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Transcript of Part of Aberdeen Property Investors Real Estate Investment Market Russia – Experiences and...
Part ofAberdeen Property Investors
Real Estate Investment Market Russia – Experiences and ExpectationsCannes, 11 March 2009
Dr Thomas Beyerle DEGI mbH, Frankfurt/M.
Macroeconomic data
Russia – economical overview
-3-2-10123456789
1011121314151617181920212223
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
GD
P, C
ons
spen
d, C
PI,
empl
oym
ent
0
2
4
6
8
10
12
Une
mpl
oym
ent r
ate,
%
GDP (%) Consumer Spending (%)
CPI (%) Employment (%)
Unemployment (%)
Source: RESEARCH, 2009
Macroeconomic data – comments
General view for Russia: • high GDP growth over the last 10 years • a sharp slowdown in 2009, due to:
– the large drop in the oil prices – the significant tightening of credit conditions which has resulted in a falling rouble and rising
interest rates.
Medium-term view:• a strong rebound in Asian economies by 2010/2011 would lead to another period of
rising oil/commodity prices, which will benefit Russia
Property Market
Russia – largest country of the world (space)
Main investment universe
St. Petersburg
Moscow
Aberdeen Property Investors15 Ulitsa Chapaeva197101 St. Petersburg
Newspaper headlines
Moscow is developing to a tenant dominated market
THOMAS DAILY, 30 January 2009
Building freeze for Europe‘s highest office tower in Moscow
FAZ, 23 November 2008
Government aid for real estate market – new projected cities
Handelsblatt, 17 October 2008
Partner of ECE puts shopping center projects on hold THOMAS
DAILY, 19 November 2008
30 %-decrease in residential use
THOMAS DAILY, 19 November 200/8
Hotel market transferred from luxury class to middle class in Moscow
Allgemeine Hotel- und Gastronomiezeitung, 22 November 2008
Market Entry Model – Russia in global comparison
High risk market entry conditions
Degree of maturity – Europe
Proceeding degree of maturity
Source: RESEARCH, 2009
Vacancy peaking
Further fall in rents
Decrease in construction activity
time
Ren
tal
lev
el
Growth phaseCorrection phase Downturn phaseRecovery Phase
Decreasing vacancy
Rental growth picking up
Construction activity picking up
Supply shortage
Strong rental growth
Increasing construction activity
Increasing vacancy
Falling rent levels
Construction activity high but falling
Atlanta, Brussels, LA, Moscow, New York, Oslo, ParisAmsterdam, Barcelona,
Boston, Chicago, Madrid, Warsaw
London: City
Budapest, Sydney
AthensBucharest,
Calgary,Cologne,
Copenhagen, Düsseldorf, Frankfurt, Hamburg,Helsinki,
Melbourne,Munich,
Rome
Berlin, Stuttgart, Vienna
Prague, Milan
Jakarta
Philadelphia, SeoulBeijing
Osaka
Shanghai
Hong Kong
SingaporeMumbai
Tokyo
Detroit
Istanbul
Luxembourg,Sofia,
St. Petersburg,Stockholm,Washington
Las Vegas
Dallas
Global office market cycle
11Source: RESEARCH, 2009
Rents Europe (prime) – annual change
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
2005 2006 2007 2008 2009* 2010* 2011* 2012* 2013*
yoy in % Europe office Europe retail Europe Industrial
12Source: RESEARCH, 2009
* Forecast
Rents (prime) – Moscow, St. Petersburg
0
200
400
600
800
1000
1200
1400
1600
2004 2005 2006 2007 2008 2009* 2010* 2011* 2012* 2013*
in USD/m² Moscow St. Petersburg
13Source: RESEARCH, 2009
* Forecast
High rental increase Decrease until 2010
Increasing NIY (Q2 2007 - Q4 2008)
0
50
100
150
200
250
Paris Frankfurt Munich Amsterdam Milan Madrid Stockholm London Moscow
Incr
ea
se in
pri
me
yie
lds
sin
ce Q
2 2
00
7 (
% p
oin
ts)
Quelle: RESEARCH, 2009 14
Office Yields (prime) – Europe
0
2
4
6
8
10
12
2005 2006 2007 2008* 2009* 2010* 2011* 2012* 2013*
yoy in % Europe office Europe retail Europe Industrial
Source: RESEARCH, 2009 15
* Forecast
Office Yields (prime) – Europe, Moscow, St. Petersburg
