Muscat: The Public Authority for Special Economic Zones and Free Zones (Opaz) has awarded a consortium of an Omani and a Saudi companies a tender to provide consulting services (design and supervision of infrastructure facilities) for the first phase of Al Dhahirah Governorate’s Integrated Economic Zone.
The first phase of the project has an area of 20 square kilometres, of which 6.5 square kilometres will be implemented as a preliminary phase that includes a land port to be managed and operated by Asyad Group provided that the remaining part of the zone’s lands be developed for future expansions to keep pace with requirements of all economic sectors.
Eng. Yahya Khamis Al Zedjali, Adviser to OPAZ Chairman for Planning, said that the tender’s tasks include detailed designs for infrastructure facilities, the preparation of tender documents for construction works and the supervision, completion, operation and delivery of the project.
The tender also includes the supervision of the land port, road networks, electricity and communication services, water and irrigation networks, a sewage network, a gas network, solid waste management, administrative buildings and landscaping works.
The Integrated Economic Zone in Al Dhahirah Governorate is located about 20 kilometres from the Rub-el-Khali border crossing to the Kingdom of Saudi Arabia. The zone is also about 100 kilometres away from the Ibri Industrial City project.
Engineer Yahya added: The establishment of the zone was motivated by several goals, including optimising the advantages of its strategic border location with the Kingdom of Saudi Arabia, boosting intra-regional trade between the two nations, bolstering development initiatives and economic diversification, opening up new markets for the Omani economy as well as the Gulf economy, and reaping the benefits of the competitive elements.
There’s a widely held belief that real estate prices will, inevitably, only rise higher and higher. There are, however, long periods when that maxim is decidedly not the case.
Toronto is a prime example. After a surge in the 1980s, the Toronto market peaked in 1989 and didn’t regain that high until 2002 – more than a decade later. A 1995 peak in Vancouver was the high-water mark until eight years later. In the United States, it took a decade after the 2006 peak before that level was seen again.
Each example is different yet each shares central elements, from burst bubbles after manias to the gyration of interest rates and economic woes. What’s clear is real estate can go sideways for a long time, even if everyone believes the natural direction is up.
As Canada works to build a path to housing affordability, the most important thing is new supply – a lot of new homes. But just as important is changing the culture, the mindset that prices are destined to escalate.
Housing has long been expensive but the situation is now extreme. Five years ago, about 60 per cent of households could afford a condo. Last year, it was less than half. And that’s for a condo.
After many years of dizzying gains in the price to buy or rent a home, it’s become widely clear that higher and higher isn’t ideal and comes with many costs.
How to restore some semblance of affordability has shot to the centre of the political debate. This week, Canada Mortgage and Housing Corp., which has called for millions of new homes, held a conference on the question in Ottawa. The Globe on Wednesday illuminated how we got here in a series of charts, from record-low rental vacancies to the way-too-long time it takes to get new housing approved and built.
Many new homes are needed, yes. As this space showed last week, a burst of construction in booming Austin, Tex., has helped reduce the price to rent.
The shift in entrenched philosophy is also necessary. We need to rein in the housing market mindset that up is good, so pervasive in North America.
The mentality leads to speculation, starting with many families betting on the ever-rising value of their home as a pot of retirement savings. Generation Squeeze, an advocacy group for younger Canadians, puts it this way: “break the addiction to high home values.”
The celebration of higher home prices is deeply ingrained. Ownership in Canada peaked in 2011 at almost seven out of 10 households. Almost all political leaders own their homes and many are landlords. That’s the reason that as things started spinning out of control in the 2010s, blame was first cast on factors such as foreigners or investor speculation without grappling with the real problem: not enough housing.
In each example of real estate markets going sideways for a long time, Toronto, Vancouver, the U.S., it was always considered bad news. The Wall Street Journal lamented Austin’s shift from “America’s hottest housing market” to “running in reverse.”
The bigger goal is to rein in prices, bring them closer to people’s incomes.
