General Electric Co. may bid for Inmobiliaria Colonial SA, the Spanish real estate company that’s lost about 60 percent of its market value in six months.GE’s plan, disclosed by the Fairfield, Connecticut-based company in a regulatory filing today, would be the second potential offer in a week for Colonial. The developer rose 1.3 percent, valuing the company at 2.5 billion euros ($3.6 billion). The shares have climbed 17 percent in the last three trading sessions.

By acquiring Colonial, GE would gain 12 billion euros of assets including offices and malls in Madrid, Barcelona and Paris. Luis Manuel Portillo last month quit as Colonial’s chairman after a slowdown in the property market caused shares of developers to slump.

“It’s a time of hope,” claims Ana Laura Pulido, a real estate broker in Mexico. While its northern neighbor remains in the depths of a housing meltdown, the Mexican real estate market has been booming.

Mexico has long found its economy overly sensitive to the happenings in the United States, so to see the country’s real estate market thriving despite the turmoil in America is a very encouraging sign for our southern neighbor.

And don’t think that American investors haven’t started to notice this new trend.

According to Clark McKinley, the spokesman for the nation’s largest pension fund, the California Public Employees Retirement System, his fund sees greater returns for its money in Mexico and has already decided to pump over $300 million into Mexican real estate funds.

Whether you tried to buy or sell a home in 2007, homeowners across the country felt the housing bust.  But the other side of the real estate market, commercial real estate, didn’t feel the punch. Locally, commercial projects continue to pop-up. Trease Walden of Myrtle Beach believes in the Grand Strand and is putting her money up to prove it.Walden is thrilled about her new investment. She’s banking on the success of the new Surf’s Up Family Fun Center. It’s a 20-thousand square foot facility opening in mid-march in the middle of Carolina Forrest. Carolina Forrest is one of the fastest growing areas in the region. Walden says the state-of-the art project will top off at 4.2 million dollars, a sizeable investment in the community. “This is where my family is. I love it and this is where we’re going to stay. I want to put out money where we’re going to be,” said Walden.The project started on paper when the housing market was spiraling downward. Walden said they closely followed the ever-rising prices of materials and labor. So they worked hard to stay on budget. But they believe in their dream.“We just have to work with it. That’s the way the economy is going, we know that there’s going to be increases,” said Walden.  “You just have to feel the market out and do the best that you can.”Scott McNew, a commercial real estate agent, said continued growth and tourism helped keep the Grand Strand prosperous during the housing market crash.“The commercial market is strong today and doing well. It’s stabilized. I’m not seeing dips in the commercial pricing,” said McNew. “What we’re seeing is more moderate growth. Residential, we’ve seen a decline in prices. They’re off from what they were a year or two ago. Commercial has stabilized and is holding its own. Investor’s are a little more cautious now.”McNew said builders overbuilt nearly 30 percent above demand. So now, the area is playing catch-up with the more than a year’s worth of housing oversupply.However, the commercial side of the market must keep up with the population growth and build new structures like medical buildings and office space. McNew also said tourism should continue to push the commercial industry to build restaurants and retails stores 

Americans are falling further behind on consumer loans, with late payments rising to the highest level since the nation’s last recession in 2001, data released Thursday show.In its quarterly study of consumer borrowing, the American Bankers Association said the percentage of loans at least 30 days past due rose to 2.44 percent in the July-to-September period from 2.27 percent in the previous quarter.

The delinquency rate, which covers eight loan categories, was the highest since a 2.51 percent rate in the second quarter of 2001. Late payments on some types of loans rose to levels not seen since the 1990s.

The ABA attributed some of the summer increase to rising oil prices and the inability of thousands of homeowners to keep up with mortgage payments.

“Those little expenses that keep sucking dollars out of wallets every month are what have the most impact on people’s ability to pay their consumer loans,” Chief Economist James Chessen said in an interview.

“My concern is that delinquencies will continue to rise, because the housing problem will worsen, and disposable income will not stretch as far,” he added. “Lenders will need to take a second or third look at any consumer loans they make.” Reuters Reports

Rising interest rates, population growth and price increases caused by a shortfall in the supply of new homes are contributing to a 22-year low in affordability.

As a result many home buyers are considering medium and higher density housing as more affordable options, institute president Noel Dyett said in a statement.

“In 2008, the main challenges facing the real estate market will be low home loan affordability, the possibility of more interest rate rises, the ongoing fallout from the US sub-prime problems, and an extremely tight rental market driving rents up,” he said.

During 2007 the real estate market was split between established home owners, who enjoyed a “vintage” year, and new entrants who experienced a “less fortunate” time.

The institute’s outlook for 2008 suggests house prices will continue to rise in all states except NSW, where the market is more subdued, and Western Australia, where activity has settled. More Reports

Tier II Cities- Best Bet

January 4, 2008

The upcoming tier-II cities across the country would still remain the best bet for real estate investors, according to Jones Lang LaSalle Meghraj. The real estate consulting company that recently announced an investment of more than $1 billion in the Indian property market says cities such as Chandigarh, Guwahati, Nashik, Indore, Dehradun, Vadodara and Vizag would be the hottest real estate destinations for 2008.

US-based Jones Lang LaSalle, the world’s leading integrated global real estate services and money management firm, recently merged with Mumbai-based property consultant Trammel Crow Meghraj. The saturation of metros and other tier-II cities is one of the factors for the drift. However, in addition to this, the proliferation of IT companies despite the poor performance of IT stocks in the latter half of 2007 would be the other impacting factor.

