Archive August, 2011

Property investor show & OPP Live, Excel London Oct 2010

31 August, 2011 No Comments

You make your money When you BUY, NOT When You SELL.

This is one of those phrases that professional real estate investors believe and follow …. and the places with more supply per square meter is at the fairs.

The Property Investor Show & OPP Live was held in London in late 2010. The most relevant facts during this real estate exhibition were:

1 – There was a live auction with more than 200 properties. Even if you previously hadn’t participated in real estate auction, I encourage you to go see one to learn its dynamics, the purchase before and after the auction, the closing of good business, or the rules to perform this type of purchase, etc..

2 – In the English market, and in the international (but in a smaller scale), there is the possibility to “buy fractional”, ie. to buy a part or portion of the entire property. It is a figure that has considerable popularity in a market like the one we have today.

The approach is aimed at the holiday home as an investment. Second home buyers seek homes that require them to give a small down payment, with low building expenses, and few financial risks … but that allows them to benefit 100% from their investment. It differs from multiowners, which means only a right to use the property x weeks per year. (I’ll make a post detailing this type of fractional purchase).

3 – Almost half of the exhibition was dedicated to the international market, with potential countries such as Spain and Portugal for the English market, as well as new destinations to invest, such as Cyprus, Greece, Africa, Egypt, Brazil, Swazi and Turkey (the ones that had great reception in the English market were mainly: Cyprus, Turkey and Egypt).

4 – In particular, Egypt was the guest country, with many product developers offering the best destinations in the Red Sea. Egypt is considered one of the leading emerging markets in the property sector because it is generating great interest from international markets to invest there.

Many of the reasons to invest in Egypt are: good sustained economic growth, cheap labor and land, and a booming real estate market. A great thing is that the RE market is interesting to both, domestic and foreign customers.

Among the advantages of buying in Egypt is the exemption of tax rates:

* The purchase and ownership of a property is exempt from taxes, both inheritance and capital gains.
* The administrative charges, if any, are very low in general.
* There is an estimated return on investment between 5 to 11% depending on the type of property.
* The areas of the Red Sea are the most popular for tourists and the demand for vacation homes is located in Hurghada, Sharm el Shiekh, and Gouda.

* Theoretically, when buying a home it is not necessary that it be registered in the deeds of the property, although the possibility exists if a buyer decides to register his property paying a fee for it.

5 – There were about 130 seminars of about 45 minute each, in addition to the exhibition, with the idea to reflect this continuous change because new markets are opening at the same time, and new creative ways to face sales and marketing are emerging ….. It is said that the money exists, but will exist only for companies that are prepared to give in exchange good business prospects ….. It is also interesting the idea that investments in “passive properties”, for example student apartments or hotel rooms, should be part of investors’ portfolios as investment alternatives.


29 August, 2011 No Comments

A Real estate fair that shows a market undergoing a deep transformation

Former Minister of Housing, Beatriz Corridor, opened the show a year ago in company of F. Baltasar, Counselor of Environment and Housing of La Generalitat. This occurred during the time in which President Zapatero was considering to eliminate the Ministry of Housing in his government reshuffle, whose tasks would then be under responsibility of the Ministry of Development led by J Blanco.

The show was hosted in Montjuic showing the large supply of homes available at the time, both first and second-hand homes, as well as store and office space, parking lots, which, as was seen in other real estate exhibitions around the country, were a big chunk of the bank’s portfolio.
The show’s international section had a wide representation from Russia.  There was still a close relationship with the Arab Union for Real Estate Development, and there was a delegation from South American countries, i.e. Argentine and Colombian businessmen looking to find Spanish partners to invest here. In the Symposium, held at the same time, the representatives of Colonial and Morgan Stanley, believed that international investment was starting to show interest in the Spanish housing market, not so much for developers but to create personal wealth, and always at attractive prices … . this was referred to as possible competitors to the Spanish family offices, which were those that had been buying quite much in previous years.

