Weekly Property Round Up

Written on 12 June 2015

It's that time of the week again; time for a WSM property report! Sam Fisher has summarised some of the highlights from this week's news and movements in property.

Development Securities buys Dublin properties for €12.8m

UK property giant Development Securities has agreed to pay €12.8m for a number of properties in South Dublin. The London-based firm is buying property at Nutgrove Retail Park and the Beacon South Quarter. The properties have been bought in a joint venture with Paddy McKillen's Clarendon Properties.

DevSecs executive director Matthew Weiner commented: "This is the latest in a number of acquisitions that we have made in Dublin, an important market for us where we see further opportunities for development". Clarendon Properties managing director Tony Leonard said he was "delighted" with the deals.

Central London prices set for growth of 18% over five years

House prices in Central London are set to rise 18% in the next five years and rents by 19.5%, as the market moves forward after the UK's general election, it is claimed.

The latest analysis says that unprecedented uncertainty surrounding last month's election saw a stifling of house price growth across London, with the rate of house price growth at less than 4%, compared to the 9.6% increase seen in 2014.

The report also says that despite the Mortgage Market Review (MMR) contributing to a 16% year on year dip in home purchase loans in greater London to March 2015, affordability appears to be improving slightly, with the average loan size dipping to 3.86 times annual income in the first quarter of 2015.

Risks still remain on the international front however. International risks such as the threat of another Scottish referendum, a disorderly Greek exit from the European Union and a potential Brexit (Britain exiting the EU) mean that the market has moved from a situation of having several unknown unknowns to being left with a handful of known unknowns. A Brexit remains the biggest threat as the impact on the economy is the biggest unknown at this stage.

Cluttons forecasts modest Central London house price growth in 2015 of between 2% and 3%, before accelerating to nearly 5% in 2016 and stabilising at around 4% per annum between 2017 and 2019. Cluttons expect this level of growth to deliver cumulative capital value appreciation of almost 18% over the next five years.

Cushman & Wakefield is looking for new headquarters

Cushman & Wakefield, a subsidiary of DTZ, is exploring a deal for a new 300,000-square-foot global Manhattan headquarters.  DTZ acquired Cushman for $2 billion a month ago with the intention to put the portfolio of companies DTZ owns under one roof.

Sources said DTZ and Cushman are only beginning to evaluate ideal locations. Among the potential spots is 1271 Sixth Ave., which is close to Cushman's current home and where DTZ is currently located. That building has enough vacancy to accommodate the firm's consolidation. Cushman also has a lower Manhattan outpost at 1 World Trade Center that it will most likely maintain, sources say.

Here's an interesting concept as to why Sydney property prices aren't likely to drop anytime soon

Sydney property prices have been on a tear over the past couple of years. There has been a focus on investors and we’ve also seen a renewed focus from the government on foreign purchasers buying illegally, but whether it’s investors or foreigners, the reality is that Sydney is simply an attractive destination for visitors and residents alike.

It seems that longer term trends in the global jobs market are likely to continue to drive property prices higher, because technology is fundamentally changing the face of the global jobs market. It’s empowering workers to work where the want and because skilled workers are becoming a scarce resource, it’s becoming all about workers’ preferences.

Where they want to live is in turn driving flexible working arrangements. "Crucially, where talent migrates, so will the smartest companies" says Indeed.com’s SVP, Paul D’Arcy.

D’Arcy, who has identified 7 trends changing the face of the global jobs market, said that Australia, and particularly Sydney, is uniquely placed to benefit from the internationalisation of employment opportunities the internet offers.

“The internet economy is reshaping markets for talent, in the past, jobs booms were centred around natural resources, such as gold and ore. When the world industrialised, jobs could be found where companies were based, whereas now jobs are wherever good talent can be found.” It’s talent that’s the key in the new economy, according to D’Arcy, which is good news for Australia being the fourth most desirable destination to live for an increasingly mobile global talent pool.

Like Dorothy and her merry band, it seems highly skilled, affluent and mobile workers are drawn to the Emerald City, which in turn means the well-paying jobs will continue to flow to the city. It doesn’t mean that Sydney prices can never fall. But it does mean that property prices are likely to remain elevated.