Mexico: Palace Resorts Buys Italy's Baglioni Hotels & Resorts
Mexican hotel and resort firm Palace Resorts, owned by the Chapur family, bought the Italy-based Baglioni Hotels & Resorts that owns properties in Florence, Apulia, Rome, Sardinia and Venice in Italy, as well as in London and The Maldives.
The deal, for an unspecified amount, allows Baglioni to seek development opportunities in the United States, which “represents 70% of Palace Resorts’ business,” and for Palace Resorts to have a major presence in Europe. Palace has nine resorts, with eight in Mexico and one in Jamaica, while Baglioni plans to open its next hotel in Milan in January. In February 2021, Reuben Brothers, the ownership firm of David Reuben and Simon Reuben, bought the Baglioni Hotel Luna in Venice dating back to 1118 for about 100 million euros ($100.7 million).
France: Storm Warnings for Property Market
The economic predictions looked gloomy at this year’s annual conference of French property association IEIF, with the group’s senior advisor, Pierre Schoeffler, declaring: "In the eurozone, we will have negative real interest rates, a priori favorable to real assets and real estate, and unfavorable zero growth for efficiency assets such as stocks."
While quite unpredictable, said Antoine Flamarion, co-founder of Tikehau Capital, it is certain that the unprecedented rise in interest rates will affect all sectors and all geographies. Georges Rocchietta, chairman and CEO and co-founder of Atland, added "there is currently a very strong distortion between the expectations of buyers and sellers." And Bruno Tertrais, deputy director of the Foundation for Strategic Research, said that between galloping inflation, rising interest rates and the risk of recession, it seems a new macroeconomic reality has arrived and French investors must prepare for the advent of a new real estate cycle.
U.S.: Texas City Leads Areas Where Renting Tops Buying
With U.S. homeownership increasingly out of reach for buyers and more turning to renting across the country, the most favorable place to rent by one analysis may be a surprise: McAllen, Texas.
McAllen surged to the top of the list of U.S. cities where renting is better than buying in a monthly index created by Florida Atlantic University and Florida International University to measure the ratio of home prices to rent in 100 U.S. metropolitan areas. McAllen vaulted past No. 2 Spokane, Washington, on the September index, while August's No. 2, Austin, Texas, slipped to fifth place and Nashville, Tennessee, moved up to third place as Durham, North Carolina, was in fourth.
Germany: Heimstaden Invests €243 Million in Allianz Apartments
Swedish investor Heimstaden is taking a €243 million stake in Allianz Insurance's German residential property portfolio that includes 3,135 apartments in markets in western and southern Germany such as Düsseldorf, Cologne, Bonn, Berlin, Stuttgart and Munich.
Heimstaden Bostad, mainly a money manager for Scandinavian pension funds, significantly expanded its German exposure a year ago by taking over the European Akelius portfolio and has so far primarily held holdings in the east of the country. This is the second joint venture between the two cooperation partners: In December 2021, Allianz invested €766 million in a portfolio of 9,300 apartments from Heimstaden in Sweden.
UK: Shell Pension Fund Drops £600 Million Property Sale
Multinational oil and gas giant Shell has pulled the sale of United Kingdom real estate assets in its contributory pension fund, valued at up to £600 million, CoStar News understands.
Shell decided to run the sale, which was being overseen via a number of different portfolio sales with different advisers, again in the New Year in smaller lot sizes. Advisers had been appointed to sell off the fund's assets in different processes, with investors particularly focused on two principally industrial portfolios: The London industrial portfolio is called Pearl with CBRE and Knight Frank have been running a sale of these assets seeking about £175 million, while the "Opal" regional portfolio sale incorporates 12 assets in locations such as Trafford Park, Birmingham, Oxford and Reading. The guide price is £130 million.
Canada: Apartment Rents on the Rise for REITs, but So Are Costs
The country's largest publicly traded apartment landlord faced flat rent growth per unit in the third quarter despite a rising rental market as Canadian Apartment Properties REIT saw increasing costs from inflation.
The Toronto-based real estate investment trust, which has almost 60,000 units across Canada, said net operating income and funds from operations were affected by higher maintenance costs with increases in utilities and realty taxes. The rental market continues to gain momentum as interest rates push many Canadians out of homeownership, with one estimate last month finding that the average rent reached $2,043, a 15.4% increase from a year earlier.
This report was compiled from CoStar's international news publications in the United States, United Kingdom, Canada, France and Germany.