Retail Properties Tops Among Foreign Investors
Retail properties are on foreign investors’ “most-wanted” lists, according to a survey by the Association of Foreign Investors in Real Estate (AFIRE). For 2008, foreign investors identified retail properties as the No. 1 property type for their investment dollars. Hotels ranked second.
“Our survey shows a dramatic shift in interest among property types on the part of foreign investors,” said James A. Fetgatter, chief executive, AFIRE, Washington, D.C. “In the last survey, retail properties ranked fifth and offices first. This year, offices have fallen to the bottom of investors’ interest list and retail has risen to the top.”
On average, survey respondents said that slightly more than 50% of their real estate planned acquisitions in 2008 will be allocated to the United States. While the percentage is roughly the same as in 2007, the actual dollar amount is expected to increase by 16%.
Foreign investors consider real estate in the United States as having the best opportunity for capital appreciation, according to the survey. But China, which ranks second, is closing the gap.
“One of the significant findings that cannot be overlooked is the jump in investors’ confidence in China,” Fetgatter said. “The gap between the United States and China has narrowed from 27 percentage points in 2005 to fewer than five percentage points in 2007.”
The ranking of the top five U.S. cities for foreign investment echoed respondents’ choices in 2007:
The survey was conducted among AFIRE’s nearly 200 members, who collectively hold $700 billion of cross-border real estate, including $240 billion in the United States. The survey was conducted by The James A. Graaskamp Center for Real Estate, University of Wisconsin, at Madison.
Fresh & Easy to Expand in Calif.
Sacramento Tesco has named 17 locations for its Fresh & Easy Neighborhood Market stores in the Sacramento area starting next year.
After debuting in Southern California in November, Fresh & Easy has opened 55 stores combined in Southern California, Las Vegas and Phoenix.
Limited Brands Cuts Real Estate Projects
Columbus, Ohio Limited Brands Inc. said Thursday that it is cutting the number of real estate projects planned for this year as it tries to improve results in its stores.
The retailer, which operates the Victoria’s Secret and Bath & Body Works chains, made the comments during a conference call. It said the reduction in real estate projects should lower its planned capital expenditures by $85 million.
On Wednesday, Limited Brands said its fourth-quarter profit fell 12% on a substantial decline in sales following last summer’s decision to get out of the apparel business. Weak store traffic and scaled-back circulation of its Victoria’s Secret catalog also contributed to the decline.
Limited Brands said it made $388.6 million compared with $439.8 million in the same quarter a year ago. Sales totaled $3.28 billion for the quarter, down from $4.02 billion a year earlier.
In July, the company transferred 75% ownership of its Limited Stores chain to buyout firm Sun Capital Partners Inc. and sold a 75% interest in its Express brand to affiliates of private equity firm Golden Gate Capital.