Exhibitions and fairs are generally intended to present to the public and the specialized sector the latest industry trends, showing the existing product supply at the national and international level. That gives a quick overview of; the evolution, market trends at that precise moment and of the future for each particular sector…… But in this case it is very difficult to predict the evolution of the housing market but also the new skills that the job market will demand in the future (either by the changes that new technologies have introduced, or the differences in advertising, or the easy access to foreign markets to both buyer and seller (globalization), or energy conservation and respect for the environment, etc. ..).

It ‘s obvious that the real estate business that will emerge after this crisis, must come with drastic changes, as we currently witness this transformation process. When the market reactivates, it should be more environmentally responsible … To point out; the information about the crisis have proved to be inaccurate as well as the forecasts about the behavior of the economy …. and recovery in Spain seems to me like a snail trail.

A conclusion for the future could be that the new market must be created by all of us all, bearing in mind a greater economic rationality.

Where to buy a property in the foreign market

28 August, 2011 No Comments

Know the reasons why you want to buy and have a list of priorities… these are the most important factors to determine the best places to buy your property

It is not the same to buy a vacation home than to buy a home only for investment purposes …… Due to globalization it is less uncommon to buy a house in foreign territories, especially because purchase prices are usually more affordable than in Spain, or Europe in general. The good climate of Spain made it, for many years, one of the main countries in the Mediterranean chosen by French, English, German, Dutch and Belgians as a retirement destination and also as a place for their second home. Nowadays, due to a stronger €, the Spanish people are those who invest in emerging countries where house prices are still cheap in comparison to the prices that have been paying here in recent years.

1 – In the case of purchasing a vacation home the idea seems relatively simple; to find a sunny place where we can escape to relax. But we must go further and think realistically …. How many times a year and for how long am I going to go?…. Do I need to rent the house when I’m away to cover the maintenance costs? If so, how many months per year should I rent it to break even? It is therefore important to carefully study the climate of the area, with its seasonal cycles, rainfall, hurricanes, etc.
One should know what’s the available budget and the total cost that entails. For example the distance is more important than one might think, because in the long run travel costs add up (shoot numbers if you are thinking about a family…), and can end up being much more expensive. Suppose you choose to invest in Malaysia, where it is relatively cheap to buy a house by the beach. If the trip is expensive or airlines do not have direct flights, then you must make some flight connections, the trip is usually expensive and uncomfortable.

2 – In the case of purchasing a property as an investment purpose, or perhaps to enjoy from time to time, it is crucial to consider which areas are suitable for a capital disbursement and study how the resale market behaves. We must also take into account currency variations and the risk that it adds into the transaction.

If the purchase is solely for an investment purpose, then the distance between the place of residence and country of destination is irrelevant. What’s relevant is to evaluate whether they are regions with a high demand by both nationals and tourists. Finally, you should have the strategy to sell in order to be ready when the time to sell arrives: it is preferable to buy in an area where not only local buyers are active, but an area that has a strong local and international market, which would make a possible sale faster and easier. Such examples may be: Tenerife, Laco di Como (Italy), Orlando (Usa), and cities like Paris or Barcelona, ​​as they are locations with a high demand for vacation rentals. Riskier investors could check out opportunities in countries farther east.

3 – If the purchase is intended to settle/ retire and live permanently in the new country, decisions are perhaps simpler, with valuations such as the climate, cost of living, taxes and quality of life (if so, you must also study the job market or how to meet the needs of a family). You have to see the difference between buying a vacation home or a first residence. Tourist areas have a high demand for a few months out of a year, but the remaining months are almost dead with fewer services that supply the area. You must also assess what kind of winters does the area have.

The Mediterranean coast of Europe, combines a good climate with great communications and accessibility. Traditionally, the most popular countries are Spain, Turkey and Cyprus.

Basic ideas to consider before making a purchase:

* If possible, execute your own market research “in situ”. Ask questions, see different options and look for multiple information sources.

* If rental is important, bear in mind that demand for rentals may differ throughout the year.

* Realize that mortgage conditions, if necessary for the purchase of this particular home, vary widely from country to country.

