Building and property sales revive after a big Covid hit, plus Apple is poised to launch a 5G-capable iPhone 12
Commercial property slowly coming back to life
A new report from commercial property brokers Colliers International suggests signs of life are beginning to re-emerge in the sector, though the hit from Covid-19 this year has been significant.
Pre-covid commercial sales volumes had been expected to reach $9.5 billion for the 12 months to June 2020, around 3.5 percent up on 2019 numbers.
Instead, commercial sales volumes slumped dramatically with just 814 properties changing hands in the six months from January to June, about a quarter of the 3,258 transactions for the full 12-month period.
In recent months there has been a pick-up in portfolio activity among listed property with those having lower geared balance sheets looking to pick up assets and others looking to divest non-core properties at premiums to book value.
Stride Property recently purchased 34 Shortland St for $67.5 million while Goodman Property, acquired a 13.3-hectare site next to its Savill Link industrial estate in Otahuhu for $70 million
Retail property group Investore also bought properties in Carr Rd, Mt Wellington Shopping Centre and Bay Central centre, for a combined $140.8 million during the year.
In its latest market review, Colliers noted the industrial and large format retail sectors continue to attract the largest share of the property investment pie, with 1,675 industrial deals valued at $3.2 billion for the year to June, retail deals coming in at $1.4 billion, office sales at $1.6 billion and commercial mixed and vacant land accounting for the remainder, at $1.3 billion.
Colliers also noted Auckland would have more than 85,000 square metres of new retail space coming on stream by the end of 2022, adding about 4.7 percent to the total retail stock pool. Of that, shopping centres would contribute almost 40 percent of the current supply pipeline.
New Apple iPhone set for release next week
Apple looks set to finally release its much anticipated 5G capable iPhone next week.
Invitations have been sent to the online launch which has been dubbed “Hi, Speed.”
The tech giant is likely to announce an iPhone 12 with 5G capabilities, the first iPhone to connect to the new, ultra-fast wireless network. Analysts expect the 5G iPhone to generate a “super cycle” of device upgrades, potentially prompting more people than usual to buy the new device.
Apple typically announces new iPhones in September, but this year the launch was delayed after the coronavirus pandemic disrupted supply chains. Apple previously said new iPhones would be shipped slightly later than usual this year.
Apple is somewhat late to the 5G phone market. It’s new phone will join a growing list of options already available from Google, Motorola, Samsung, Huawei, LG and others.
Objection lodged in the High Court to Metlifecare takeover
A Metlifecare shareholder has taken the unusual step of lodging an objection with the High Court to Sweden-based EQT’s $1.28 billion scheme of arrangement to take over Metlifecare.
Takeovers Panel CEO Andrew Hudson confirmed the objection to the $6 per share scheme was lodged yesterday, just 24 hours before the deadline for objections expired.
Last week’s shareholder vote overwhelmingly supported the scheme with 90.7 percent of the votes cast in favour, representing nearly 70 percent of the shares on issue and satisfying the legal requirement for the deal to proceed.
Hudson said the Takeovers Panel would meet to consider whether to give the scheme a letter of no objection, one of the legal requirements before the High Court approves the scheme.
Their decision would likely be made next week, he said.
The panel’s decision would take into consideration whether there was adequate disclosure and whether it believes shareholders were provided with sufficient information to make an informed decision on whether to approve the scheme.
But the High Court will have the final say. The court’s decision will apply a broader test, including whether a reasonable businessperson would enter into such a scheme.
Dark clouds remain on the horizon US Fed Reserve Chairman warns
US Fed Chairman Jerome Powell has warned Americans the country’s economy is not out of the woods despite the significant rebound on financial markets.
“America is on the long road to economic recovery from the pandemic recession, but dark clouds remain on the horizon” he reminded his audience.
Speaking at the US National Association for Business Economics annual meeting, Powell said the US economy remains in danger of shifting into reverse once again as a rise in Covid-19 infections increases concerns of potentially more damage being inflicted.
A second wave of coronavirus could “more significantly limit economic activity, not to mention the tragic effects on lives and well-being,” Powell said. “Managing this risk as the expansion continues will require following medical experts’ guidance, including using masks and social-distancing measures.”
Powell also reiterated his calls for more fiscal stimulus aimed at supporting America’s most vulnerable.
But just hours after his appeal, President Donald Trump announced on Twitter he had halted negotiations for a new stimulus package saying that “after he wins the election” he will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.
Yet Powell said Tuesday the risks of Congress pouring too much stimulus into the economy are far lower than the risk of not doing enough. Although government spending is adding to an already sky-high federal budget, lawmakers should act, Powell argued.
European economic forecasts looking increasingly more dire
Major European economies are downgrading already dire economic forecasts as a second wave of coronavirus infections devastate the continent, with over 6.3 million cases now reported in the region.
The Bank of Spain warned this week that strict measures to contain the spike in virus cases could push the country into a worse-than-expected economic crisis. The bank warned that in its worst-case scenario, GDP could contract by almost 13 percent this year.
Political infighting in Spain has worsened as infections have risen, with the capital Madrid particularly badly hit, leading to parts of the city being put in lockdown. Spain has the highest number of cases in Europe with 825,410 reported infections. The WHO puts Europe’s total tally of cases at just under 6,338,000.
France, the euro zone’s second largest economy, is also warning an economic rebound post-lockdown is likely to plateau in the fourth quarter, as a spike in cases stifles business activity. France has the second highest number of infections after Spain, with 675,736 confirmed cases. Its economy is expected to contract 9 percent this year.
Germany, Europe’s largest economy, has announced further restrictions in major cities, including Berlin and Frankfurt, to stem a rise in cases.
In Berlin, restaurants, bars, local shops and other businesses will have to shut between 11 pm and 6 am, while in Frankfurt, bars and restaurants will have to close at 10 pm. Germany’s central bank, the Bundesbank, said in June it expected economic output to shrink by 7 percent in 2020.