0
2
4
6
8
10
12
14
16
2005 2006 2007 2008 2009* 2010* 2011* 2012* 2013*
in % Europe office Moscow St. Petersburg
Russia high yield level: increase until 2010
Source: RESEARCH, 2009 16
* Forecast
Investment market structure – Russia
Development of commercial property sales – Moscow
18
5400
5600
5800
6000
6200
6400
6600
6800
2007 2008
in million USD
0
10
20
30
40
50
60number
Investment Volume(right) Deals (left)
Source: Real Capital Analytics
-24 % Deals
-12 % Volume
Commercial Property Sales by user types 2008 – Moscow
5,2%
30,1%
24,2%
5,7%
34,5%
0,3%
Apartment Industrial Office Retail Hotel Dev. Site
19Source: Real Capital Analytics
Total: 5,805 in million USD
Commercial real estate capital market – Russia
63%5%
30%
1%
1%
Commercial banks & other lending institutions Property company corporate bonds
Quoted property companies Private property companies and individuals
Private property vehicles
20Source: DTZ, Money into Property 2008, figures 2007
Total: 31.63 in billion EUR
To sum up: Crisis? What Crisis?
Back-up
Strengths
• most important economical centre of Russia • GDP growth• increasing income - low taxes • high returns in European comparison• high rent level in office and retail sector• since 2001 purchase of land by foreigners possible
Weaknesses
• relatively small office space inventory (lack of liquidity)• lacking product availability of office and retail space of international standard
(Class A and B, shopping centres)• low transparency and lack of data availability• strong corruption; value of 2,5 (0 = very strong; 10 = none) on the CPI-Index 2006
(Germany: 8,0)
Opportunities
• further maturation of the markets• positive economical development • retail-relevant pent-up demand of the Russian people• building of offices and shopping centres of international standard• diversification potential for investors
Threats
• legal and fiscal conditions: e. g. letting of building sites• legal certainty for foreigners• more legal restrictions of the City of Moskow• decreasing level of rents• lacking market maturity of Emerging Markets
SWOT analysis Moscow from investor's view
GDP (real) – annual change
-4
-2
0
2
4
6
8
10
2005 2006 2007 2008 2009* 2010* 2011* 2012* 2013*
in % Asia Pacific Emerging Europe Eurozone Germany Japan USA Russia
Source: RESEARCH, 2009 24
Russia – above average
CPI Inflation – annual change
-2
0
2
4
6
8
10
12
14
16
2005 2006 2007 2008 2009* 2010* 2011* 2012* 2013*
in % Asia Pacific Emerging Europe Eurozone Germany Japan USA Russia
25Source: RESEARCH, 2009
Russia – high CPI
Consumer Spending – annual change
-4
-2
0
2
4
6
8
10
12
14
2005 2006 2007 2008 2009* 2010* 2011* 2012* 2013*
yoy in %Asia Pacific Emerging Europe Euroarea Germany Japan USA Russia
26Source: RESEARCH, 2009
Russia – above average
DEGI Deutsche Gesellschaft für Immobilienfonds mbH
Total Expense Ratio (TER)The Total Expense Ratio (TER) expresses the sum total of costs and charges as a percentage of the average value of the fund within a financial year and thus includes all charges and costs incurred in connection with the fund investment, except for transaction costs and front-end load, if any.Prospectuses and Annual Reports are available free of charge from DEGI and the marketing companies. You will find the daily fund prices in supraregional newspapers and on the Internet at www.degi.com.
Forward-looking statement disclaimer – Forecasts are to be understood as examples which are based on certain assumptions that are considered realistic. We cannot guarantee that the underlying assumptions will actually occur nor can we accept responsibility for deviations due to changes in the legal bases and in economic developments.
phone: 0049 (69)-768072-0
E-Mail: [email protected]
Internet: www.degi.com Part of
Aberdeen Property Investors