Hotels across Japan are performing at levels they haven’t experienced since 2019, with demand fueled by events including this spring’s cherry blossom season and the G7 Summit of world leaders in Hiroshima.
Hoteliers said the outlook for the rest of the year is good. Carlos Tarrero, general manager of The Ritz-Carlton in Kyoto, said visitors for the cherry blossom season were at pre-pandemic levels, and Kyoto is a destination favored by domestic Japanese travelers as well as international tourists.
Hotel News Now>>
Dominating discussions at the Commercial Real Estate Finance Council Europe Spring Conference in London were the potential for a refinancing “cliff” leading to distressed commercial property sales, the likelihood of banking contagion in the United States spreading to European and United Kingdom real estate, and the return of “back leverage” to boost lending returns.
The dominant topic was how banks would respond to the large amount of refinancing needed over the next year at a time when interest rates are rising and values are collapsing. The most recent Bayes Commercial Real Estate lending report found the interest-rate environment led to a very rapid increase in refinancing activity in the final quarter of last year, and borrowers refinanced early rather than waiting longer into 2023 or extending loans into 2024.
The Deutsche Bundesbank, part of the European central banking system, is largely abandoning extensive building plans in Frankfurt, with just 5,000 square meters of the originally planned 100,000 square meters in three office towers expected to be completed as the federal bank moves toward hybrid work arrangements.
Bank officials said the main reason is the agreement between the federal Board of Management and the Staff Council to allow up to 60% of working hours to be spent at home starting this month. Added to this are high construction costs and supply bottlenecks. The federal bank’s remaining space requirements are now expected to be met by converting existing buildings and constructing only one new building.
Global developer and mall operator Unibail-Rodamco-Westfield sold a prominent Versailles office building for about €95 million, part of an ongoing debt reduction strategy that includes selling off retail centers in the United States.
According to sources, Atland Voisin is the buyer of the office property known as the V building, built in 2019 and spanning more than 15,000 square meters. Along with the recent sale of Westfield Brandon in Florida, among several U.S. mall selloffs of the past year, the latest deals bring Paris-based Unibail’s total proceeds from dispositions to about €4.7 billion.
A report from a major Canadian bank and a leading research firm said investors in Toronto’s condo market, a key driver of rental supply, face increasing pressure from negative cash flow driven by rising costs.
Even today’s in-demand rental market is increasingly not covering carrying costs, according to the report from Benjamin Tal, deputy chief economist with CIBC World Markets, and Shaun Hildebrand of research firm Urbanation Inc. The year 2022 “marked a turning point towards negative cash flow that is expected to worsen in the years ahead as increasingly higher-priced new condos that were presold to investors in the past few years at the market peak reach completion in a higher interest rate environment,” the report said.
One of the largest U.S. apartment owners and managers launched a brand aimed at addressing the nation’s shortage of workforce housing that will include modular construction to keep costs down.
Officials of Charleston, South Carolina-based Greystar said Ltd. by Greystar will provide newly built housing for workers such as teachers, first responders and nurses who typically can’t afford to rent such apartments. The brand relies heavily on incorporating technology that accelerated during the pandemic to reduce operating costs at properties, allowing for lower rents.
This report was compiled from CoStar’s news publications in the United States, United Kingdom, Canada, France and Germany.