Miami, Dubai and London Among Top Global Cities Enjoying Double-Digit Price Growth in 2012

South Beach, Miami

According to a new Global Cities Report by London-based real estate consulting firm Knight Frank, fifteen of the 26 cities tracked by the Prime Global Cities Index (58%) recorded flat or positive price growth in the year to September, but over the last quarter 20 of the 26 cities (77%) have seen flat or positive growth - indicating an improving scenario.

The index now stands 18.7% above its financial crisis low in Q2 2009 with Hong Kong, London and Beijing having been the strongest performers over this period, recording price growth of 52.9%, 45.4% and 39.5% respectively.

Five cities recorded double-digit price growth in the year to September; Jakarta, Dubai, Miami, Nairobi and London - a city from each of the five key world regions.

Knight Frank Global Cities Report Highlights for Q3, 2012

• The index rose by 1.1% in the three months to September, down from 1.4% last quarter

• Prime prices across the 26 cities tracked by the index increased by 3% in the 12 months to September

• Cities in Europe remain the weakest performers, recording a fall of 0.5% on average in the last 12 months

• Jakarta (up 28.5%) was the strongest performer in the year to September

• Economic uncertainty together with few strong-performing alternative asset classes is strengthening demand for luxury bricks and mortar

Dubai, UAE

Although Asia heads the pack - Jakarta recorded 28.5% annual growth - the results this quarter suggest that demand for luxury homes is only loosely linked to the strength of regional economies (Asia Pacific has only two cities in the top ten compared to Europe's three). Instead, the flow of international wealth and the attitudes of HNWIs are increasingly influential.

Cities such as Dubai, Miami, Nairobi and London are increasingly considered investment hubs for HNWIs in their wider regions. In the wake of the Arab Spring, Dubai has been seen as a relative safe haven for MENA buyers while Venezuelan and Brazilian investors have looked to Miami to limit their exposure to domestic political and economic volatility.

Not all prime residential markets are benefitting from the global economic uncertainty. In Paris, although prices held firm in the third quarter, sales activity was muted as buyers of all nationalities adopted a "wait and see" attitude. Vendors are unwilling to reduce prices until there is greater clarity from President Hollande and the Eurozone leaders in relation to the debt crisis.

Asia's prime markets look to be entering a period of more moderate growth due in part to the regulatory measures aimed at cooling prices and improving domestic affordability.

London, UK

James Price of Knight Frank's International Residential Development team tells World Property Channel, "Aside from London, it would appear the other strong performers are either those established international markets that experienced a lull but are now 'kicking on' again (e.g. Miami, Dubai) or those that could be described as second tier international cities - strong established markets, but not global 'gateway' cities (e.g. Zurich, Vienna, San Francisco), where interest has driven price rises from a lower base."

Blackstone Lays Out $200 Million In India's Biggest Acquisition Deal

New York City-based Blackstone is investing $200 million (Rs 1,000 crore) for a 50 percent stake in three Indian business parks totaling 10 million square feet. The deal is being called the largest of its kind to date in India.

The properties are Embassy Golf Link and Manyata Embassy Business Park in Bangalore and Embassy Tech Zone in Pune.

Embassy Property Developments is currently 51%-owned by Embassy, which will now purchase the remaining 49% of share capital from Mauritius-based financial investor Alta Vista. That transaction will make Alta Vista a subsidiary of Embassy Property Developments, according to the Asian Venture Capital Journal.

A Blackstone spokesman in New York said the private equity firm does not comment on pending or completed transactions.

The Economic Times of Mumbai reports the Blackstone deal beats Citigroup's acquisition of a Mumbai office building earlier this year for Rs 985 crore. That transaction eclipsed Maple Tree's Rs 800-crore buyout of two million square feet from Assetz Global Technology Park and Baring PE Partners' Rs 500-crore investment in RMZ Corp for six million square feet.

Embassy Golf Link is a five-million-square-foot, 65-acre, business park. Manyata Embassy Business Park is a 100-acre integrated mixed-use development business park with a developable area of 18.29 million square feet.

Embassy TechZone in Pune is spread over 70 acres with 52 acres designated for a special economic zone.

Big-name tenants at Embassy properties in Bangalore and Pune include IBM, Capgemini, Mercedes Benz, Atos Origin and Accenture. Blackstone and Embassy will jointly control and manage the entity in which the fund has invested. Embassy will be responsible for completing the project,

The Economic Times reports Embassy has developed nearly 25 million square feet  mainly in business parks valued at an estimated  Rs 10,000 crore ($2 billion US).

The company is also increasing its presence in the residential segment and has eight residential projects totaling 10.56 million square feet under construction. It has a total debt of Rs 1,200 crore, of which 85% is linked to rentals. The company has a total land bank of 1,300 acres in Bangalore.

Buffalo Lender Provides $92.6 Million to TIAA-CREF for Apartment Buy in Washington DC

MassCourt East End luxury apartments, Washington DC

M&T Realty Capital Corp., a wholly-owned subsidiary of 156-year-old Buffalo, NY-based M&T Bank (NYSE: MTB), has loaned New York City-based TIAA-CREF $92.6 million to buy the 371-unit MassCourt East End luxury apartments in the Mount Vernon Triangle neighborhood of Washington, DC.  Terms of the financing were not disclosed in a news release from the Washington office of HFF which arranged the deal.

India's First REIT Raises $81.3 million in Over-Subscribed Issue

Investors in Asia, Europe and the U.S., looking for a vehicle to fight inflation, have over-subscribed India's first real estate investment trust.  Singapore Stock Exchange-listed Ascendas India Trust (a-iTrust) closed when it reached $81.3 million (Singapore $100 million).

The trust was initially looking to raise $70 million Singapore dollars. (One Singapore dollar equals 81 cents US)

The private placement is offering new units in a-Trust. at 72 Singapore cents per unit. The joint placement agents were Citigroup Global Markets Singapore Pte. Ltd and DBS Bank Ltd.

According to the company's statement, the placement saw strong participation from Asian, U.S. and European investors and was about 2.6 times subscribed based on the upsized issue of S$100 million or 139 million New Units. The new units represent 18 per cent of existing units.

The company said the issue price of S$0.72 per new unit represents a discount of 9.2 per cent to the adjusted volume weighted average price (vwap) of S$0.7933 per unit for trades in the units on the SGX-ST for the full Market Day on September 27 and a 22 per cent premium to the net asset value per unit based on a-iTrust's unaudited financial results for the first quarter ending June 30.

An announcement will also be made when the date the new units are expected to be listed on the SGX-ST.

Ascendas India Trust was publicly listed in 2007. This  is the fund's first attempt in issuing a follow-on equity fund raising for its private placement. The money raised through this offer will be used to finance a-iTrust's initiatives, the company said.

a-iTrust is developing Aviator, a 6 lakh square feet multi-tenanted building in International Tech Park Bangalore (ITPB) due for completion in December 2013.