* Finally, as I previously mentioned, know exactly what’s the purpose of your purchase; this will facilitate what kind of country or property best suits you.

California’s Luxury Designer…. Steve Hermannnn!

28 August, 2011 No Comments

Have you ever seen a €27 million house… ?

If we take a look at this particular work of Steve Hermann, a designer of upscale homes for artists and entrepreneurs in California, we are witnesses of a showcase of modern design and minimalist luxury in architecture. The lighting is extremely well distributed around the house, enhancing its existing open spaces, and the house’s finishing touches are impeccable.

As its name emphasizes “Glass Pavilion”, the majority of its facades are made of glass. For its implementation they have chosen a particular type of glass that is especially bright and clear, the one used for cabinets of jewelry stores.

The construction was completed during the summer of 2010.
It’s an unusual residence, with an area of ​​1,289 m2, built on a large plot that allows it to maintain total privacy from neighbors. It is located in Montecito, California, although at a first glance you might think its a European home due to its design.

The owners enjoy high quality comfort and at the same time are completely surrounded by nature.
The residence counts with 5 bedrooms and 5+ bathrooms, and wide living and dining rooms. The kitchen is highly designed, spacious, bright and functional at the same time. The house also has a large wine cellar, and what can be described as corridors or areas that have been decorated with pieces of art from the owner’s collection.

It also has an unusual garage, to name it, with a space for 32 cars that currently accommodates the owner’s entire collection of classic cars.

If we look at the property from the main entrance, it gives us the idea of a one level house, because we can only appreciate a single level above the ground. However, the architect actually played with the uneven piece of land to build an inferior level, which is also quite exterior, where the garage seen in the picture is located.

It is difficult to find a flaw in the house’s design or decoration. I believe it is visually stunning and that conveys a feeling of fresh luxury …… But if I were to live in it, and if I am allowed a suggestion, it wouldn’t hurt to put some blinds in the bedrooms to avoid the morning light and to get more privacy, and perhaps to make it warmer.

From an architectural point of view, it does not add anything new, since it is similar to the Glass House designed by architect Mies van der Rohe, founding father of the theory – less is more – where we also see a minimum number of different materials used, and the avoidance of ornamental decorations. The idea being that the glass transparency allows the visitor to feel protected by the roof, but without the feeling of being inside a building because its transparency makes the exterior its decorative element.

(II) HOMES in China

27 August, 2011 No Comments

This post is based on the conclusions of a Spanish entrepreneur who moved with his family to China, and he did his own market research to find a home there.

In China, homes are concessions of 70 years (apparently, they are considering to extend the concession to 90 years). If an investor purchases a brand new home, the concession is for the whole period.

In regards to the Real Estate second hand market;

* If the home is bought in the second hand market, the new owner should subtract the years that the home was previously inhabited to the total period of the concession.
* An interesting fact is that there is small market for rehabilitation of buildings or homes. Chinese are not used to perform regular maintenance to a home (ie; to give maintenance to the building’s garage or facades, or to paint the stairs and the house itself). This leads to visible impairments in a short period of time and therefore the buyer chooses to buy a new apartment or house. (This might be a possible gap in the market that should be carefully studied and be a great business opportunity).
* It could be inferred that second-hand homes in China are not as attractive as new homes. The vast majority tend to search for first hand properties due to the large existing supply across the country. We are talking about an immense market of new homes. However, in the country’s main cities, especially in the city centre (first ring) where the housing market has settled, supply of homes in the second hand market does exist.

The loans offered for the purchase of a home, can amount to 50% of the total investment. NO matter if home prices are fixed, one should always negotiate with the seller, in addition to a 2% discount for early payment. The realtor’s commission is paid by both parties.

Since China is a developing country of considerable size, large cities such as Beijing or Shanghai are not the only ones experiencing this kind of growth, existing cities in the suburbs referred to as “third” or “fourth ring” also follow this trend. These peripheral areas are usually well connected with either high speed trains or a growing subway network.

High speed train networks communicate in a quickly manner people’s homes with the city centers and workplaces. As well as the subway, which makes up the price a house along a station and with good communication (as would happen here).

