Assets of Bulgarian REITs Up by 67% in One Year

The assets of Bulgarian real estate investment trusts (REIT) amounted to 1.54 bln leva as at the end of the second quarter of 2008, up by 67.3% year on year, data of the Financial Supervision Commission (FSC) show. It should be taken into consideration that a total of 68 REITs were included in FSC's statistical data for 2008, compared to 47 a year earlier.The combined assets of REIT's rose by 7.68% in the second quarter of 2008, compared to the first three months of the year. The REIT's managed 1.43 bln leva assets as at the end of March 2008.A total 56 of the REITs invest in real estate properties other than arable land. They managed assets for 925.78 mln leva as at the end of June 2008.Their assets amounted to 512.22 mln leva a year earlier and stood at 857.93 mln leva as at the end of the first quarter of 2008.FairPlay Properties REIT (114.13 mln leva), Serdika Properties REIT (80.69 mln leva) and Arco Twoers REIT (80.53 mln leva) are the three biggest companies in terms of assets. The last two, however, are not traded on the Bulgarian Stock Exchange (BSE).The six REITs specializing in the securitization of arable land managed assets for 532.4 mln leva as at the end of the first half of 2008.The assets of the six REITs stood at 300.41 mln leva a year earlier and at 482.52 mln leva as at the end of March 2008.The three biggest funds in terms of assets in this group are Bulgarian Real Estate Fund REIT (183.43 mln leva), Elana Agricultural Land Opportunity Fund (153.56 mln leva) and Advance Terrafund REIT (102.35 mln leva).The REIT specializing in the securitization of receivables rank third. Their number has increased from 7 to 9 in one year, while the value of their assets has gone down from 95.38 mln leva as at the end of June 2007 to 77.36 mln leva a year later. The assets of these REIT's totaled 85.6 mln leva in the first quarter of 2008.The top three REIT's in this group in terms of assets are Capital Management REIT (48.36 mln leva), Transinvestment REIT (15.33 mln leva) и Energetics & Energy Savings Fund SPV-Sofia (7.28 mln leva).Source: Profit.bg

Homebuilding in US at 17-year low

The number of homes and apartments being built in the US sank in July to the lowest level in more than 17 years, government figures show. Builders started work on 965,000 properties, on an annualised basis, from 1.08 million in June, the Commerce Department said. However, this was not as bleak as some had been expecting. Separately, inflationary pressures saw US wholesale prices shoot ahead by 1.2% in July - its fastest pace in 27 years. Core inflation, which strips out energy and food costs, climbed by 0.7% from June, the Labor Department said, well above the the 0.2% rise which had been forecast. The rapid wholesale inflation seen in July was largely linked to energy costs during the month, which saw crude oil hit a record price of $147.27 per barrel, sending petrol prices soaring. But there are hopes that prices rises will abate, now that the price of oil has fallen by more than $30 per barrel. "Though commodity prices have come down significantly from record highs in mid-July and the dollar has strengthened, consumers can still expect to see increased inflation for some time to come as the producer price pressures feed through to consumer prices," said Arek Ohanissian, an economist at the CEBR. Grim Economists have been studying forward-looking information for signs that the US housing slump was past its worst. However, the Commerce Department data made for grim reading, with the number of construction permits issued - seen as a reliable sign of future activity - down 17.7% on an annual basis. And the number of new homes being constructed last month was down by 39.2% compared with July 2007. "The continued weakening of the housing market is an additional pressure and households will feel further squeezed in terms of real disposable income," said Mr Ohanissian. He said that "given this state of affairs and the general weakness of the economy" the Federal Reserve was likely to keep interest rates low at 2% - despite rising inflation.

The Property Market Turnover Topped 11 Billion Leva Last Year

Last year construction activity in Bulgaria was up by 15% which makes it one of the fastest developing sectors in the country, according to a CED analysis. The hike was prompted by the demand for modern residential buildings, commercial and administrative properties, warehouses and logistics centers. During Bulgaria's first year as a EU member country the prices of construction materials and services rose by an average of 12.6%. This year the price hike is expected to be a little lower – at 11.8%. The appreciation is a result of the growing prices globally and of the more expensive services on the local market. The active construction sector stimulates all activities related to real estate. The record turnover of 11.36 bln euros made the sector the absolute leader in Bulgaria last year. According to a Global Property Guide survey dated January 2008 Bulgaria was number one in the world in terms of annual appreciation of properties (30%) last year. Some are talking about a market bubble, but analysts say that even though the price growth is expected to slow down, there are no indications that they will be declining any time soon. Most Bulgarians finance their home purchases with credits. December 2007 was a record month for the crediting sector in the country in terms of both size and number. The reason for that tendency are the high prices. Most banks have raised the amount of financing from 70% to 90% of the home price. The average size of credits reached 51,148 euros at the end of the year, passing the psychological 100,000 BGN. The market of commercial properties continues its dynamic development, the CED analysis also states. Demand for properties near newly opened commercial centers is soaring. Demand for office space is expected to stay stable. The Law on floor property management was not passed in 2007 and because of its three-year long delay Bulgaria will not receive funds via the Residential Policy framework within the EU's Regional Development program by 2010. After several attempts to pass the law, the Government gave a green light to the project that concerns some 4.5 mln people in Bulgaria who live in the apartment buildings. This year Bulgaria has to introduce the Eurocode 8 in construction projects, which concerns the development of seismic maps. All EU countries must introduce the code by 2011.