Data centres have been identified as alternative investments in real estate as the business environment continues to evolve owing to changing consumption patterns of the market.
A report by global property firm Knight Frank cites these changing consumption patterns to be the reason behind some retailers quitting the Kenyan market.
In the report documenting how the Kenyan real estate market performed over the second half of 2022, Knight Frank urges investors in industrial warehouses to rethink their business.
Just as data centres are emerging as another lifeline for investors in this sector, so is the warehouse business which the report notes that there is a demand yet what is in the market is not what is needed.
Businesses, says the report, are looking for warehouses that are renewable energy-friendly and it happens there are not so many in the market.
“Solar power is gaining popularity as the call for clean energy and the need to cut costs become critical,” reads the report titled Kenya Market Update H2 2022.
It references the Corporation for Africa and Overseas (CFAO), formerly Toyota Kenya’s acquisition of a 35 per cent stake in one of East Africa’s major providers of solar installation services, Ofgen. The firm(Cfao) has also installed solar panels in its existing facilities and will be doing the same in upcoming ones.
“The push for renewable energy has also received a boost from the government of Kenya,” adds Knight Frank noting firms like Solar One Limited which will be up and running by end of 2023 with intentions of serving some parts of the Nyanza region.
“There is a rising demand for quality industrial facilities (Grade A) since an overwhelming number of the existing stock is outdated and does not meet the threshold standards for modern warehouses.”
The report notes data centres are gradually becoming popular to investors in the sector as the demand for internet and e-business continues to shift upwards.
“Data centres provide a cheaper and more efficient IT capability than inbuilt servers. They offer cloud services and allow organisations to focus on their core functions,” the report says.
The report notes an agreement between IX Africa, a colocation data centre provider, with Helios Investment Partners, one of Africa’s leading private equities, where the latter will invest up to Sh6 billion ($50 million) to help the former continue the development of its Nairobi campus.
Icolo, another supplier of data centres, is noted to have completed their newest facility dubbed ‘MBA2’. MBA2 is in Nyali and is the second iColo data centre in Mombasa, MBA2 has a capacity of 1.7MW and 13, 000 square feet of floor space.
“Investors are always searching for the most profitable asset to invest in within their risk acceptance,” the report says.
Investment in alternative business lines like data centres and modern warehouses has become necessary when major drivers of the sector, like retail, are undergoing some adjustments.
“Supermarket chains in Kenya have had contrasting fortunes with Naivas, Quickmart,
Chandarana, and Carrefour continuing to expand while Uchumi, Tuskys, Nakumatt, Shoprite, Game Stores, and Choppies shutting down either through bankruptcy or exiting the market,” the report notes.
This, the report says, may perhaps be attributed to the low penetration of modern retail in Kenya.
“A report by Boston Consulting Group (BCG) noted that 77 per cent of retail sales are made in traditional retailers (commonly known as duka),” says the report. “This depicts the existence of a large consumer base for supermarket chains to target as the number of middle-income earners continues to increase.”
During the period, the report documents that Carrefour opened three branches – Kilimani, Valley Arcade, and Nairobi central business district (CBD) – to increase its total branches to 19 while Naivas opened seven stores in Eldoret, Nairobi West, Uthiru, Meru, and Westlands – to take its total stores to 91 and strengthening its position as Kenya’s retail leader.
Chandarana Foodplus, a family-owned retail chain, opened their latest 26 stores at Azalea Square along General Mathenge in Westlands.
Knight Frank also notes there is more potential in student accommodation and area that has not been fully exploited. This area currently is dominated by Acorn Holdings Limited(AHL) known for the Qwetu student hostels.
“Of real estate assets in Kenya, purpose-built student accommodation (PBSA) has proven to be marginally above traditional real estate classes – a trend that is widely observable worldwide,” the report says.
In Kenya, says Knight Frank, PBSA generally registers a return of about 8 per cent while prime residential attracts returns of approximately 4.0 per cent.
As investment in this sector increases, the returns may minimally fall. It is expected that in the foreseeable future, PBSA will remain more profitable as universities (public and private) struggle to accommodate the ever-increasing number of students,” the report says.
by Calculated Risk on 2/07/2023 07:48:00 PM
From Dodge Data Analytics: Dodge Momentum Index Dips in January
The Dodge Momentum Index (DMI), issued by Dodge Construction Network, fell 8.4% in January to 201.5 (2000=100) from the revised December reading of 220.0. In January, the commercial component of the DMI fell 10.0%, and the institutional component receded 4.7%.
