China “Succeeds” in Offsetting Crisis

Chinese leaders are claiming “initial success” at overcoming the problems brought on by the economic recession that is affecting much of the world. In a statement released on Sunday, Premier Wen Jiabao reported that the Chinese economy performed better than expected during last month, which was some welcomed news, not only for China but also the rest of the world.

Premier Wen made the speech during a 3-day visit to industrial regions of eastern China. He claimed that sales of some companies had begun to rebound. Inventories are beginning to decrease while electrical consumption is rising.

“We have achieved initial success from the policies we adopted to counter the financial crisis,” the premier said, according to China National Radio.

The premier also vowed that the government will continue to take other measures to combat the economic downturn. This is to include making large or accelerated investments in totalling CNY600 billion in 6 projects already identified of being of scientific or technical value over the medium to long term.

It was recently reported by the Dow Jones that Chinese exports fell 2.8 per cent in December. Official figures have not yet been released. Because imports also fell, many believe fear that the country is not only being affected by the global economic slowdown but also by a weakening of internal demand.

James Gonzalez, Market Analyst at Obelisk, finds the efforts made by the Chinese central government reassuring for overseas investors. “It appears most of the world is in agreement that the way to best exit the global downturn is to confront it head-on and I’m glad to see that the Chinese leadership is also in accord.”

For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).

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A New Way to Invest in Spanish Property

Spain is a well-established overseas destination to invest in property and a prime favourite with investors from the UK – the Foreign and Commonwealth Office estimates that around 1 million Britons own a property in Spain. However, after a decade (1996 to 2006) of spectacular price rises when property values increased by a huge 190%, the Spanish property market is currently suffering from a downturn.

In an attempt to kickstart the property market and maintain investors’ interest in the country, the Spanish government has drafted new legislation for the creation of real estate investment trusts (REITs). Known as Sociedades Cotizadas de Inversión en el Mercado Inmobiliario in Spanish, the REIT legislation is expected to become law during the first half of 2009.

As a company, a REIT owns and operates real estate properties, and must regularly distribute a large percentage of its income as dividends to investors. In return, REITs enjoy substantial tax breaks. REITs were created in the US in 1960 as a vehicle to allow large-scale investment in property and currently represent an important segment of the US economy. US REITs have experienced a rise in their equity market capitalisation of over 30% in the last 10 years. REITs are also popular in the UK and Australia.

The proposed Spanish REITs will be exempt from Spanish corporate income tax (currently 30% and one of the highest in the EU), provided they invest 75% of their assets in lease-related residential properties. REITs must have a minimum of €15 million (₤12 million) of working capital and pay out at least 90% of rental proceeds and capital gains on sales of assets to investors.

Collective investment schemes already exist in Spain, but the introduction of REITs is expected to open up the Spanish property market, particularly the rental market, to large-scale investment. “The proposed REITs offer a potentially more dynamic vehicle for investing in Spanish property,” comments James González, Market Analyst at Obelisk Investment Property, “and may well kickstart Spain’s rental market.”

James points out that the long-term rental market in Spain is currently very small compared to other EU countries where around 30% of homes are rented. “With just 8% of properties available for rental, Spain has huge rental potential,” he says, “and the introduction of REITs as well as the recent government tax incentives should give Spain’s rental market a huge boost.”

According Barcelona-based property consultants, Aguirre Newman, Spain’s rental market is due to grow by 15% during 2008 with future high increases expected for 2009 and beyond. The new REITs may well push these expectations even higher.

For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).

Email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com.

For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com.

Malaysia Reviews Rules for Foreign Investment

In an attempt to protect the country’s lucrative property market, the government of Malaysia has agreed to review the rules governing foreign investment. The move is welcomed by the country’s property professionals.

Although the announcement was triggered by concerns over the recent credit crunch, members of the property industry have been calling for the move for some time. The relaxation of restrictions on property investment by foreigners is largely seen as a way to increase Malaysia’s attractiveness as an overseas property investment destination.

According to Datuk Richard Fong, the Malaysian president of the International Real Estate Federation, the current foreign investment guidelines for the property market were introduced in 2006 and have been successful in attracting interest from investors from Asia, the UK and the United States. However, the restrictions that still remain are preventing the country from attracting higher levels of foreign investment.

James Gonzalez, Market Analyst at Obelisk, believes that these obstacles need to be lifted to maintain competitiveness in an increasingly tight market. “Malaysia is ready to launch a public-private sector initiative to attract €2.25 billion of foreign investment over the next 5 years. If they hope to reach that goal, they will need to remove unnecessary restrictions on investment. If not, investors will look elsewhere.”

These restrictions include the fact that each state authority has the discretion to assess every purchase made by a foreigner based on its location, type of property and the percentage of the total number of properties in the complex. If the state chooses, the purchase can then be blocked.

At the very least, this system causes unnecessary delays in the purchase process. Property professionals are looking toward a system where the federal and state levels will be integrated and the wishes of one level of government will not be counteracted by the other.

For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).

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For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com.

Bulgaria’s Banks Riding the Storm

As daily doses of negative economic news are dispensed from Wall Street, certain areas of the investment landscape continue to do good business. Bulgarian banks, for example, are still doing remarkable commerce even in the face of the global economic crisis.

Bulgarian banks posted a 10.5% increase in assets during the second quarter of 2008, continuing the excellent growth that they have had over the last year. As with other eastern and central European countries, the banking system is somewhat underdeveloped in comparison to the West. Bulgaria’s banking needs were less complex and because of this, banks that expanded into the region did not need to involve themselves in higher risk arrangements like those that occurred on Wall Street. In retrospect, it was a perfect case of “less” being “more”.