There are ghost towns, mostly bought by investors who want to own. Taking into account that his mentality is geared toward work all day, have few expenses, and thus, saving. This allowed them to pay a flat to a son (usually one child per family), although now  it is changing, as children salaries are older than the parents’.

In order to appreciate the different areas, despite the large price increase that homes have suffered throughout the country, we see that:

The Hainan Province is a high class residential area with tax advantages. There are promotions of modern design, with resorts and golf courses. It is a very nice, and quite wet area due to its proximity to the sea, located in the south of the country. It is best to buy high apartments and away from the sea to avoid deterioration. The capital, Haikou, and the area of Sanya are also quite expensive. Sanya is a tourist town with an artificial island connected by a bridge. The group of MAD Architects has designed PHOENIX 2, a luxury destination that will be completed by 2014. Since Northern China is very cold, this area is considered a good summer place to spend under the sun. Its target customers are Russian and Northern Chinese. The price of housing in the area is rising at a fast pace, reaching five times its annual price.

Other parts of China are more affordable. Areas that can be a good place to reside are: Guangzhou (near Hong Kong), and Guiling, a beautiful city that will be connected to Shanghai by a high speed train (340km / h), that is still under construction. The price of the area will rise considerably. As of 2010, the highest price to pay would be around 2,000 € / m2, but one can also find housing for 200 € / m2 outside the cities.

Beijing, the capital, has a very extreme weather, such that good conditions only last two months because August can reach up to 40º C. It’s a dense city in terms of people and with high pollution levels. It would be interesting to buy a house in the capital for investment purposes.

(I) HOMES in China

25 August, 2011 No Comments

The Chinese market is a market in which companies from all over the world will settle sooner or later, there will be a predictable increase in investment in homes and offices from foreigners. The average national wage is quite low to be able to rent an apartment or office space, which is why it is not a common alternative among Chinese people. When comparing both options, purchasing a space seems to be cheaper in the long run.

Here are some interesting legal/administrative details for foreign investors looking to buy a property in Beijing (published on the web I am not positive; but I suppose that the conditions of foreign real estate investment in Beijing should be similar to the ones in the rest of the country.

Nowadays, it takes a series of permits and requirements that make this transaction a bit more complicated:

1. If you want to purchase a home in Beijing, you would need to request a certificate to the B. Municipal Public Security Bureau of Beijing, and it is mandatory that you have been working or studying in China for at least a year.
2. Foreign companies or organizations that have branches or agencies in Beijing, must certify in a written manner that the homes bought are used only for their own use, and prove their legal status.
3. In the event that the purpose of the purchase of dwellings is to rent, sale, or for commercial use, investors must submit a certificate showing the operations to be performed, and a certificate proving that the company is legally established in the country.
4. Foreign embassies in China, representatives of international organizations, and individuals who possess a “diplomatic status” must present a document from the Ministry of Foreign Affairs in order to buy a home.
5. In other words, what Chinese want is people who buy a home to live there, not for other purposes. They must buy the asset under their name (which, in theory, would exclude the possibility of purchasing it as a foreign corporation).

Real estate market in china

In conclusion, foreigners may only own a house in the capital, Beijing (China), as a dwelling, without the right sell or rent it. The new regulation that limits the real estate investment requires foreign buyers to show that they have been living in the capital for over a year as a student or for work reasons.

To buy a property for investment or business purposes, an investor must first establish a company and obtain approval from the authorities. The Investment in the sector, the constant increase in house prices and its consequences will be discussed in the next post.

ISLANDS: lost paradises for sale or rent

25 August, 2011 No Comments









Reagrding an article published during the summer of 2010 in the British newspaper “The Guardian”, the possibility was raised that the Greek Government put on sale some of its islands to partially relieve the problems with its debt as a result of the crisis. The idea was that given the number of uninhabited islands that Greece has (there are only 200 inhabited but a total of around 2,000 islands), part of this land could be sold to attract investors that at the same time generate employment and wealth. However, although there may have been some islands for sale or rent, the Greek government quickly came out and denied the rumors.