“The Dodge Momentum Index weakened in January, after 10 consecutive months of gains. While planning activity slowed, the Index remains elevated, and the volume of projects remains steady,” stated Sarah Martin, associate director of forecasting for Dodge Construction Network. “After such strong growth in 2022, we expect the Index to work its way back towards historical norms this year, in tandem with weaker economic growth. Overall, levels of planning activity remained comparatively strong over the month — which bodes well for the construction sector.”
Weakness in commercial planning in January was broad-based, with office, warehouse, retail and hotel activity declining. Slower activity in education and amusement projects drove down the institutional portion of the Index, nullifying the impact of gains in healthcare and public planning over the month. On a year-over-year basis, the DMI remains 32% higher than in January 2022. The commercial component was up 40%, and the institutional component was 16% higher.
…
The DMI is a monthly measure of the initial report for nonresidential building projects in planning, shown to lead construction spending for nonresidential buildings by a full year.
emphasis added
Click on graph for larger image.
This graph shows the Dodge Momentum Index since 2002. The index was at 201.5 in January, down from 220.0 in December.
According to Dodge, this index leads “construction spending for nonresidential buildings by a full year”. This index suggests a solid pickup in commercial real estate construction into 2023.
You may know Don Mullen as one of Wall Street’s hardest-driving executives—or as your landlord. The son of an elevator repairman, Mullen shot through the ranks of Salomon Brothers, Drexel Burnham Lambert and Bear Stearns. During his 11 years at Goldman Sachs Group Inc., he played a key role in the company’s sale of investments backed by subprime mortgages just as the housing market crashed—part of a trade sometimes referred to on Wall Street as the “Big Short.” In 2009 he traveled to some of the US’s worst-hit communities, spending $25 million of his money to buy distressed properties, before deciding to expand it into a business. He founded Pretium Partners LLC in 2012, turning it into a $51 billion asset manager and one of the country’s largest private owners of single-family homes and rentals.
Pretium tells investors it aims to achieve percentage returns in the mid- to high-teens over a long period of time, according to Mullen. But he declines to say more because, in his words: “I’m in a highly politically sensitive asset class.” Last year, Minnesota’s attorney general sued Pretium and some related entities, saying they failed to adequately maintain rental homes in the state. Earlier this month a judge denied Pretium’s motion to dismiss. Separately, in January, a subsidiary of a Pretium-managed fund signed an agreement with Minneapolis to abide by a long list of conditions to keep its rental license. While Pretium declined to comment on those specific incidents, Mullen says his institutional model provides renters with access to better neighborhoods, service and technology and can help governments relocate people during natural disasters and other emergencies.
Cairo: Eng. Omar Attaby, CEO of Attaby Consultancy participated as a speaker in the round table at Invest Gate event entitled “Egypt’s Real Estate Market VS Economics Crises” in cooperation with the Egyptian Businessmen’s Association. The round table brought together a group of experts and decision-makers engineering sector, to look at the developments in the sector, the impact of current events on market requirements, strategic plans for growth and attracting more local and foreign investments.
In this context, Eng. Omar Attaby discussed the market challenges that rose globally and locally as a result of the economic crisis and the extent of their impact on the engineering consultancy sector. He stressed on his positive view on the current economic crises through several recommendations. His recommendations included the government’s interest in encouraging foreign direct investment by supporting investors, especially local ones and removing all obstacles to support and stimulate the sector to avoid a slowdown in the local economy.
In this context, Eng. Omar Attaby discussed during his participation in the round table how to face the current crises through sustainable financing and the opportunities it provides to achieve economic stability, which greatly benefits developers and consultants. Moreover, it supports Egypt’s direction and Vision 2030 in achieving sustainable development in all its economic, environmental, and social axes.