The Teranet-National Bank house price index shows the price of housing rose 4.2 per cent annually from 2000 to this year, excluding inflation. Household incomes, according to Statistics Canada, rose by far less, about 1.2 per cent a year from 2000 through 2021.
The goal of a steady surge of new supply would be to establish a lasting buyer’s market. Critics of new supply will often say it won’t ease prices but big housing investors specifically warn shareholders that “competition for residents” and an “oversupply” of homes will affect the prices they charge.
Instead of hoping and cheering prices will someday soon recoup and exceed previous highs, the target has to shift to an extended, and welcome, period of nominal gains. If home prices this century had risen at only the rate of inflation, they would be less than half of what they are – and at levels last seen in 2006. Beyond a return to affordability, a market that offered such nominal returns is what would undercut and eventually end housing speculation.
Decades of culture and policy got us here. It will take time to restore affordability. It will take time to change the culture. But as Canada sets the initial foundations to allow for many more new homes, it is starting on the path to affordability.
Featured Image Credit: Domain Residential Northern Beaches/Supplied
A real estate agent accidentally burned down the house that she had been helping to sell.
Estate agent Julie Bundock had been overseeing the sale of the multi-million dollar property in a Sydney suburb in May 2019.
During a visit to the property, she noticed that some of the current tenants in the house had left some bedsheets out to dry on the deck.
Bundock took the sheets and threw them onto a downstairs shelf.
But little did she know that the shelf was below an electric light, which Bundock then switched on.
A large fire broke in the house around 20 minutes later, which is believed to have started as a result of the shelf and bed sheets heating up and catching fire from the wall-mounted light.
The entire house, which was worth around AU $3 million (about US $1.96 million), went up in flames, destroying both the house and the contents.
Fortunately, no one was injured in the blaze which consumed the entire house.
Supplied
The house’s owner Peter Alan Bush had been getting the house ready to sell, and took the matter to court.
In court, Mr. Bush claimed that Ms. Bundock had said words to the effect of: “Oh my God Pete, I think I have burnt down your house.”
She allegedly said: “I had been doing some tidying up. I collected some sheets drying on the veranda and threw them on top of a freestanding metal shelving in the bedroom under the stairs.
“I just threw them there Pete, right up against the light on the wall. I think that’s what started the fire.”
Chief Judge in Equity Justice David Hammerschlag ruled that Bundock ‘actively created the risk of fire and the consequent harm’.
Judge Hammerschlag ordered Ms. Bundock’s employer, Domain Residential Northern Beaches, to pay AU $740,642 to Mr. Bush, and a combined $121,475 to the tenants Elise Coulter, Reggie Songaila, Lauren Coulter, and Ella Eagle.
Supplied
While giving his decision, he stated: “That a fire might be caused by putting or throwing bedding up against a burning light is obvious.
“That risk was plainly foreseeable, and Bundock ought to have known this.”
He added that Ms. Bundock had been an ‘aggressive and uncooperative witness’ in court, saying: “Her evidence was clearly coloured by a heightened awareness that she had caused the catastrophe.”
Domain Residential Northern Beaches had tried to argue that there was some culpability for Mr. Bush and the four tenants, as they had not informed the agency that the shelf would heat up as a result of the light.
Judge Hammerschlag rejected this suggestion.
Topics: News, World News, Australia
WASHINGTON — The House on Wednesday passed a bill that would lead to a nationwide ban of the popular video app TikTok if its China-based owner doesn’t sell its stake, as lawmakers acted on concerns that the company’s current ownership structure is a national security threat.
The bill, passed by a vote of 352-65, now goes to the Senate, where its prospects are unclear.
TikTok, which has more than 170 million American users, is a wholly-owned subsidiary of Chinese technology firm ByteDance Ltd.
The lawmakers contend that ByteDance is beholden to the Chinese government, which could demand access to the data of TikTok’s consumers in the U.S. whenever it wants. The worry stems from a set of Chinese national security laws that compel organizations to assist with intelligence gathering.