When speaking of an island for sale, it is rare that the buyer is an individual who wants it for personal use (see below the list of famous names and their private islands). In the majority of cases the purpose is to build some type of resort, which in the long run becomes a real estate investment….. far from the romantic idea of going away and getting lost forever somewhere in the Caribbean Sea.

A far more affordable alternative would be to rent, either for business conventions or groups of individuals going on vacation.

Legally speaking, whoever purchases an island must be willing to accept the rules, laws and regulations of the country to which it belongs. The idea of buying an island to become an independent country or mini-nation is not possible. An island is a piece of land surrounded by water, which besides this fact, should be treated like any other purchase of land. However, bear in mind that there are countries that require a prior environmental study before the purchase of the island, since an island is usually considered a protected area, it is actually treated differently than a purchase of an ordinary lot.

Many governments prefer to keep their islands, in fear that they will be purchased by foreign capital,  since they usually belong to developing countries whose nationals do not have the budget.

The supply of tropical islands is quite extensive, in South America, Caribbean, Bahamas, the Philippines, whether for sale or rent. Other countries like Canada or the UK also have a lot of available supply of this type.

Those who’ve bought their own island, are often celebrities, businessmen, athletes, and pop or movie stars, whose idea is to have a piece of land surrounded by sea for their own enjoyment.
For further information of islands for sale around the world, ranked by price, geographic area or activities that can be developed log in the following websites:

LEDS, the immediate future of illumination.

20 August, 2011 No Comments

LED stands for “light emitting diode”
Nowadays it is considered one of the best options to lighten a home or a building, as LEDs consume 1W, but yield like a 25W bulb.

In regards to the question “What should I choose, light bulbs or LEDs? LEDs savings against a low-energy bulb are highly superior, and also avoid waste problems  posed from normal bulbs when they stop working, as CFLs contain mercury vapor. LEDs have a long life in comparison to a normal light bulb; a normal light bulb reaches 1,000 hours of light, low-energy bulb a maximum of 10,000 hours of light and a LED can live up to 150,000 hours of light. There is a noticeable quality gap among LEDs and regular bulbs.

LEDs look better on buildings than the classic nighttime illumination does, since it does not dazzle, and the light is more intense.

LEDs are semiconductor devices that emit monochromatic light depending on the diode used. They are very versatile and can be used on facades, traffic lights (we can notice the difference of modern traffic lights with visible dots and the old traffic lights – LED based traffic lights can be seen without much effort and do not dazzle in bright days), flashlights, lights for the home, cars and even the TV remote.

In LED technology, the energy captured is directly transformed into light, not constituting a source of heat, thus referred to as cold light.

There are many buildings in Barcelona that have this kind of lighting in their façade such as:
1 – The AGBAR TOWER, whose illumination is based on thousands of LEDs, has a surprisingly low electricity bill, its light is reflected on the aluminum plates that cover the concrete surface of the building, so that what is perceived from the outside is just a reflection, because the LEDs are facing the building without projecting the light to the exterior or into the sky, thus trying to avoid light pollution in the area.


The facade is characterized by a complex lighting system that consists of strips of glass, lit by 4,200 blue LEDs, creating a transparency and reflection effect quickly associated with water. This building was awarded with the International Lighting Design Award, granted in the US for the innovative lighting effect of the building’s exterior. The project belongs to FERRATER Architects, from the architectural study OAB.

3 – W Hotel in Barcelona

Designed by architect R. Bofill, a line of white LEDs was placed all over the hotel’s facade enhancing its architectural silhouette.

There are other buildings in Barcelona that are currently testing the possibility of illuminating their facades with LEDs such as:

The Hesperia Tower Hotel, in Granvia, or the Bullfighting arena “Les Arenes”, recently rebuilt into a mall. Its perimeter will be lightened with LEDs allowing the possibility to change color depending on what kind of event is being hosted. The idea is that LED light will be projected from the inside to the outside through the horseshoe arches of the Neomudejar architecture.