Attaby also highlighted the need to rely on sustainability, stressing on the use of sustainable and environment-friendly raw materials to make optimal use of them in all aspects, as they are available at an affordable cost to tolerate benefits from sustainable financing. In addition, it supports in educating consultants, contractors, and Real estate developers to use them in cooperation with the concerned governmental agencies. He also addressed that Egypt will be beholding the World Urban Forum for Green Cities 2024 to achieve local economic growth, sustainable environment and social development in order to offer modern and innovative real estate development mechanisms.
The round table involved a lengthy session entitled “Tools to overcome crises”, and it was divided into four axes representing the roles of decision-makers concerned with the real estate and engineering sectors, specifically: the role of the government, the role of developers, the role of the banking sector, and the role of the contracting sector. Various topics about the industry were discussed by experts, consultants, and businessmen in the sector, the most prominent of which were: fixing the prices of building materials for a specific period of time until the completion of existing projects, providing new facilities for real estate financing, and developing plans to overcome financing problems. In addition, the discussion included the role of the banking sector in finding new financing solutions from banks, whether for the developer or the customer, to support the real estate market.
It is noteworthy that Invest Gate organizes a number of roundtables annually that includes businessmen, real estate developers, investors, contractors, brokers, bankers, agents, legal experts, and consultants, to provide opportunities for serious and different dialogue between representatives of the real estate and engineering consultancy sectors to assess the changes that the market has witnessed over the past years and research development plans in order push the wheel of the Egyptian economy.
-Ends-
About Attaby Consultancy:
Attaby Consultancy is a leading company, with four decades of experience, that provides multiple engineering consultancy services through a team with diverse experience in all engineering disciplines. Attaby Consultancy has a proven track record of projects in the fields of study and planning, architecture, sustainability, industrial and urban planning, smart cities, infrastructure, power plants, water treatment plants, roads, and bridges. The solid position of Attaby Consultancy stems from the experience of its leadership team, and the name of the company goes back to the pioneering position of its founder, who provided the industry with more than 50 publications of studies and books published all over the world. Attaby Consultancy has succeeded in designing and supervising the implementation of more than 2000 projects over the past years, with a total project value of more than 25 billion US dollars.
LAS VEGAS — The United States may be short of homes, but builders keep on building. But where are these new homes coming up?
Research from the National Association of Homebuilders (NAHB) reveals that the top five markets where builders are building the most single-family homes.
The NAHB looked at permits issued through November 2022 and compared it to the year before.
- Houston, Texas
- Dallas, Texas
- Phoenix, Ariz.
- Atlanta, Ga.
- Austin, Texas
All these five markets posted declines, which shows the extent to which buyer demand has slowed.
These are the markets where the highest number of building permits have been issued for single-family housing.
Screenshot from NAHB presentation.
The number of permits applied in Houston fell by 6% in November 2022 compared to the year before; they also fell by 11% in Dallas and by 21% in Phoenix.
Even though the pace of permits being applied for new construction has slowed, Houston and Dallas alone are building 40% more homes than those being currently built in the whole of California, Dietz said.
Dietz said areas of the country driven by good affordability or underlying population growth continue to show strength in single-family homes. In fact, more than half of the single-family construction that’s being planned is located in the south, he added.
“That’s not to say there are pockets of strength elsewhere in the United States,” Dietz stressed. He cites the I-70 corridor, which includes cities such as Columbus, Indianapolis, St. Louis and Kansas City and “pockets of strength” in the Midwest, in places like Des Moines.
“It doesn’t surprise me, these are the areas where you can build unlike many other areas,” Selma Hepp, chief economist at CoreLogic, said in an interview on the sidelines of the International Builders show organized by the National Association of Home Builders in Las Vegas.
“These are the areas that have ranked in the top for the past few years — even before the pandemic,” she added.
Write to Aarthi Swaminathan at aarthi@marketwatch.com
Assets to be managed for both carbon capture and timber products to meet growing wood demand
NEW YORK, Feb. 1, 2023 /PRNewswire/ — J.P. Morgan Global Alternatives today announced that institutional investors advised by the firm’s wholly-owned timber investment manager, Campbell Global, have led the acquisition of over 250,000 productive acres of high-quality, commercial timberland across three properties in the Southeastern USA and valued at over half a billion dollars. Campbell Global was acquired by J.P. Morgan Asset Management in August 2021 and is recognized as a pioneer in timberland management, having managed more than five million acres worldwide for pension funds, foundations and other institutional investors since inception.
