Download Total Return Forecasts Europe – Office and Retail

Real Estate Investment Market Russia
– Experiences and Expectations
Cannes, 11 March 2009
Dr Thomas Beyerle
DEGI mbH, Frankfurt/M.
Part of
Aberdeen Property Investors
Macroeconomic data
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
-1
-2
-3
12
10
8
6
4
2
0
2001
2002
2003
2004
2005
2007
2008
2009
2010
GDP (%)
Consumer Spending (%)
CPI (%)
Employment (%)
Unemployment (%)
Source: RESEARCH, 2009
2006
2011
2012
2013
Unemployment rate, %
GDP, Cons spend, CPI, employment
Russia – economical overview
Macroeconomic data – comments
General view for Russia:
•
•
high GDP growth over the last 10 years
a sharp slowdown in 2009, due to:
–
–
the large drop in the oil prices
the significant tightening of credit conditions which has resulted in a falling rouble and rising
interest rates.
Medium-term view:
•
a strong rebound in Asian economies by 2010/2011 would lead to another period of
rising oil/commodity prices, which will benefit Russia
Property Market
Russia – largest country of the world (space)
Main investment universe
St. Petersburg
Moscow
Aberdeen Property Investors
15 Ulitsa Chapaeva
197101 St. Petersburg
Newspaper headlines
Government aid for real estate market – new
projected cities
Handelsblatt, 17 October 2008
Moscow is developing to a
tenant dominated market
THOMAS DAILY, 30 January 2009
Building freeze for Europe‘s
highest office tower in Moscow
FAZ, 23 November 2008
Partner of ECE puts shopping center projects
on hold
THOMAS DAILY, 19 November 2008
30 %-decrease in residential
use
THOMAS DAILY, 19 November 200/8
Hotel market transferred from luxury
class to middle class in Moscow
Allgemeine Hotel- und Gastronomiezeitung,
22 November 2008
Market Entry Model – Russia in global comparison
High risk
market entry
conditions
Degree of maturity – Europe
Proceeding
degree of
maturity
Source: RESEARCH, 2009
Global office market cycle
Rental level
Recovery Phase
Correction
Growth
phasephase
Downturn phase
Vacancy peaking
Decreasing vacancy
Supply shortage
Increasing vacancy
Further fall in rents
Rental growth picking up
Strong rental growth
Falling rent levels
Decrease in construction activity
Construction activity picking up
Increasing construction activity
Construction activity high but falling
Prague,
Milan
Berlin, Stuttgart, Vienna
Istanbul
Dallas
Hong Kong
Athens
Bucharest,
Calgary,
Cologne,
Copenhagen,
Düsseldorf,
Frankfurt,
Hamburg,
Helsinki,
Melbourne,
Munich,
Rome
Atlanta, Brussels, LA, Moscow, New
York, Oslo, Paris
Amsterdam, Barcelona,
Boston, Chicago,
Luxembourg,
Madrid, Warsaw
Sofia,
St. Petersburg,
Stockholm,
Washington
Detroit
Jakarta
Philadelphia, Seoul
Beijing
Shanghai
Singapore
Mumbai
Osaka
Tokyo
Las Vegas
Source: RESEARCH, 2009
11
Rents Europe (prime) – annual change
Europe office
yoy in %
Europe retail
Europe Industrial
10
8
6
4
2
0
2005
2006
2007
2008
2009*
2010*
2011*
2012*
2013*
-2
-4
-6
-8
-10
-12
* Forecast
Source: RESEARCH, 2009
12
Rents (prime) – Moscow, St. Petersburg
Moscow
in USD/m²
St. Petersburg
1600
1400
1200
1000
800
600
400
200
High rental increase
Decrease until 2010
0
* Forecast
2004
2005
Source: RESEARCH, 2009
2006
2007
2008
2009*
2010*
2011*
2012*
2013*
13
Increasing NIY (Q2 2007 - Q4 2008)
250
Increase in prime yields since Q2 2007 (% points)
200
150
100
50
0
Paris
Frankfurt
Quelle: RESEARCH, 2009
Munich
Amsterdam
Milan
Madrid
Stockholm
London
Moscow
14
Office Yields (prime) – Europe
Europe office
yoy in %
Europe retail
Europe Industrial
12
10
8
6
4
2
0
2005
2006
2007
2008*
2009*
2010*
2011*
2012*
2013*
* Forecast
Source: RESEARCH, 2009
15
