abu Dhabi is creating a financial free zone on Al Maryah island, hoping to lure international companies away from similar financial centers in Dubai, Qatar and Bahrain.

The Abu Dhabi World Financial Market will offer companies a variety of incentives to set up offices in Al Maryah, including the ability to operate without a local business partner, easily ship money out of the country and work under international laws.

It would be a direct competitor to the nine-year-old Dubai International Financial Centre, a 90-minute drive away, which successfully developed Dubai as a center for the regional financial community. Among other advantages, the DIFC established its own court system, which has won praise for bringing Western-style legal proceedings to disputes within the financial center's jurisdiction.

The Abu Dhabi World Financial Market will officially brand the 114-hectare Al Maryah development as the capital's financial center. Formerly known as Sowwah Island, the project is home to the new headquarters for the Abu Dhabi Stock Exchange.

"I can tell you that all the local Emirati investors are talking about [the financial zone]," Fathi Ben Grira, the chief executive at Menacorp, told The National. "All the big international financial institutions would love to be in Abu Dhabi, because of its stability. There is a general perception that they can seize opportunities in terms of business."

The competition for international financial companies has intensified in recent years, with Bahrain and Qatar aggressively pursuing Middle East operations. Abu Dhabi and Dubai both offer several free trade zones, but Dubai has been the leader in attracting the regional finance and banking industry.

"I don't think [the Abu Dhabi World Financial market] necessarily is competition for the DIFC," Kai Schneider, a partner at the law firm Latham & Watkins in Dubai, told Dow Jones. "If you use Europe as a model, there's room for more than one financial center in a region and each financial center can focus on a separate sector of financial services. London is asset management, Luxembourg is where funds are domiciled and Ireland is where they're administered."

The specifics of the Abu Dhabi zone still need to be worked out, industry observers note.

"For now the first steps have been taken to build a legal and regulatory framework," Nick Clayson, a partner at the law firm Norton Rose in Abu Dhabi, told Dow Jones. "But it's not clear whether any particular laws, regulations or the judicial position will be the same as the DIFC."

U.K. house prices increased the most in 18 months on an annual basis in May as the recovery in the market for residential property gained momentum, Nationwide Building Society said.
Prices rose 1.1 percent from a year earlier, the most since November 2011, the Swindon, England-based customer-owned lender said in an e-mailed statement today. They climbed 0.4 percent from April to an average 167,912 pounds ($254,000).
“The housing market is gradually gaining momentum,” Robert Gardner, chief economist at Nationwide, said in the statement. The economy and credit policy “provide reasons for optimism that activity will continue to gain momentum in the quarters ahead,” he said.
On a three-month basis, prices rose 0.4 percent, down from 0.5 percent in April, though this “smoother measure of the underlying trend” has shown growth since October, Nationwide said.
Central bank officials extended the FLS by a year to January 2015 last month. In their quarterly forecasts published May 15 they raised growth projections for the next three years and lowered their expectations for the peak in inflation, indicating a squeeze on consumers may be easing.

U.S. commercial property prices hit record levels last month, a new report suggests.

Green Streets Advisors' commercial property index moved one percent higher than the record achieved in August, 2007, fueled by low interest rates and "modest economic growth." The index rose one percent in April, after a two percent increase the month before, Bloomberg reports.

"It's likely we'll see more gains," Green Street analyst Peter Rothemund said in the statement. "Real estate continues to be attractively priced relative to the returns on offer in the bond market."

As confidence rises in U.S. commercial markets, investors looking for higher returns than those available from bonds are increasingly purchasing office and apartment properties, industrial buildings, malls and retail centers, according to Bloomberg.    

California-based Green Street bases the index on approximate value of portfolios of REITs which usually own high-quality properties. Not all studies agree about the levels of overall prices.

In February, the Moody's/Real Capital Analytics Commercial Property Price Index released in April was 20 percent less than a 2007 peak, Bloomberg notes.

Home prices in Hong Kong could drop as much as 25 percent in the next two years, as new government regulations and rising mortgage interest rates impact the market, analysts say.

Sanford C. Bernstein offered the most pessimistic forecast, predicting a 25 percent decrease in prices as new apartment sales will "remain largely subdued" in upcoming months.

As reported previously, many industry observers believe the Hong Kong boom may be over. New government regulations, including a 15 percent tax on purchases by foreign buyers, is expected to finally put an end to one of the largest run-up in property prices in the region. Despite the global economic crisis, Hong Kong prices have more than doubled in recent years.

But not all analysts agree on the extent of the drops.  UBS Investment Research predicts home prices will fall only 5 to 10 percent this year.

"We don't think home prices will drop as much as others have predicted because the supply problem is not yet solved," UBS head of Hong Kong and China property research Eva Lee told the South China Morning Post.

Deutsche Bank forecasts prices drops as much as 20 percent over the next two years, while Macquarie expects home prices to fall 10 percent this year.

But there are a wide range of opinions about the fate of the market. Puru Saxena, a Hong Kong money manager, recently noted that Hong Kong prices have fallen by 50 to 60 percent in previous boom-bust cycles. The current bubble in Hong Kong is "even bigger than the bubble we saw in the U.S."

Five years after the economic crash, the timeshare industry posted another year of upbeat sales in 2012, defying naysayers who predicted the business would fade in the wake of the economic crash.

Total timeshare sales increased to $7 billion for 2012, up 7.6 percent from 2011, according to preliminary data from Ernst & Young, presented this week at ARDA World, the annual trade show for the industry. While still far below the $9.7 billion in sales in 2008, industry executives are proudly boasting of the resilience of the shared-ownership market.

"Some of the things we had to give up, we learned we could do without," said Don Harrill, chief executive of Holiday Inn Club Vacations and chairman of the American Resort Development Association. "We had to readjust strategies and maybe lose our egos."

The news from ARDA World wasn't as good for the fractional and destination club industry, which focuses on selling shares in vacation homes. Sales volumes continued to fall, hitting $497 million in 2012, compared to $552 million in 2011, according to data compiled by Ragatz Associates.

At the peak in 2007, fractionals and clubs--which allow the customer to buy a slice of ownership in a property, instead of a set block of time--generated $2.3 billion in sales.

With the prices for vacation homes depressed around the world, the value proposition to buy a share of a unit is a tougher sell, said Richard Ragatz, president of Ragatz Associates.

"It's been an awful five years," Mr. Ragatz said, emphasizing that he believes the model will take hold when prices for vacation homes rise again.

"I feel there is a lot of pent up demand," he said. "People continue to appreciate the concept."