From left: London, Shanghai and Paris
Every week, The Real Deal rounds up the biggest real estate news from around the globe.
United Kingdom
The future of the Tulip Tower has wilted. London Mayor Sadiq Khan denied approval for the controversial structure, which would have been nearly 1,000 feet tall. Starchitect Norman Foster and his firm, Foster + Partners, designed the bulbous building, which New York magazine derided as “Instagram architecture at its emptiest.” In Manhattan, two Foster-designed tower projects — JPMorgan’s 270 Park Avenue and L&L Holding’s 425 Park Avenue — are under way. [Surface]
London landlords are aghast at Mayor Sadiq Khan’s call for rent controls. It was part of a series of proposals that included ending “no-fault” evictions, as well as incentives for building rentals. But the real estate industry says it will discourage investment and development in the rental sector, which has seen strong demand because many Londoners can’t afford to buy homes. [Evening Standard]
Home prices are still headed for the bottom. The average sale price of detached homes in London was down 6.1 percent in May from the same month last year, according to Land Registry data. Sale prices for other types of London homes also fell, though not as sharply. Average sale prices dropped 5 percent for maisonettes and flats, 4 percent for semi-detached houses and 2.9 percent for terraced homes. But the average value of a London home still about twice the amount of a U.K. home. Meanwhile, the number of London homes listed for sale is 18 percent lower this year than last year because of a “protracted political hiatus.” A report by property portal Rightmove showed that the latest data on London home sales signal the market is “bottoming out.” [BBC, Homes & Property]
The Brexit-bludgeoned London office market can thank Parliament for a big new lease. As many as 1,000 administrative staff of the House of Commons will occupy 10 floors and 100,000 square feet in a building owned by the City of Westminster, a centrally located borough of London. Parliament will take the temporary office space near St. James’s Park station while a multibillion-dollar restoration of the Palace of Westminster unfolds through the mid-2020s. [The Standard]
Brazil
Brazil just saw its first real estate blockchain deal. Brazilian construction company Cyrela and a startup called Growth Tech completed a property sale via blockchain technology in 20 minutes. The process of selling a property typically takes about a month. Some developers and real estate groups have moved to adopt or invest in blockchain and other new technologies. The National Association of Realtors last month said it was investing in Propy, a real estate transaction platform. [ZDNet.com]
Canada
Toronto is about to see the largest mixed-use development in its history. The architecture firm behind Salesforce Tower in San Francisco has designed the 4.3 million-square-foot Union Park project in Toronto. Oxford Properties Group recently revealed the initial architectural designs for Union Park by Pelli Clarke Pelli Architects, led by Cesar Pelli, best known for Salesforce Tower and the International Finance Centre in Hong Kong.
France
One of the world’s most beautiful buildings was almost lost. New details regarding the devastating Notre Dame fire reveal major mistakes made during the first hour. A guard who was instructed to check for the fire first went to the wrong building — ultimately wasting up to a half-hour — and didn’t immediately call the fire department. While authorities have yet to determine how the fire started, the wasted time left firefighters with huge disadvantages. A small group was sent directly into the blaze in the attic in a final attempt to save the 850-year-old cathedral. [NYT]
Hong Kong, China
Unrest is driving away local investment. Affluent residents in Hong Kong are looking to international real estate markets as the U.S. trade war and local unrest continue. According to a new report by Savills, the number of inquiries about Hong Kong homes declined in the second quarter, triggering a 1.5 percent drop in the prices of townhouses. “The extradition bill caused some local money to look beyond Hong Kong, with Singapore favored, followed by the UK and Australia,” said Savills’ Simon Smith. [SCMP]
Hong Kong may see its first real estate IPO since 2013. China Merchants Shekou Industrial Zone Holdings is planning an $800 million initial public offering of shares in Hong Kong. China Merchants Shekou would be the first real estate investment trust to go public in Hong Kong since 2013, when Spring REIT raised $216 million in its IPO. [Bloomberg]
Hong Kong’s commercial property market is seeing a dip. Office rents and investment saw a decline in the second quarter, according to CBRE. Amid lagging demand for space, office rents dropped 0.6 percent in the second quarter compared with the first quarter. It marked the first decline since the second quarter of 2014. Q2 volume of commercial property sales fell to $2.7 billion, down 6.2 percent from the first quarter. That was the smallest quarterly transaction volume in three years. [Reuters]
Germany
Housing-strapped Germany is attracting investment from Chinese executives. In Munich, an executive of Huawei bought four apartments for more than $550,000 each, then rented them to other Chinese employees relocating to Huawei’s Munich research center. Despite its economic prowess, Germany has a worsening scarcity of housing in its seven largest cities, which together have one million fewer flats than they need. Last month, Berlin lawmakers passed a five-year rent freeze, hoping to tamp down the growing discontent among residents. [SCMP]
Netherlands
Deutsche Bank is settling bribery claims brought by an affordable housing company. The German financial giant, which is under investigation by two congressional committees and the New York attorney general for its ties to President Trump — agreed to pay 175 million euros ($197 million) to settle bribery allegations by a Dutch provider of public housing. Stichting Vestia claimed that some of its trading in derivatives through Deutsche Bank was “flawed” because the bank paid fees to a middleman who paid bribes to arrange trades on behalf of the Dutch company. [Bloomberg]
Turkey
The country’s economy could shrink this year for the first time in a decade. That contraction could add to interest in U.S. real estate among Turkish investors. The Turkish government has cut its own 2019 economic forecast to 2.3 percent growth amid the growing budget deficit. The country’s last economic contraction on an annual basis was its 4.7 percent decline in 2009. [Reuters]
Australia
The nation’s largest lender is looking to boost the economy. Commonwealth Bank of Australia is the latest of the country’s financial institutions to ease lending standards, according to Reuters. The bank will introduce a floor rate and interest rate buffer in line with government’s regulatory guidelines meant to stabilize home prices. [Reuters]