“We have given TikTok a clear choice,” said Rep. Cathy McMorris Rodgers, R-Wash. “Separate from your parent company ByteDance, which is beholden to the CCP (the Chinese Communist Party), and remain operational in the United States, or side with the CCP and face the consequences. The choice is TikTok’s.”
House passage of the bill is only the first step. The Senate would also need to pass the measure for it to become law, and lawmakers in that chamber indicated it would undergo a thorough review. Senate Majority Leader Chuck Schumer, D-N.Y., said he’ll have to consult with relevant committee chairs to determine the bill’s path.
President Joe Biden has said if Congress passes the measure, he will sign it.
The House vote is the latest example of increased tensions between China and the U.S. By targeting TikTok, lawmakers are tackling what they see as a grave threat to America’s national security — but also singling out a platform popular with millions of people, many of whom skew younger, just months before an election.
In a video posted on Wednesday evening, TikTok CEO Shou Zi Chew said that the company has invested to keep user data safe and the TikTok platform free from outside manipulation. If passed, he said the bill would give more power to a handful of other social companies.
“We will not stop fighting and advocating for you. We will continue to do all we can, including exercising our legal rights, to protect this amazing platform that we have built with you,” Chew said in his message to the app’s users.
In anticipation of the vote, a Chinese foreign ministry spokesman, Wang Wenbin, accused Washington of resorting to political tools when U.S. businesses fail to compete. He said the effort would disrupt normal business operations and undermine investor confidence “and will eventually backfire on the U.S. itself.”
Overall, 197 Republican lawmakers voted for the measure and 15 against. On the Democratic side, 155 voted for the bill and 50 against.
Some Republican opponents of the bill said the U.S. should warn consumers if there are data privacy and propaganda concerns, but the final choice should be left with consumers.
“The answer to authoritarianism is not more authoritarianism,” said Rep. Tom McClintock, R-Calif. “The answer to CCP-style propaganda is not CCP-style oppression. Let us slow down before we blunder down this very steep and slippery slope.”
Democrats also warned of the impact a ban would have on users in the U.S., including entrepreneurs and business owners. One of the no votes came from Rep. Jim Himes, the ranking Democratic member of the House Intelligence Committee.
“One of the key differences between us and those adversaries is the fact that they shut down newspapers, broadcast stations, and social media platforms. We do not,” Himes said. “We trust our citizens to be worthy of their democracy. We do not trust our government to decide what information they may or may not see.”
The day before the House vote, top national security officials in the Biden administration held a closed-door briefing with lawmakers to discuss TikTok and the national security implications. Lawmakers are balancing those security concerns against a desire not to limit free speech online.
“What we’ve tried to do here is be very thoughtful and deliberate about the need to force a divestiture of TikTok without granting any authority to the executive branch to regulate content or go after any American company,” said Rep. Mike Gallagher, the bill’s author, as he emerged from the briefing.
TikTok has long denied that it could be used as a tool of the Chinese government. The company has said it has never shared U.S. user data with Chinese authorities and won’t do so if it is asked. To date, the U.S. government also has not provided evidence that shows TikTok shared such information with Chinese authorities.
Republican leaders moved quickly to bring up the bill after its introduction last week by Gallagher and Rep. Raja Krishnamoorthi, D-Ill. A House committee approved the legislation unanimously, on a 50-0 vote, even after their offices were inundated with calls from TikTok users demanding they drop the effort. Some offices even shut off their phones because of the onslaught. Supporters of the bill said the effort backfired.
“(It) provided members a preview of how the platform could be weaponized to inject disinformation into our system,” Gallagher said.
Lawmakers in both parties are anxious to confront China on a range of issues. The House formed a special committee to focus on China-related issues. And Schumer directed committee chairs to begin working with Republicans on a bipartisan China competition bill.
Schumer is likely to feel some pressure from within his own party to move on the TikTok legislation. Senate Intelligence Committee Chairman Mark Warner announced after the House vote that he would work to “get this bill passed through the Senate and signed into law.”
