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Real estate: “It has to be a professional environment” – Delano.lu

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Luxembourg’s property market is under pressure and so are the country’s real estate agencies. A pending lease reform could exacer­bate a shortage of business in an oversaturated sector, says Jean-Paul Scheuren, president of the Chambre Immobilière.­ 

Delano: How has the pandemic disrupted ­business in real estate?

Jean-Paul Scheuren: There are restrictions; you have to take precautions and organise differently. There are fewer visits, which means that you must have a better digital presence than before. This is what we’re seeing: better photos and films, data presentation. You only visit with people who are really interested. On the side of the developers, we are seeing delays in getting permits, which will contribute further to problems of demand.

Has there been less demand because of the pandemic, taking some of the pressure out of the market?

People seem to be selling less. They aren’t entering the market. But the ­market is still there. For investors, it’s a secure asset. People buying for themselves have had time during the pandemic to think about their situation. People are going more into the countryside. They don’t necessarily want to live in Luxembourg City, but see some green and have the opportunity to get outside. We see a rush on these projects.

A reform of lease agreements proposes to split agency fees between owners and tenants. What risks does this pose for real estate agents?

This is happening at the worst moment. There already is a lack of mandates and that also means a lack of revenue for ­brokers. We see people really struggling financially. Everybody thinks that ­brokers are gold diggers but getting rich quick doesn’t exist. When you start splitting the commission, it risks that owners say they are going to do it themselves. Or rents will get even higher, because ­owners will put the financial burden on the tenant. It’s a political message to try and find someone responsible for the market ­situation. We recognise that there is a real problem with prices, but everything on the table right now isn’t a solution.

If there are too few mandates, you could also say there are too many agents.

There are too many. There are 1,000 agents getting their permit every year. We don’t need more than 150 or 200. The market cannot absorb them. This has to stop. We don’t want people with no training, delivering a bad service. It has to be a professional environment. We are ­working on an academy and our objective is to have more professional entities. If you only see the commission, then you should be doing a different job.

Where do you see the role of the chamber to act as an intermediary and a place where people can lodge complaints against agencies?

For ten years now, we have a disciplinary commission where you can make complaints against members or even non-members. Professional rules should be applied. The commission is composed of one lawyer and two assessors coming from the profession. We also started a ­working group on controlling agencies. In one of ten cases analysed, the agent doesn’t even have a permit. We are still only a business federation. But more and more, people are realising that we must do something to control access to the ­market and control what is happening on the market.

What do you see as the biggest ­challenge for 2021?

It will be very difficult to estimate how the prices will develop. It will be very interesting to see where the market goes. Digitalisation is a big challenge, but the biggest challenge is to come back to our role of intermediary between the buyer and the seller, and this works best when you separate them, when the buyer and the seller both have a broker to reach the best solution for both parties. This will be the future of the market.

This interview was first published in the April edition of Delano. To subscribe, visit the Maison Moderne shop.

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Credit 'Zombies' on the Rise as Real Estate Firms Lead Charge – BNN

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(Bloomberg) — The walking dead of the corporate world are multiplying — and the property industry sustains the most.

A new study on companies that have dodged default for years, even though they don’t have enough money to pay interest, comes just as markets from Hong Kong to New York are roiled by real-estate giant China Evergrande Group’s showdown with its creditors. 

Consultancy firm Kearney found their numbers have expanded by 9% globally in the past decade, in part because loose monetary policy has allowed them to keep rolling over debts. 

While “zombies” have been on the rise since the last financial crisis, the pandemic looks likely to bolster their ranks, with more companies seeking waivers after taking on unsustainable piles of debt when economies were shuttered.

The OECD defines zombie companies as those that have been trading for more than 10 years and have been unable to cover their interest burden from their operating revenues for three consecutive years. 

Kearney studied records of 67,000 listed companies from 152 countries. It found:

  • 7.4% of real-estate firms were zombies
  • 5.9% of healthcare
  • 5.5% of telecommunications and media
  • 5.1% of travel and tourism

Within retail, online retail had a slightly bigger share of zombies than brick-and-mortar counterparts, potentially due to the low profitability of online players, according to the report.   

Europe

At least 5 issuers are offering debt on European markets on Thursday, with new issuance volumes of at least EU2.25 billion-equivalent.

