Hi

So far this year we've produced market forecast reports on Czech and Slovakia - one on Serbia will be out very shortly.

We are planning to produce a report, which will take the pulse of a country's property market and assess its potential for investors, at a rate of around one a month.

We don't want to plan too far ahead as we want to be able to respond to changing circumstances.

But so far on our list we have: Bulgaria (full update); Romania (full update); Brazil and India.

When we look at a market, we'll make an assessment after initial research as to whether we think there is any opportunity now or in the foreseeable future and therefore it's a market to watch. If we conclude that there isn't real potential on the horizon for whatever reason, we'll use our research to produce an extended article explaining our findings, rather than producing a full length market report, which would seem like a bit of a waste.

We're keen to respond to what PS members want, so how about telling us where you would like us to point our analysts - which countries, themes, strategies.

Time to take another look at Hungary perhaps, or the Baltics? We've got lots of views and ideas, but we want to hear yours.

Post suggestions here, please, or contact us by email - robin.bowman@visiumgroup.com

It'd be great to hear from you.

Thanks very much.

hi robin

the suggestions look sensible. personally, i'd also be interested in argentina (while the pound is strong against the dollar). but more important than geography, i'm interested in solidity of forecasts. does PS ever review its previous forecasts and analyze the reasons for cases where reality turns out differently? (check the forum for some examples).

if PS had the confidence to carry out and share such analysis with us, i for one would feel more reassured about investing in further PS developments. imagine you were trusting your own hard-won savings to someone else's judgement. wouldn't you want to know that it was someone able to learn from their mistakes?

best regards,
dan

Hi,

from analytical point of view, I would like to see PS focus on India and Brasil, mainly on the big cities of those countries, as I think currently those city areas are not beying yet deeply investigated by europian investors and can hide promising potential. It would be interesting to learn something new about those markets as well.

from investment point of view, I would like that PS continues to focus on getting :
- better payment terms for investors then for locals, preferable 2 stages only
- as big discount as possible from the original developer's price list

If done well, 2 above items then would fully justify PS finding fee for me. Personally I have to see sense and added value before I invest with PS, in comparison to invest directly with developer. Greatly negotiated payment terms and price discount can make this sense for me.

To add more on this : in times of Google, Yahoo, Skype and cheap international calls it would be naive to think that investors can not check on analysis or go directly with developer and therefore I think that added value is directly linked to business success for this form of business. So far I think PS is doing this quite well and hope that quality of analysis and sales information will stay the same.

One more remark : as investment properties are all about money, it would be great to make sure that, when speaking about prices, there is always written if they are with or without VAT. When doing valuations, again it has to be clear everytime if the prices/numbers/figures are with or without VAT.

Cheers,
Marek

Hi Dan

Many thanks. Very useful feedback.

We have looked at Argentina previously - the main problem being a complete lack of finance for investors, but we will certainly go back on this location.

As for forecasts, I completely agree.

But I think forecasts have to be made on the basis of what is known and predictable when they are made. Invariably, there will be unforeseen and unforeseeable circumstances ahead and I personally think anyone who pretends or expects otherwise is kidding themselves. I don't think this devalues forecasts, merely puts them in the context of the real world.

Going forward, though, we will be making forecasts and reviewing them half yearly. If we got things wrong, we will certainly make public why we think this was so.

Hope this helps.
Cheers

Hi Marek


I certainly agree on India and Brazil - a look at India will be coming very shortly and Brazil in the first half of this year, if not sooner.

Your comments about what you expect from PS in terms of deals make sense to me and I know these are priorities for deal brokers. No harm in them being emphasised here.

The VAT point is a good one and I'm sure the investment report writers will take it on board.

Thanks for responding.


Cheers

Agree about India and Brazil - some other suggestions:

Elsewhere in S America, particularly Panama
How about Canada - Alberta in particular?

Huw

Warmer parts of Canada close great transport links. Most of Canada is in the snow belt with winter lasting at least a month longer than in the UK - short winters and long summers is preferrable.

Big problem with crime in certain cities such as Toronto.

When I think of the attactions of Canada, I think of British Columbia, Alberta and towns like Niagara on the Lake (thought Id throw in a tourist town - close to Toronto / Niagara falls, but not too close but in a wine growing region, down side is transport links - no rail).

Stunning views of Vancouver situated on the water with Mountains surrounding it - Vancouver has everything - and prices reflect it unfortunately. Somewhere close to Vancouver would be good.

Oil sands is big at the moment ...... boom times for local populations - the price is massive environmental damage. Might be good for investment return - but my heart is unlikely to be in it.

..............................................................

Hungary should be on that list for a variety of reasons, Budapest is a fantastic city - now over the worst of austerity measures the government now looking to ease the tax burden of population.

1. 30 Billion Euros investment from EU - funds now flowing.
2. Change in Capital gains tax from April to a lower rate of 16% (handy if you think that UK is going to be 18% from April .... nice 2% to offset costs - thus paying no extra tax in UK.
3. Tax change now means that you only need to hold the property for 5 yrs to get to the lower CGT bracket (currently 15 yrs - changes in April).
4. The strongest argument for Hungary is its pure geographic location and the road network that Hungary is building - by far the best in the new EU accession countries. Bordered by 8 countries - a logistics wet dream - recently hosting US - Russia talks. The UN are locating more and more staff there.
5. Water purification plant will be finished 2010 - cleaning the Danube up.
6. Ring road (one of two being built) will be complete 2010 / 2012 allowing for traffic reduction measures to be put into pace in the centre of Budapest & also pedestrianization.
7. Revamp of metro lines and rolling stock - replacing soviet trains + new metro line.
8. Budapest has one of the lowest levels of office space in EU (compared to other major cities) this trend is rapidly correcting - international business staff need somewhere to live! (some say there is a oversupply of residential apartments in Budapest - not so for long if at all.

Just like in Romania the Hungarian people are now buying new stock to be free of 1970's build apartments. Apartments in good locations (where I have bought for example) there is 100% let rate.

9. Even WITHOUT increased demand - prices WILL rise by 20% over the next 3 yrs purely due to the increased costs of building in this day and age.
10. Airport expansion - increased no. of low cost airlines (Ryanair for example).

There are many others ...... but i just cant think of them all (need sleep).

Also another look at Germany would be interesting and where the opportunities in Germany really will be, and what will cause revaluation .

I sense the market there is relatively flat, maybe increasing very slightly but certainly under 10% per annum in Berlin-

My thoughts are

1. Opening of the labour market enforced by the EU will trigger significant migration- still 3-4 years off.

2. The opportunities are more in the former eastern states, and there is some evidence that populations are returning especially in Saxony. Maybe some off-plan PS opportunity, although more opportunity will remain in the secondary market. Western cities by comparison will offer limited opportunity

3. The move from a traditional rental market to an owner occupied market still seems rather slow, and holds back the market

4. As other CEE countries are growing strongly the valuation difference between Berlin and cities like Prague Bratislava and Bucharest will become even more pronounced. The latter 3 are still likely to win hands down on a 3-4 year term in relation to capital growth.

5. Germany is worth watching but CEE countries will keep it in autobahn slow lane as far as investment returns are concerned!

How about an update on the Ukraine?

I was in Kiev 2 weeks ago and astonished by the amount of new builds, the tax regime for investors in property is favorable and consumerism seems bouyant.

My colleague bought his apartment 2 years ago for 70K USD in a nice part of Kiev......current valuation is 500K USD after he spent 40K USD on refurbishment.

Maybe we have missed the boat?

Alan

Another look at the Baltics would interest me