In a joint statement with Sen. Marco Rubio of Florida, the top Republican on the intelligence panel, Warner said that “we are united in our concern about the national security threat posed by TikTok — a platform with enormous power to influence and divide Americans whose parent company ByteDance remains legally required to do the bidding of the Chinese Communist Party.”
Democratic Sen. Maria Cantwell, who chairs another panel with jurisdiction on the issue, said she would “try to find a path forward that is constitutional and protects civil liberties.”
Roughly 30 TikTok influencers and others who traveled with them spoke out against the bill on Capitol Hill on Wednesday. They chanted phrases like “Keep TikTok” ahead of the vote. They also held signs that read “TikTok changed my life for the better” and “TikTok helped me grow my business.”
Dan Salinger, a Sacramento, California-based TikTok creator in attendance, said he started creating content on the app during the COVID-19 pandemic purely out of boredom. But since then his account, which features videos about his life and his father, who suffers from dementia, has grown in popularity. Today, he has 2 million followers on the app.
“I’m actually appalled for many reasons,” Salinger said. “The speed with which they’re pushing this bill through does not give enough time for Americans to voice their concerns and opinions.”
Former President Donald Trump has spoken out against the House effort, but his vice president, Mike Pence, is urging Schumer to bring the House bill to a vote.
“There can be no doubt that this app is Chinese spyware and that a sale to a non-foreign adversary company is in the best interests of the American people,” Pence said in a letter to Schumer.
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Associated Press staff writer Didi Tang contributed to this report.
MUSCAT: The Sultanate of Oman’s strategic urban development plan continues to progress with the Muscat Metro project, currently in its preliminary phase as consultancy studies are slated for completion by year-end.
During remarks on Sunday, Eng. Saeed bin Hamoud bin Saeed Al Mawali, Minister of Transport, Communications, and Information Technology (MTCIT), said, “The ongoing studies concerning the Muscat Metro are on track for completion by the end of this year.”
The proposed metro line, requiring an investment of OMR1 billion, is envisioned to stretch over 55km and encompass 42 passenger stations.
It’s worth noting that MTCIT initiated the financial bidding process for the first consultancy study (phase-1 pre-feasibility outline) for the Muscat Metro last year.
The Muscat Metro’s primary objectives include alleviating traffic congestion, enhancing the city’s appeal to tourists, and establishing an efficient mass transit system connecting the commercial centers of Ruwi and Muttrah to Seeb in the west, with an additional branch to the airport and integration with other public transportation modes.
Additionally, the metro project aims to contribute to environmental sustainability by reducing the city’s carbon footprint.
The enhancement of the public transport infrastructure aligns with the Ministry’s ambitious Greater Muscat Development Plan, aimed at accommodating the anticipated population growth, fostering investment, improving transportation networks, enhancing service quality, bolstering infrastructure, and preserving the environment.
Al Mawali also disclosed ongoing studies for a railway link between Oman and Saudi Arabia, while the joint railway endeavour between Oman and the UAE (Sohar-Abu Dhabi) is slated for implementation within the year, alongside the formulation of relevant legislation.
The landmark Muscat Metro project was initially announced in 2021, with the current phase of tendering primarily focusing on the pre-feasibility stage and soliciting support for critical decision-making from the Ministry.
Furthermore, the Ministry has commissioned an impact study to evaluate the socio economic advantages of the project for the Muscat governorate and broader economy, ensuring the long-term viability of the proposed metro system.
China’s central bank has announced new rules meant to expand access to commercial bank loans for property developers
BANGKOK — China has rolled out new rules meant to expand access to commercial bank loans for property developers as Beijing doubles down on its effort to end a prolonged crisis in the real estate industry.
The policies will allow real estate companies to use bank loans pledged against commercial properties such as offices and shopping malls to repay their other loans and bonds and to cover operating expenses. They were announced late Wednesday by the People’s Bank of China, the National Financial Regulatory Administration and the Finance Ministry.
Beijing has moved this week to stabilize ailing financial markets and boost the economy by freeing up more money for lending in various ways. That includes cutting required bank reserves.