The properties will be continuously managed for both carbon capture and timber production to meet growing demand for sustainable building products and other uses. The properties encompass:
- Over 18 million metric tons of stored CO2 equivalents (mtCO2e), including more than half a million mtCO2e net retained carbon in 2021 alone
- Approximately 120 million standing trees
- Over 700 miles of streams protected by 30,000 acres of riparian forests that sustain water resources, providing wildlife habitats and increased biodiversity within the landscape
- Over 250,000 acres of diverse wildlife habitat for recreational pursuits
“These acquisitions will give our clients access to sustainably managed forests that leverage our more than 40 years’ experience in timberland management,” said John Gilleland, Chief Executive Officer of Campbell Global.
“This transaction is one of the largest of its type in the past decade and builds on efforts to expand our asset class offering across alternatives by offering investors access to a robust carbon sequestration and timber management platform,” said Anton Pil, Global Head of J.P. Morgan Global Alternatives. “We are committed to harnessing the extensive forest management expertise of Campbell Global to offer our clients the unique ESG benefits associated with timberland assets.”
About J.P. Morgan Global Alternatives and J.P. Morgan Asset Management’s Campbell Global
J.P. Morgan Global Alternatives is the alternative investment arm of J.P. Morgan Asset Management. With more than 50 years as an alternatives investment manager, US$216 billion in assets under management and more than 800 professionals (as of September 30, 2022), J.P. Morgan offers strategies across the alternative investment spectrum including real estate, private equity, private credit, hedge funds, infrastructure, transportation, timber and liquid alternatives. Acquired by J.P. Morgan Asset Management in 2021, Campbell Global, LLC is a worldwide investment manager focused on timberland. Based in Portland, Oregon Campbell Global is recognized as an authority on both forest management and timberland investing, with over three decades of experience in timberland management and value creation. A pioneer in the field, they have managed more than 5 million acres worldwide for pension funds, foundations and other institutional investors since inception.
For more information, visit jpmorgan.com/am
SOURCE J.P. Morgan Asset Management
Professional investment consultancy services for investors who want to acquire real estate and citizenship in Turkey.
ISTANBUL, TURKEY, January 31, 2023 /EINPresswire.com/ — Aiming to sell luxury real estate and land for domestic and foreign investors, Marker Investment has started professional investment consultancy services for investors who want to acquire real estate and citizenship in Turkey.
With domestic and foreign real estate investors showing great demand in Turkey, Marker Investment, with its experience in the construction and real estate sector, provides services to investors for the sale of housing and land, and also provides investment consultancy. Especially with the increasing demands of foreign investors in Turkey, it offers high quality and luxury portfolios suitable for demand from many regions of Turkey for investors coming from European, Middle East and Asian countries. It offers investment diversity in the fields of land and commercial property, as well as a real estate portfolio for capital investors, for activities of global investors such as establishing or purchasing facilities in Turkey. It provides support to those who will apply for a Turkish passport regarding the process, and guides investors in all legal processes.
In Turkey; Having a wide portfolio, especially in Istanbul, Antalya and Muğla, Marker Investment produces privileged and sales-oriented solutions with its expert and experienced staff in the sector. One of the biggest goals of making home ownership in Turkey fast and enjoyable, Marker Investment facilitates the real estate purchase processes for investors.
This content is published with the media sponsorship of MarkerGroupe.com
Sales Team
Marker Investment
+90 553 732 84 90
sales@investmentmarker.com
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DALLAS, Jan. 31, 2023 /PRNewswire/ — Stream Realty Partners, a national real estate services, development, and investment firm headquartered in Dallas, has broadened its U.S. presence by launching its first Florida office in Greater Miami.
Executive Managing Director and Partner Greg Katz, who comes to Stream from Newmark and has lived and worked in South Florida since 2000, will lead the office and oversee the brand’s growth across the state.
The South Florida office is Stream’s 15th location across the country. In 2021, the company opened three offices– in Nashville, Northern Virginia, and Phoenix–to complement its locations in some of the strongest commercial real estate gateway markets in the nation including Atlanta, Chicago, Houston, and Southern California.
