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East EU Real-Estate Developers Focus on Refurbs as Costs Jump – BNN

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(Bloomberg) —

Skyrocketing construction costs and a growing focus on the environment is triggering a shift in eastern European real-estate developers toward green refurbishment of existing buildings rather than the construction of new ones. 

Increasing demand for buildings with higher environmental profiles has already boosted returns on such assets, while transactions of real-estate without a so-called ESG rating are becoming scarce, according to Kristof Barany, Managing Partner at Adventum Zrt., which buys and manages properties in Hungary, Poland, the Czech Republic and Romania. 

“For many international institutional investors, ESG is becoming an entry threshold for investments,” Barany, whose fund manages a 600 million euros ($696 million) real-estate portfolio, said in an interview in Budapest. A rating regarding an asset’s environmental, social and governance impact adds roughly 10-25 basis points to exit yields when selling a property, he said.

Adventum on Wednesday announced that its Penta Fund bought Daimler AG’s headquarters in Warsaw for about 50 million euros. The building, developed in 2004, currently doesn’t have an ESG rating and Adventum plans to obtain one following upgrades to energy efficiency, Barany said.

Refurbishment, including insulation upgrades and the introduction of solar panels, is becoming relatively more cost efficient compared with new construction as costs spiral upwards. Inflation across the region is at or near the highest level in a decade or more, with building material prices surging even faster. 

It may also be a greener solution than razing an old building and constructing another in its place, even if the a new one is a low- or zero-emission property, according to Barany. He said 30% to 50% of a building’s lifetime emission comes during construction.

Real estate deals in the eastern part of the European Union dropped to 9.7 billion euros ($11.2 billion) last year amid the coronavirus pandemic from a record 14 billion euros in 2019, according to data from Jones Lang LaSalle Inc.

Barany said business will pick up again as the region is showing strong economic growth and the pandemic accelerates “near-shoring,” a process where companies shorten their supply chains and bring outsourcing activities closer to their headquarters, which are usually located in western Europe. 

Eastern Europe’s office market is set to become tight in two to three years as demand picks up and new developments slow due to rising costs, Barany said.

Adventum is 90%-financed by institutional investors, including German pension funds as well as Hungarian broker Concorde. The group is acquiring real estate with yields above 8% and aims to boost assets under management to 1 billion euros by mid-2022, Barany said.

©2021 Bloomberg L.P.

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Montreal real estate prices soar 21% amid lower listings, sales in November – Global News

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The Quebec Professional Association of Real Estate Brokers says November home sales and new listings fell in Montreal as prices soared by more than 20 per cent compared with a year ago.

The association says sales for the month totalled 4,402, a 17 per cent drop from 5,296 in November 2020.

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New listings amounted to 5,056, down 14 per cent from 5,848 last November.

The median price of a single-family home soared by 21 per cent compared with a year ago to reach $525,000, while condos went up by 18 per cent to hit $374,000 and plexes with two to five units had a 15 per cent spike pushing them to $725,000.

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Apart from condominiums, which saw a slight decline, the association says the median prices were also up from October 2021.

Charles Brant, the association’s director of market analysis, says he noticed a lack of supply and persistently high demand last month that placed pressure on prices and encouraged potential sellers to get into the market.

“The announcement of an earlier-than-expected rise in interest rates no doubt motivated potential sellers to advance their project in order to benefit from the sustained activity and the opportunity to sell at the best price,” he said in a statement.

© 2021 The Canadian Press

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Montreal real estate prices soar 21% amid lower listings in Nov.: brokers group – moosejawtoday.com

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MONTREAL — The Quebec Professional Association of Real Estate Brokers says November home sales and new listings fell in Montreal as prices soared by more than 20 per cent compared with a year ago.

The association says sales for the month totalled 4,402, a 17 per cent drop from 5,296 in November 2020.

New listings amounted to 5,056, down 14 per cent from 5,848 last November.

The median price of a single-family soared by 21 per cent compared with a year ago to reach $525,000, while condos went up by 18 per cent to hit $374,000 and plexes with two to five units had a 15 per cent spike pushing them to $725,000. 

Apart from condominiums, which saw a slight decline, the association says the median prices were also up from October 2021.

Charles Brant, the association’s director of market analysis, says he noticed a lack of supply and persistently high demand last month that placed pressure on prices and encouraged potential sellers to get into the market. 

“The announcement of an earlier-than-expected rise in interest rates no doubt motivated potential sellers to advance their project in order to benefit from the sustained activity and the opportunity to sell at the best price,” he said in a statement.

This report by The Canadian Press was first published Dec. 7, 2021.

The Canadian Press

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Ottawa home prices rose 19% year-over-year in November: real estate board – Globalnews.ca

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Ottawa housing prices continue to climb as 2021 draws to a close. It’s a trend real estate experts expect to continue in 2022.

The Ottawa Real Estate Board said that November’s average sale price for a condo was $432,099, while the typical residential-class home sold for $716,922. Both represented increases of 19 per cent over average sale prices in November 2020.

Though those figures represent significant jumps year-over-year, OREB President Debra Wright says that the month-to-month prices from October to November were relatively steady in the residential market and up seven percent for condos.


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“This is a far better situation than the monthly price escalations we had seen in the first quarter of 2021,” Wright said in a statement. “However, there is no question that supply constraints will continue to place upward pressure on prices until that is remedied.”

RE/MAX said in its 2022 Canadian housing market outlook last week that Ottawa average home price is expected to rise a further five per cent next year. That’s below estimates for other large markets in Ontario, such as Mississauga (14 per cent), Toronto (10 per cent) and Brampton (eight per cent).

In Ottawa as well as those other cities, RE/MAX said home prices could feel pressure as increased immigration levels further constrain supply levels.

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The OREB projects housing inventory in Ottawa is currently at a one-month supply, with the 1,430 units added to the market last month representing a 27 per cent drop from October and a 13 per cent decline from levels in November 2020.

While sales sit at “30 or so units over the five-year listing average, this is simply not sustainable and is taking us further away from the balanced market that will bring much-needed relief to potential buyers,” Wright said.

OREB members meanwhile sold 1,459 properties in November, a drop from the 1,605 seen in the same month last year. Sales figures were unseasonably high during this period in 2020, however, as more homes were sold in the fall because pandemic-driven lockdowns and general economic anxiety pushed demand from the usually busy spring and summer to later in the year.

November 2021’s sales volumes were still above the five-year average of 1,348 total units sold in November.

Realtors with the OREB have also gotten more involved with rentals in the past year, helping nearly 4,500 tenants find new units so far in 2021 compared with 3,120 such deals this time last year.


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Cost of housing biggest crisis outside the pandemic: Singh – Nov 28, 2021

© 2021 Global News, a division of Corus Entertainment Inc.

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