The flurry of new measures and pronouncements from senior Communist Party officials about the need to stabilize financial markets and build confidence in the economy, the world’s second largest, appears to reflect a renewed determination to get growth back on track.
Dozens of developers have defaulted on their debts after the government cracked down on excessive borrowing in the industry several years ago. The largest, China Evergrande, is still trying to resolve more than $300 billion in debts and a Hong Kong court is due to hold a hearing on its restructuring plans next week.
The latest policies are not a full reversal of the effort to rein in debt and control risks in the property industry.
The new rules say the bank loans cannot be used to buy commercial housing or rental housing or to start new construction or buy land. Loans cannot exceed 70% of the appraised value of the property being used as collateral and should generally last a maximum of 10 years, with an absolute limit of 15 years.
They also order banks to fully conduct due diligence before and after loans are issued to mitigate and minimize risks.
It’s unclear what impact the new rules might have on the overall crisis gripping the property market. Land sales have long been a major revenue source for local governments that now are grappling with mounting debts. At the same time, stalled construction of new homes has hit contractors and suppliers of construction materials and home furnishings.
In a research note, UBS economists said “the pace and potential size of such loans remain uncertain as banks will likely watch the commerciality and risks of such loans.” But they added that the move was a “significant step” to increase support for developers.
Sales of new homes and home prices have been falling, discouraging consumers from spending since Chinese families tend to have much of their wealth tied up in property. The industry as a whole accounts for about a quarter of business activity in China.
“For developer financing to fundamentally and sustainably improve, property sales need to stop falling and start to recover, which could require more policy efforts to stabilize the property market,” the UBS report said.
This year is already shaping up to be a tough one for investors to navigate, with heightened debate over central bank moves, prospects for economic slowdowns and crucial elections around the world all weighing on fund managers’ minds.
Against this backdrop, Bloomberg News asked executives at major investment firms with almost $2 trillion in combined assets under management about where they plan to put their money in 2024.
From outsourced pharmaceutical service providers to longer-duration US Treasury bonds and private credit deals, chief investment officers from Singapore to Switzerland are looking for long-term growth and betting the slowing economy has finally pushed asset prices down to create a buyer’s market.
GIC: $770 billion in estimated assets under management
GIC Pte CIO Jeffrey Jaensubhakij sees a year of heightened risks from “higher for longer” interest rates eating into corporate finances to geopolitical problems and even artificial intelligence forcing companies to make expensive adjustments. That means more opportunities to become a reliable lender for businesses needing capital.
“Higher interest rates and tight credit availability make new deployment in private credit an area of focus,” he said, adding that inflation hedging through real assets remained important. “In real estate, fundamentals remain resilient in logistics, student accommodation and hospitality.”
And with climate change risk continuing to rise, the Singaporean sovereign wealth fund is looking at investments that help with the energy transition.
Pictet: 250 billion Swiss francs ($288 billion)
For Pictet Wealth Management CIO and head of investments César Pérez Ruiz, energy independence and the push to combat climate change is a key theme for deals. But that doesn’t equate to obvious sectors like solar panels or electric vehicles.
“I want to buy the beneficiaries — the companies that are going to do the digitalization, the companies that are going to do the infrastructure investments,” he said, citing Schneider Electric SE as an example. “There are going to be industrial companies that I call ‘the new staples’.”
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Read More: This $20 Trillion Climate Theme Is Trouncing Other Strategies
With China’s property, consumption and technology firms all experiencing continued volatility, Ruiz remains cautious about the outlook there, finding many similarities with the Spanish housing crisis more than a decade ago that continues to have an effect today.
“I prefer the rest of the world first,” he said, adding that Europe and Japan were attractive markets for investments, especially entertainment, consumption, robotics and digital services companies that service the domestic market in the latter.
“If there is recession, small caps will outperform big caps because everyone is hiding in big caps,” he said.
Partners Group: $147 billion
Unlike many of his peers, Partners Group Holding AG CIO Stephan Schäli still sees bright spots in China, especially in areas like pharmaceutical companies where valuations that exploded at the peak of the Covid-19 pandemic have started to become more affordable as they hunt for growth capital.
