Global Investing

Online shopping to hit UK property investors

By Stephen Eisenhammer

As the way we shop changes,  commercial property investors might be the ones losing out.

The rise of online retail is hitting demand for bricks and mortar shops, according to analysts at Aviva Investors, and could spell an end to rental income growth over the next two decades.

An estimated 20 percent of UK retail space will become surplus to requirements in the coming years due to shoppers using the web, according to research by the British Council of Shopping Centres. David Skinner, Chief Investment Officer of Real Estate at Aviva, reckons the trend has just gone up a gear:

The growth of internet shopping has been a key issue of commercial property investors for years but the pace and scale of change has been greater than many had anticipated

According to Skinner average real rental value growth will fall to between 0 percent and 1 percent per year throughout the next two decades.

Africa’s property laws (or lack of)

Africa’s emerging commercial real estate markets may look tempting from the outside, but will remain the preserve of those with the highest appetite for risk. A vendor carries newspapers for sale along the streets of Uganda's capital Kampala September 12, 2009.  REUTERS/Thomas Mukoya

Even the CEO of Growthpoint, South Africa’s largest listed property firm, feels the continent (excluding South Africa) is not for the faint-hearted. Those interested in investing for the longer term, like himself, are likely to remain on the sidelines for now. “We’re less convinced about the dynamics in some of these African countries. It is higher returns for that risk, but we’re not convinced that it’s enough,” says Norbert Sasse, while in London for an investors’ conference organised by Australia’s Macquarie Bank.

“We’re sceptical with those African countries further north. Nigeria, Uganda, Kenya, Rwanda etc … you’re never sure if the law protects your property rights. The law around property title is certainly nowhere near as advanced as you would get in South Africa.”

from MacroScope:

Emerging Europe property revival

People packing their bags and flying out to St Petersburg, Warsaw, and Prague this summer may not just be seeking an exotic vacation spot.

International property investors are inching back to emerging Europe, lured by prospects of higher returns in markets such as Poland, whose economy has held up relatively well in a global downturn, and Russia, which is bolstered by rising crude oil prices.

After posting strong growth for over 5 years, commercial real estate investments in emerging Europe had been a washout after Lehman Brothers’ collapse in Sept ‘08, with first quarter sales hitting a record low.