  • Bank of England voted to keep bond-buying target and interest rate benchmark unchanged at a record-low 0.1%
  • Ashmore Group Plc’s Jan Dehn is set to leave the firm, ending a 16-year stint at the emerging market-focused money manager
  • SMCP’s majority shareholder, European TopSoho’s, failed to redeem at maturity EU250 million 4.0% bonds exchangeable into SMCP shares

Asia

Financial regulators in Beijing issued a broad set of instructions to China Evergrande Group, telling the embattled developer to focus on completing unfinished properties and repaying individual investors while avoiding a near-term default on dollar bonds.

  • Global investors will focus on China Evergrande Group’s $83.5 million interest payment due Thursday on a five-year dollar note
  • The People’s Bank of China pumped in 110 billion yuan ($17 billion) of cash with seven- and 14-day reverse repurchase agreements.
  • Four Chinese firms were offering dollar bonds Thursday, ending a three-day lull in the Asian credit market amid holidays and concern about contagion from the distressed property giant Evergrande

U.S.

Federal Reserve Chair Jerome Powell said there is little direct U.S. exposure to debt of the Chinese company Evergrande but said it could impact global financial conditions

  • Powell said the Fed could begin scaling back asset purchases as soon as November and complete the process by mid-2022
  • The takeover of medical supply company Medline Industries Inc. is being funded by the largest leveraged buyout loan in three years
  • A gauge of volatility in the $4 trillion market for state and local-government debt has tumbled to just shy of a record low set in early January

©2021 Bloomberg L.P.

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Record-breaking real estate: North Saanich property sells for nearly $23M – CHEK

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The sale of a multi-million dollar listing in North Saanich is shattering any previous record for highest house price on Vancouver Island.

For $22.75 million, the Lawrence Road property includes a 13,000-square-foot home with eight bathrooms, six bedrooms, a two-storey study, a detached yoga studio, an infinity pool, tennis court, gym — even an underground wine cellar.

The president of the Victoria Real Estate Board, David Langlois, said the property is unique.

“You are looking at a very high-end, very interesting property that is going to offer features that you simply can’t find anywhere else,” he said.

It also comes with its own detached two-bedroom guest cottage.

“It’s significant in that it’s certainly the largest recorded sale that we’ve seen in our marketplace,” Langlois said.

“We do have a lot of really valuable real estate throughout the Greater Victoria area. We’ve got lots of private islands, and lots of estate-like settings. It’s not surprising.”

In June, a property in Metchosin sold for $12 million. It sits on 67 acres and a stream runs under parts of the 10,000-square-foot home.

WATCH: Luxury home with stream running through it sets real estate record in Greater Victoria

At the time, it was the highest price ever paid through the Victoria Real Estate Board listings.

Tina Ireland, a regional assessor with BC Assessment, said there are fewer homes in the luxury market available right now.

“The luxury home market is more unique though of course, because the properties are more unique.”

With demand up for properties worth $4 million and more, so are prices.

“Last year’s assessment, we had seen a 10 per cent increase,” Ireland said. “This year I think we’ll see at least that in our assessed values.”

There have been 245 sales of homes in the $2 million category so far in 2021, compared with just 94 in the same period in 2020.

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Dubai real-estate firm DAMAC approved to take firm private – 95.7 News

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DUBAI, United Arab Emirates (AP) — A Dubai real-estate company known for its deals with former President Donald Trump said Thursday it had received regulator approval for an effort to take the firm private.

DAMAC Properties still plans to offer $595 million for outstanding shares of the company, the firm said in a filing on Dubai Financial Market stock exchange.

It said it would offer an update on the plan in the coming weeks. It earlier announced plans in June for the offer to take the company private, then withdrew them as regulators examined the plan.

The buyout would be through Maple Invest Co. Ltd., a holding company of DAMAC’s billionaire founder Hussain Sajwani. Sajwani owns nearly four-fifths of the company through various investment firms.

DAMAC stock traded up Thursday over 3% on the news. The firm has a market capitalization of over $2 billion.

DAMAC is known in Dubai for a development that features a Trump-branded golf club surrounded by villas and apartments, making it the only one of its kind in the Middle East that bears the Trump logo.

The company’s partnership with the Trump Organization to manage and run the golf course was struck before Trump’s election as U.S. president.

The Associated Press

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