Even though I suppose this type of lighting is somewhat inconvenient (not a cheap initial investment, although promises savings in the long run), it will be resolved shortly, due to the benefits that has to offer in comparison to the existing conventional lighting in the market, and not just for its designs, but for its potential savings. There is an R&D project for LED bulbs going on, in which LEITAT and The National Center for Microelectronics and Philips are collaborating with other European companies with the purpose to develop a LED-based light bulb to commercialize for household use. The project was submitted to the European Union in April of 2011.

Also, the Japanese Company Toshiba, with a wide expertise in the computer chips sector, is developing bulbs that produce LED-based lighting. The light bulb will provide the equivalent to 100 watts of light while consuming only 9, with a 3 year warranty, and providing close to 40,000 hours of life. This product is already present in France, Germany and the UK, competing with Philips and Osram. (Expansion 08.10)

Jean Nouvel’s Architecture – Pritzker Prize

19 August, 2011 No Comments

-Agbar Tower- Barcelona, Spain.

The tower is illuminated with thousands of LEDs (light emitting diodes) synchronized.

These LEDs create an interesting color effect such as Blau-Grana (blue and maroon), among the many other possible combinations, since this system allows to use multiple colors while consuming 80% less energy than conventional bulbs do.

- The new National Museum of Qatar, in the Middle East, presents a design that follows the lines of the natural stone referred to as the desert’s rose stone. Within the new design he incorporated the old museum. The Museum, currently under construction, is scheduled to open to the public in 2013.

The Pritzker Architecture Prize rewards architects who show, through their projects, great creativity and who build functional and high quality construction buildings, thus contributing to enrich humanity.

Among the architects who receive this annual award presented by the U.S. Company HYATT, we find Jean Nouvel (France 1945) who was awarded with it in 2008.

Mr Nouvel welcomes every new project without any preconceived ideas, which is why each of his works differs from his previous projects. However, there are common elements throughout his work such as transparency, light and shadows, and the search for the harmonious integration of his work with the surrounding environment.

2010 World Expo Shanghai, China

17 August, 2011 No Comments

Much has been said about the Expo, which closed its doors on October 31 2010, but there are always uncovered pictures and details that dazzle and we were not aware of. The central theme of the exhibition is “A Better City, A Better Life,” representing the common desire of all societies to have urban nucleus in accordance with modern life, welfare and sustainable development.

At this Expo, cities were able to directly participate, and for that reason, a space referred to as Best Urban Practices Area was created, where several cities around the world presented their experiences and proposals, as well as their point of view of a better model of urban development. Spain was represented by three cities: Madrid, Barcelona, ​​Bilbao.

Given the size and the number of participating countries, the Expo was considered the largest international exhibition to date, with the representation of 192 states and 50 international organizations.

The Chinese Pavilion aimed to show visitors the Chinese culture and its traditions. Its shape was inspired by the ancient Chinese imperial crowns, and the facade, with four columns and a central body in the form of a truncated pyramid, is covered with painted steel beams, twisted in accordance to the Dougong Technique. The ceiling has the shape of a Sudoku. The urban development in China from old times to present times was shown in the Pavilion.

The Expo Cultural Center, designed by the ECADI team of Chinese Architects, was one of the 5 buildings that would remain intact after the Expo disappeared. It looks like a flying saucer, which at night, becomes what appears to be a floating city.

The EXPO HUB, a 1km walk that acts as the access point of the streets and the river, is built with a plastic membrane supported by 50 masts and six funnel-shaped columns.

this picture is the interior of one of the pavilions. They delve into different aspects of urban development:

* The Thematic Pavilion: based on the architectural techniques Shikumen (typical of Shanghai), with two facades with an origami design.

* The Urbanian Pavilion: dedicated to people living in cities. Made by the Dutch architect Herman Kossmann and Mark Jong

* City Hall Being: shows the daily life in the cities, seen as living organisms.

* The Urban Planet Pavilion: represents the process of urbanization at a global level and its interaction with the environment and the countryside.

* The Urban Footprints Pavilion: its purpose was to cover the development of cities from ancient times to current times.