Saudi Arabia has lofty aspirations to draw millions of more tourists each year, and China could be a significant source of those visitors as international travel rebounds from the pandemic.
Jasmine Geffner, chief financial officer at Dorsett Hospitality International, said Saudi Arabia’s Vision2030 objective of welcoming 100 million visitors per year could be satisfied purely from the 10% of the Chinese population that holds a passport. Panelists at a hospitality conference in Riyadh said China had the world’s largest contingent of outbound travelers before the pandemic, and that will probably be the case again very soon.
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Swedish furniture giant IKEA is in talks to buy the Churchill Square shopping center in Brighton, England, from Abrdn’s Aberdeen Standard Property Unit Trust for a price understood to be about £175 million.
Brokerage Knight Frank came to market earlier this year with the mall, which spans 520,000 square feet and was developed by Standard Life Investments at a cost of £90 million in October 1998 in the heart of Brighton. There was competitive bidding at around £175 million with multiple parties pursuing the asset, an encouraging sign for the market after several other large shopping centers have recently struggled to sell.
Investment giant Blackstone closed its latest global real estate fund, one of the largest ever raised with an expected $30.4 billion in total capital commitments.
Kathleen McCarthy, global co-head of Blackstone Real Estate, said the New York-based firm continues to pursue investments in France and other regions despite economic tensions. “As such, while the markets are seeing a dramatic pullback of capital, with banks and other lenders becoming more conservative in their lending and equity investors becoming more cautious, for a firm like Blackstone, this dislocation creates opportunities,” McCarthy told Business Immo in an exclusive interview.
Refinancing of commercial real estate purchases in Germany made during the peak price phase from 2018 to 2021 will require significantly higher equity due to the changed market environment and lowered property valuations, according to analysts.
According to brokerage Colliers’ calculations, a debt gap of €28 billion, or 14% of the capital invested in 2018 -2021, is opening up for refinancing from 2023 to 2030. The gap figure is 17% in the office category and as high as 29% for high-street retail investments. This is also likely to slow down the transaction market because equity has to be used for refinancing instead of purchases.
One of Canada’s five largest banks expects higher interest rates, tighter lending conditions and a mild recession to depress rental revenue and lower property values across commercial real estate.
A report from Sal Guatieri, senior economist at the Bank of Montreal, noted even the once-red-hot industrial and multifamily markets have been affected by falling valuations. The apartment sector will have the benefit of strong population growth in Canada, though headwinds could translate “into less lending and higher default rates, mostly in the beleaguered office market,” the economist said.
Despite a volatile economy, investors, retailers and shopping center owners say they are optimistic but cautious about industry prospects.
Because of overbuilding in prior years, developers have pulled back and there has been very little new retail space coming onto the market, so inventory is tight. That’s helping to drive up rents, according to several brokers and landlords, even amid a growing list of retailers filing for bankruptcy or planning store liquidations in the past few months.
This report was compiled from CoStar’s news publications in the United States, United Kingdom, Canada, France and Germany.