According to Jones Lang Lasalle Meghraj chairman and country head Anuj Puri, IT companies — the primary drivers in Indian real estate market, are not dependent on central business locations. Since it makes more sense for foreign-based companies to offload back-office functions and even serious research processes to India than to undertake these in situ, IT/ITeS companies can operate from anywhere in India, as long as there is access to skilled manpower and necessary resources.

Therefore, MNCs would want to benefit from cheaper real estate prices and set up shops in tier-II and III towns, driving up the retail, residential and infrastructure sectors wherever they go.

For sound investments in the real estate sector, emerging areas are the market drivers as they offer low entry level prices compared to the saturated markets where getting space for market drivers such as malls is often very difficult.
Hence, places like Vizag that offers cheaper land compared to Hyderabad, low cost manpower, low competition, better infrastructure coupled with high purchase power, are making it one of the most sought after cities. Designated areas in Vizag like Dwarakanagar, Seethamadhara, Gajuwaka, Rushikonda, Anakapalli, Bheemili and Paarwada for commercial development and Madhurawada, Pendurthy, Parawada, Bheemunipatnam and the areas towards the Anakapalli Corridor for residential investment are considered hot.

On similar lines comes Vadodara with prime residential areas in Alkapuri, Race Course Road, Old Padra Road, Jetalpur, Akota and Fatehganj. The Uttaranchal government is making a 60-acre IT Park in its capital Dehradun which is also driving the real estate markets skywards. Places like Chakrata Road, Mussoorie Bypass and Sahastradhara Road are the best locations for small to medium investors.

In Indore, low-entry costs in places like Vijay Nagar, Bypass, A B Road, Rau, Gulmohur Colony and Green Park Colony offer great investment opportunities. While Nashik with its proximity to Mumbai and connectivity makes suburbs of Anandwalli (Gangapur Road), Indiranagar, Untwadi, Aadgaon (off Mumbai-Agra Road) and along Pathardi Link Road a good catch. An upsurge in the retail market in Guwahati has made the Khanapara, Zoo-Narengi Road, Basistha and Beltola as the new residential hot spots.

Chandigarh scores very high on property market, people, physical infrastructure, social infrastructure and business environment. Coupled with rapid development on its outskirts, the city has seen very encouraging real estate and retail trends. Other than the city itself Panchkula, Mohali, Dera Bassi and Zirakpur offer interesting investment options. var RN = new String (Math.random()); var RNS = RN.substring (2,11); b2 = ‘ ‘; if (doweshowbellyad==1) bellyad.innerHTML = b2;

Every day ex-communist Bulgaria proudly announces yet another foreign investment project for a new shopping mall, a golf course or a residential complex.

The real estate boom has created new jobs and the government boasts an economic growth of 6 percent a year. But investing in construction alone cannot bring long-term prosperity to the poorest European Union member.

Bulgaria’s problems, analysts say, include underinvestment in infrastructure and manufacturing, a large grey economy, eroding education, growing consumer indebtedness, crippling inflation and a ballooning current account deficit at a time of global credit jitters.

They say the Balkan country faces troubled times ahead if it does not move quickly to address the looming economic risks.

“We are seeing building of shopping malls and investment in real estate but not in product-generating sectors that can boost potential for the future. That is certainly a problem,” said Ivailo Vesselinov, senior economist at Dresdner Kleinwort. The European Bank for Reconstruction and Development (EBRD) said the investment pattern was worrying and Bulgaria was likely to feel a negative impact in the medium term.

“There should be more efforts in dealing with issues like human capital, education, the brain drain,” EBRD’s economist Fabrizio Coricelli said. Out of a total of 4.36 billion euros in foreign direct investment attracted last year, nearly 3.2 billion went into real estate and construction, financial services and trade. Manufacturing received just 804 million euros.

The World Bank warned recently that Bulgaria would never reach EU income levels if its labour productivity continues to rise by only 2 percent a year.

The share of services — banking, trade and real estate in particular — now makes over half of the country’s annual economic output, while industry’s share stays roughly unchanged at around 30 percent and agriculture has shrunk threefold.

With global borrowing conditions getting tighter, analysts expect the fast pace of property price growth in post-communist Europe — at an average annual of 20 percent — to slow down and investment to moderate.

A decline in foreign capital flows would hurt Bulgaria, which relies entirely on foreign direct investment to cover a yawning current account gap of over 20 percent of GDP this year, driven by surging imports.

“The credit crisis will not end tomorrow…over the years there will be a negative impact on Bulgaria,” said Daniel Gros of the Brussels-based Centre for European Policy Studies.

Another headache is racing inflation, which hit an annual 12.6 percent in November. Analysts warn that without some slowdown in explosive consumer lending and demand, Bulgaria’s emerging economy faces a serious risk of overheating.

Bulgarians readily run up debt in their zeal to buy flat screen TVs, new cars and houses after decades of communist austerity.

Inflation adjusted lending rates are negative or close to zero, which draws queues for more loans. Credits have jumped 60 percent by October, while deposits rose 30 percent.

The central bank, worried by the credit boom, urged banks earlier this month to raise lending rates and tighten rules in line with the international situation. It said it was ready to intervene with fresh measures to cool down the trend.

And while a financial crisis like the 1996/97 one that wiped out a third of Bulgaria’s banks is unlikely, the country could feel the pinch if western banks, which control most of the local sector, tighten funding for their arms, analysts said.

The Socialist-led government has repeatedly pledged to keep its prudent fiscal policy and run a budget surplus of over 3 percent of GDP next year to counter external risks.

But analysts say it remains to be seen whether the ruling coalition, whose popularity is waning, will not succumb to growing public pressure for higher wages.

The government’s main tool to steer the economy is fiscal policy as Bulgaria operates under a currency board regime, which limits monetary policy and fixes the lev currency to the euro. reuters