“Miami has been on our radar for years, and this partnership enables us to accelerate our expansion and build-out of service lines throughout Florida,” said Chris Jackson, President of Stream. “Greg has had tremendous success across Florida and the southeast and is a great leader. His team works well together and respects one another. This is the type of culture we want for Florida and Stream nationwide.”
Across the country, Stream leases and manages more than 271.1 million square feet of office, industrial, retail, healthcare, and data center space and has developed or acquired 47 million square feet. The firm completes more than $5.8 billion in real estate transactions annually.
About Stream Realty Partners
Stream Realty Partners is a national commercial real estate firm offering an integrated platform of services including leasing, Legendary CX property management, tenant and landlord representation, capital markets, investment management and sales, development, construction management, national program management, workplace strategies, strategic marketing, and dedicated research. The company is headquartered in Dallas and operates 15 core offices in markets that cover areas including Alexandria, VA; Arlington, VA; Atlanta; Austin; Boca Raton; Charleston; Charlotte; Chicago; Colorado Springs; Dallas; Denver; Fort Lauderdale; Fort Worth; Greenville, SC; Houston; the Inland Empire; Irvine; Los Angeles; Miami; Nashville; Orange County; Phoenix; Raleigh-Durham; Reston, VA; San Antonio; Tysons; Washington, D.C.; and West Palm Beach. Since 1996, Stream has grown to more than 1,200 professionals and now completes more than $5.8 billion annually in office, industrial, retail, healthcare, land, and data center transactions. For information, visit www.streamrealty.com and follow Stream on LinkedIn, Instagram, Twitter, and Facebook.
CONTACT:
Brian J. Medricka
Stream Realty Partners
Director, National Communications, Public & Media Relations
214.560.3033
[email protected]
SOURCE Stream Realty Partners, L.P.
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Lenders and investors alike have become progressively concerned
about climate change and the effect their lending and investment
decisions may have on the environment. As such, they are seeking
ways to reduce their carbon footprint to achieve environmentally
beneficial outcomes while also meeting their investment objectives
and financial returns.
To meet these concerns, green loans were introduced. A green
loan is defined as “any type of loan instrument made available
exclusively to finance or re-finance, in whole in part, new and/or
existing eligible Green Projects.” This includes term loans,
revolving credit facilities and working capital facilities.
Green Loan Guidelines
With the growth of this loan product, it was necessary to
establish guidelines specific to the green loan to ensure
consistency across the wholesale green loan market. In March 2018,
the Loan Market Association (LMA), together with the Asia Pacific
Loan Market Association (APLMA) and the Loan Syndications and
Trading Association (LSTA), published the Green Loan
Principles (GLP) and Guidance on Green Loan
Principles (GLP Guidance). An updated version of the GLP and
the GLP Guidance were published in February 2021.
The GLP set out a framework of market standards and voluntary
recommended guidelines to be applied by participants on a
deal-by-deal basis that classifies the instances in which a loan
may be categorized as “green.” To qualify as a green
loan, the loan must comply with the following four components of
the GLP: 1) use of proceeds, 2) process for project evaluation and
selection, 3) management of proceeds and 4) reporting. This also
includes applying the loan’s proceeds to an eligible green
project such as, but not limited to:
- green buildings that meet regional, national or internationally
recognized standards or certifications - renewable energy, including production, transmission,
appliances and products - pollution prevention and control, including reduction of air
emissions, greenhouse gas control, soil remediation, waste
prevention, waste reduction and waste recycling - environmentally sustainable management of living natural
resources and land use, and - climate change adaptation, including information support
systems such as climate observation and early warning systems
It is important to note that a green loan may only be marketed
or labeled as such if it complies with the GLP. The GLP provides
that “[g]reen loans should not be considered interchangeable
with loans that are not aligned with the four core components of
the GLP.” A loan party must indicate that the loan complies
with the GLP; the fact that the loan is being used to finance an
environmentally friendly project does not make it a green loan.
Summary of the Four Core Components
- Use of Proceeds. The fundamental basis of a
green loan is the utilization of the loan proceeds, which must be
generally applied to an environmentally friendly purpose. All green
projects should provide environmental benefits that will be
assessed and, where feasible, quantified, measured and reported by
the borrower. The proceeds of a green loan may be used to finance a
new green project or refinance existing debt on a green
project. - Process for Project Evaluation and Selection.
