NEWS FRONT
What you need to know in key markets around the globe
Emerging Markets Take Over Hotel Investment
PORTSMOUTH, NH–In this post-recessionary
environment, global hotel investment
seems to be moving to the emerging markets. Pipelines in the Europe, Middle East
and Africa region are drying up, whereas
China and India are experiencing a growth
explosion. In the Americas, savvy investors
are bypassing the flat-growth US and looking at areas like Brazil and Mexico, where
experts say a growing middle class wants to
spend its newfound wealth domestically.
The EMEA region, popular for the past
decade, is now seeing its construction pipeline shrink for the eighth quarter in a row,
according to Portsmouth, NH-based
Lodging Econometrics’ president, Pat
Ford. He notes there are a several factors
behind the slowdown of hotel development, the foremost being the increased
difficulty in obtaining financing—in
Europe because of the banking crisis and in
the Middle East because the government
sponsors have run out of cash to finance
huge projects in Dubai and Abu Dhabi.
China and India are attracting investment, notably from White Plains, NY-based
Starwood Hotels & Resorts Worldwide. The
company recently announced plans to
OTTAWA, ONTARIO–Chicago-based Jones Lang
LaSalle has hired Jean Chalifour to lead
its brokerage services platform here. As
senior vice president, he willl provide
advisory and transaction services to office-user clients.
For more executive moves, please visit
www.globest.com/executivewatch.
Executive Moves
open eight more hotels in China before the
end of the year. It also signed a deal with
Duet India Hotels Ltd. and JHM Interstate
Hotels India to build Four Points by
Sheraton properties in the country. Simon
Turner, president of global development
for Starwood, said Starwood’s pipelines in
the two countries show no signs of
slowing.—Robert Carr
Vital Signs
Highest-Ticket Shopping Streets
New York City’s Fifth Avenue, where rents increased
by 8.8%, kept its number-one spot as the world’s
most expensive retail address for the ninth year
running, according to Cushman & Wakefield. But
the rest of the high-priced retail markets are found
abroad. Causeway Bay in Hong Kong remained in
second place. London’s New Bond Street leapt two
rankings, to overtake Avenue des Champs-Elysées
in Paris—which dropped the farthest with a 9.5%
rental decrease—as the most expensive location in
Europe. The emerging markets performed strongly
due to strong tourism and demand from international
retailers. Haddock Lobo Street in Sao Paulo was the
biggest riser globally, with rents increasing by 9.2%.
Source: Cushman & Wakefield
1. New York City | Fifth Avenue
2. China | Hong Kong | Causeway Bay
3. Japan | Tokyo | Ginza
4. UK | London | New Bond Street
5. France | Paris | Avenue des Champs-Elysées
6. Italy | Milan | Via Montenapoleone
7. Switzerland | Zurich | Bahnhofstrasse
8. South Korea | Seoul | Myeongdong
9. Australia | Sydney | Pitt Street Mall
10. Germany | Munich | Kaufingerstrasse
Rumblings of Brazilian Protectionism?
The Agrarian Minister for Brazil, Guilherme Cassel, recently
announced that he and his governmental peers are extremely concerned that foreign entities are acquiring too many tracts of rural
farmland in the country. He claims that Brazil’s strategic interest—
being able to provide food for its citizens—is being threatened. No
doubt he envisions that growth in the global
population and income levels will result in an
increase in food-consumption levels, perhaps
putting a strain on Brazil’s ability to provide
food, natural resources
and water for its own
people.
The Brazil government’s strategic need to
provide and plan for that provision of sufficient foodstuffs is paramount. Cassel’s position is that foreign powers need not produce food in Brazil; to
maintain food security, Brazilian lands must remain in Brazilian
hands. The minister’s spokesperson, Denise Mantovani,
announced that an amendment will be debated wherein foreign
farmland ownership will be strictly controlled and limited.
In light of the booming agricultural industry—Brazil enjoyed a
US$60-billion positive trade balance in 2008—and the large proportion of foreign direct investment in Brazil dedicated to the
agricultural sector, many global experts are expected to react nega-
By David Berger
tively to this effort. No doubt the arguments will be that this is just
an excuse to practice another form of protectionism and serves as
a further example of the chauvinistic economic and bureaucratic
policies that have plagued Brazil and its development for decades.
Is Cassel’s initiative a cry of agricultural jingoism or a legitimate
concern to protect their resources for future generations? Probably
a lot of the former and little of the latter. First, one needs to understand there is a sentiment of territorial autonomy that has run strong
in Brazil for over 100 years, and there exists a strong concern and
anxiety for protecting the country’s assets from foreign invaders.
This latest “incursion” of foreigners into Brazilian land ownership
is a sign to some Brazilians that they could lose control of their own
destiny. However, a law already exists in Brazil that states that only
residents and citizens of Brazil may own rural tracts of agricultural
land. And many foreign companies and individuals have sidestepped
this edict by setting up Brazilian shell companies and using that legal
and fiscal status to acquire large swathes of farmland.
Just how this will impact agricultural investment in Brazil is yet to
be seen. Many believe it will have very little negative effect; investment will continue due to domestic and international demand.
Based in Miami, David Berger is managing director for Latin America and the
Caribbean at NAI Global. He may be contacted at dberger@naiglobal.com.
The views expressed here are the author’s own.