“We’re global investors so we don’t exclude China,” he said. The outsourcing of pharmaceutical services from drug development to manufacturing and packaging firms gives opportunities, both in China and other Western markets, he added.
While Schäli is relatively cautious on office properties, he echoes GIC’s penchant for last-mile logistics assets as well as Pictet’s enthusiasm for companies that will benefit from the rise of AI and environmental concerns.
“The IT service sector is changing so companies able to implement AI and help other companies get that done are an attractive topic,” he said. Companies that provide ESG-related services are also a target. “We invested in the global leader of cleaning pipelines. So that’s making them really clean and making sure they don’t have any negative environmental impacts.”
China Asset Management: 1.89 Trillion Yuan ($263 billion)
China’s market may have more upside surprises than downside in 2024 even as the nation’s economic slowdown and property crisis weigh on investor confidence, according to Richard Pan, CIO of global capital investment at Beijing-based China Asset Management Co.
Catalysts for a turnaround include bigger-than-expected interest-rate cuts in China as the Federal Reserve’s anticipated end of its hiking cycle may give more room for China’s policymakers, and even stronger support for the ailing property market such as the removal of home-purchase curbs in top-tier cities.
“What we’re lacking is just confidence,” Pan said, citing China’s faster economic growth when compared to the US. Once the slide in real estate is arrested, “confidence will most likely return.”
Chinese companies have become more competitive since the start of the pandemic and will continue to do so, he said. While the rise of electric vehicle-makers and solar panel producers was well-known, he argued that restrictions on advanced chips have helped the nation’s semiconductor makers gain an even bigger market share.
For evidence, Pan pointed to electricity generation data in the first half of last year that he said showed China’s economic recovery had been more driven by advanced manufacturing when compared with the US. And the Chinese economy’s size allows it to afford huge investments needed to develop key technologies like new energy and AI, according to Pan.
“Such factors have been seriously neglected by the market,” he said, predicting that the medical, healthcare and e-commerce sectors will see a recovery in valuations.
Temasek: S$382 billion ($285 billion)
For Singaporean state-owned investor Temasek Holdings Pte, the prospect of rate cuts by the Fed makes it “constructive” on the US market, CIO Rohit Sipahimalani said. The easing of financial conditions will reduce recession risks, he added.
“Valuations make it unlikely that we will see outsized gains at the index level, although there are attractive opportunities in certain segments,” Sipahimalani said. He likes India despite valuations that are “a bit extended,” and is attracted by Japan, thanks in part to Tokyo Stock Exchange reforms.
In private markets, Sipahimalani sees a reassessment of valuations coming to the fore.
“Some private equity players who need to give liquidity back to their LPs are now being pressured to sell at more realistic prices,” he said. “And companies who raised a lot of money in 2021 are now getting to the using of that money. They need to come back to raise that money and will have to do so at more realistic valuations.”
Demand for capital may be slowed by the flood of private credit hitting the market, he said, noting Temasek itself plays in the space, especially when it offers “equity-like” returns as it does today.
“But you ultimately hit a wall when you need capital,” he said. “People can take debt up to a point, but they need to complement it with equity.”
Rest Super: A$80 billion ($53 billion)
Australian pension fund Rest Super still sees the appeal of property and infrastructure, but adds that private markets “haven’t yet priced to the new horizon” of structurally higher inflation, according to CIO Andrew Lill.
While Rest Super has been “moderately increasing” its exposure to private credit over the past 18 months and will continue to do so over 2024, it’s also been paying attention to a stalwart of institutional portfolios: bonds.
The fund has been lengthening the duration of its bond portfolio. “And when US 10 years hit 5% in October, that was the signal to complete our rate-lengthening exercise,” Lill said. “That was the level in yields at which fixed interest became a better defensive asset than you’ve seen for quite some time in your portfolio.”
He said the fund had been reducing high-yield exposures because at current spreads above the sovereign rates, the risk versus reward was becoming less appealing.