Christoph Rosenberg, regional representative for the International Monetary Fund, summed it up this way: “The new EU member states have been holding up well in the global financial turmoil.” “Banking systems in countries with a relatively low loan-to-deposit ratio… are less exposed to the risk that foreign funding dries up,” he recently told Reuters.

James Gonzalez, Market Analyst at Obelisk, does not see foreign funding in Bulgaria waning any time soon. “Bulgaria is an attractive emerging market with a great future. Its banking system should remain immune to the monetary contraction that is affecting so many other markets. Bulgaria should continue to provide great return on investment.”

The need to maintain the high level of foreign direct investment (FDI) remains paramount to Bulgaria’s economic outlook and the latest data does not indicate that a decline is imminent. Stoyan Stalev, chief executive of Invest Bulgaria Agency, recently announced that Bulgaria received €2.84 billion of FDI between January and July, 2008, representing a year-on-year increase of €200 million.

He also announced that in 2006 and 2007, there was a total of €11.2 billion invested in Bulgaria, a figure that represents more than one-and-a-half times the total sum of FDI in the 16 year period after 1992. He attributed this growth to the country’s low taxation and the currency arrangement that pegs the leva to the euro, adding to economic stability.

For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).

Email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com.

For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com.

Sicily: Land of Culture and Investment Opportunities

Sicily has been historically important for centuries due to its strategic Mediterranean location. The island, located just off the 'toe' of the Italian 'boot', has a population of roughly 5 million people. With a land mass of over 25,000 square kilometres, it is the largest island in the Mediterranean.

However, Sicily is now garnering attention from many people who are interested in investing in its history and natural beauty.

There are many reasons to invest in Sicily but the first one is basic. Property in Sicily provides the best value anywhere in Italy. Both apartments and villas are priced well below that of other regions on the mainland. For example, a 3 bedroom property can still be found inland in Sicily for a fraction of what it would cost to buy in the rest of Italy.

This viewpoint is supported by James Gonzalez, Obelisk’s Market Analyst. “For those who are looking to invest in the Italian market, Sicily has to be the place. Reasonable prices, excellent infrastructure and a growing popularity as a tourist destination for Italians and foreigners alike make Sicily a definite investment hotspot.”

Sicily has sand, sea, mountains and even an active volcano. It also has a wealth of cultural attractions that make it a desirable port of call for tourists with a wide range of interests. It is a magnet for not only sun worshippers but it is also a Mecca for art connoisseurs, history enthusiasts and lovers of fine architecture.

These are not only important selling points for the lifestyle buyer but also for the straight investor because a market with a strong tourist industry will afford the investor with a long term investment strategy as well as possible exit strategies (thereby reducing risk).

Another reason that many investors are turning to Sicily is the expansion of low cost flights to the island, especially from the UK. Ryanair now has direct flights to Sicily from London Stansted. The improved transport links will raise the island’s profile and also increase tourism.

For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).

Email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com.

For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com.

Buenos Aires Property Goes Upmarket

Argentina is again showing signs of economic recovery. The tourism sector has exploded and at times it is difficult to find flights to Buenos Aires. The city’s best hotels are operating at nearly full capacity and 3,000 new jobs were created in the tourism sector over the last year. Most importantly, Argentina’s economic growth is estimated to be 8.7% for 2008, a far cry from the negative numbers registered just six years earlier.

The crisis period of 1999 to 2002 saw an actual decrease in the country’s GDP as well as a massive devaluation of the peso. Unemployment ballooned and because of skyrocketing inflation, the number of Argentineans under the poverty line exploded to nearly 60% of the population.

Those dark days now seem firmly in the past. The solid recovery has been noticed by investors both inside and outside of Argentina and major property investment is again growing. One such example is now occurring in the Puerto Madero neighbourhood of Buenos Aires, an area that is described as akin to London’s Docklands. Until recently, there were only run-down warehouses at Puerto Madero. However, since a local developer constructed a luxury boutique hotel, major hotels have followed. The area is now becoming “gentrified” with numerous upscale shops and restaurants opening their doors before the property values continue to climb.

The developer followed up his hotel success with the launch of an exclusive housing development in Puerto Madero. Designed by renowned British architect, Norman Foster, prices will range from €183,000 for a 1-bedroom apartment to €4.40 million for a penthouse.

When completed, it will be the most luxurious apartment development in Buenos Aires but the developer believes they still represent great value for the money, especially for a European investor. “With the apartments you are getting a respect for design and architecture,” the Times Online was told.

The project is already proving to be a success with local buyers making up 60% of the purchasers. The remaining 40% is comprised by foreigners who include mainly Britons, American and Spaniards. Financing still remains a problem—an unfortunate hangover from the earlier economic problems—however, the property market in Argentina is still an investment possibility well worth considering.

James Gonzalez, Market Analyst for Obelisk, believes that after its earlier period of crisis, Argentina may very well be ready for serious examination. “Argentina has had its period of dramatic downturns but it may now have turned the corner. Residential prices on resale properties rose by 13% in 2007 while residential rents rose at an even faster rate. With high yields on luxury properties and high economic growth, investing in Argentina may well be worth considering.”

For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk free on 0808 160 0670 (UK) or 1800 932 514 (IRE).

Email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com.

For press enquires, please contact Obelisk’s marketing department on (+34) 952 820 319 or email press@obeliskinternational.com.