Office Yields (prime) – Europe, Moscow, St. Petersburg
Europe office
in %
Moscow
St. Petersburg
16
14
12
10
8
6
4
Russia high yield level:
increase until 2010
2
0
2005
2006
2007
2008
2009*
2010*
2011*
2012*
2013*
* Forecast
Source: RESEARCH, 2009
16
Investment market structure – Russia
Development of commercial property sales – Moscow
Investment Volume(right)
in million USD
6800
Deals (left)
number
60
6600
50
6400
40
-24 % Deals
6200
30
6000
20
5800
-12 % Volume
10
5600
5400
0
2007
Source: Real Capital Analytics
2008
18
Commercial Property Sales by user types 2008 – Moscow
Apartment
Industrial
Office
Retail
Hotel
Dev. Site
5,2%
0,3%
34,5%
30,1%
Total:
5,805 in million USD
5,7%
24,2%
Source: Real Capital Analytics
19
Commercial real estate capital market – Russia
Commercial banks & other lending institutions
Property company corporate bonds
Quoted property companies
Private property vehicles
Private property companies and individuals
1%
30%
Total:
31.63 in billion EUR
63%
5% 1%
Source: DTZ, Money into Property 2008, figures 2007
20
To sum up: Crisis? What Crisis?
Back-up
SWOT analysis Moscow from investor's view
Strengths
Weaknesses
Opportunities
Threats
•
•
•
•
•
•
most important economical centre of Russia
GDP growth
increasing income - low taxes
high returns in European comparison
high rent level in office and retail sector
since 2001 purchase of land by foreigners possible
• relatively small office space inventory (lack of liquidity)
• lacking product availability of office and retail space of international standard
(Class A and B, shopping centres)
• low transparency and lack of data availability
• strong corruption; value of 2,5 (0 = very strong; 10 = none) on the CPI-Index 2006
(Germany: 8,0)
•
•
•
•
•
further maturation of the markets
positive economical development
retail-relevant pent-up demand of the Russian people
building of offices and shopping centres of international standard
diversification potential for investors
•
•
•
•
•
legal and fiscal conditions: e. g. letting of building sites
legal certainty for foreigners
more legal restrictions of the City of Moskow
decreasing level of rents
lacking market maturity of Emerging Markets
GDP (real) – annual change
in %
Asia Pacific
Emerging Europe
Eurozone
Germany
Japan
USA
Russia
10
Russia – above
average
8
6
4
2
0
2005
2006
2007
2008
2009*
2010*
2011*
2012*
2013*
-2
-4
Source: RESEARCH, 2009
24
CPI Inflation – annual change
Asia Pacific
in %
Emerging Europe
Eurozone
Germany
Japan
USA
Russia
16
Russia – high
CPI
14
12
10
8
6
4
2
0
2005
2006
2007
2008
2009*
2010*
2011*
2012*
2013*
-2
Source: RESEARCH, 2009
25
Consumer Spending – annual change
yoy in %
Asia Pacific
Emerging Europe
Euroarea
Germany
Japan
USA
Russia
14
Russia – above
average
12
10
8
6
4
2
0
2005
2006
2007
2008
2009*
2010*
2011*
2012*
2013*
-2
-4
Source: RESEARCH, 2009
26
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Part of
Aberdeen Property
Investors
phone:
0049 (69)-768072-0
E-Mail:
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Internet:
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fund within a financial year and thus includes all charges and costs incurred in connection with the fund investment, except
for transaction costs and front-end load, if any.
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Forward-looking statement disclaimer – Forecasts are to be understood as examples which are based on certain
assumptions that are considered realistic. We cannot guarantee that the underlying assumptions will actually occur nor can
we accept responsibility for deviations due to changes in the legal bases and in economic developments.