In order for lenders to understand and assess the environmental
attributes of a green loan, the borrower should clearly communicate
1) its environmental sustainability objectives, 2) the process by
which the borrower determines how its project fits within an
eligible green project and 3) the eligibility criteria it uses to
identify and manage potentially material environmental and social
risks associated with the proposed project. - Management of Proceeds. The proceeds of a
green loan should be credited to a dedicated account or tracked by
the borrower in a way that maintains transparency and promotes the
integrity of the loan product. In the case where a green loan takes
the form of one or more tranches of a loan facility, each green
tranche must be clearly designated, with proceeds of the green
tranche credited to a separate account or tracked in the
appropriate manner by the borrower. - Reporting. The borrower should prepare a
report and keep it updated with information on the use of proceeds
to be renewed annually until fully drawn and as necessary
thereafter in the event of material developments. The report should
include a list of green projects to which the green loan proceeds
were allocated, a brief description of each project, the amounts
allocated to each project and the expected impact of each
project.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The introduction of the New Homes Quality Code has brought with it a number of new rules and requirements for developers, including restrictions on “high-pressure selling techniques”.
The Code, which is administered by the New Homes Quality Board (NHQB), applies to homes built by a registered developer which were reserved on or after the developer’s registration date. We have considered in a previous article the differences between the new Code and the Consumer Code for Home Builders.
One such difference is that, unlike the Consumer Code, the New Homes Quality Code (the “Code”) expressly prohibits developers from using what it calls “high-pressure selling techniques” to influence customers to purchase a home.
What are high-pressure selling techniques? The Code contains a non-exhaustive list of five practices which developers are not allowed to employ:
- Developers must not encourage a customer to reserve or buy a new home by suggesting there are other people interested in the property or that the price will soon increase if this is not true. Developers should note the important qualification at the end of this sentence – the Code only prohibits statements that other customers are interested or the price of a home is set to increase if this is not true. If there really are other people interested in a plot, or if there is a planned price increase, sales teams are permitted to tell this to potential customers (even if this has the effect of influencing the customer’s decision).
- Developers cannot offer a financial incentive in return for an immediate decision to reserve or buy a new home. For example, when potential customers visit a site for the first time, the developer cannot offer a discount on the price which is conditional on the customers reserving a plot the same day. Developers are still allowed to offer discounts to their customers; the key point is that these must not be conditional on the customers making an immediate decision. It is not entirely clear from the Code or guidance whether this restriction also applies to extras, such as a developer offering to include carpets in the price if a customer reserves immediately (if these would otherwise be an optional extra). Until that point is clarified, developers are advised to tread very carefully in offering any type of time-limited incentive.
- Developers must not encourage a customer to reserve a new home by telling them that they will lose the opportunity to personalise it if they delay their decision, if the stage of construction would still allow this. This restriction also contains an important qualification relating to truth. Developers will find themselves in breach of the Code only if they tell customers that they will lose the opportunity to personalise the home and this is not true. If construction is sufficiently far advanced that decisions on, for example, kitchens and bathroom tiles do need to be made immediately, developers are perfectly entitled to let customers know this.
- Developers must not encourage a customer to buy any unnecessary or inappropriate additional insurance products, warranties or guarantees. Whether any particular product is unnecessary or inappropriate will depend on the circumstances and may be open to debate. The key point is that developers should be careful to ensure that they are not pressuring customers to buy products that they don’t need.
- Developers must not suggest that a sale may not go ahead unless a customer uses a specific third-party professional adviser, such as a conveyancer or mortgage broker. Note that it remains perfectly permissible for developers to suggest solicitors or mortgage brokers to customers, and we anticipate that many developers will continue to do so. Developers simply need to make it clear that the customer is free to use other advisors of their choosing should they wish to do so.
These restrictions are intended to complement the other Code requirements in relation to sales, the general theme of which is that developers must provide clear and fair information to customers without misleading them or imposing unnecessary deadlines. For some developers, their existing selling techniques will be entirely in line with the Code and will require no modification. Other developers may require to make changes to avoid falling foul of this part of the Code.
It is vital for developers and their sales teams to be familiar with their obligations in respect of high-pressure selling techniques under the Code and adjust their practices accordingly if necessary.