Solid Report for Trump Project in Panama

Kevin Brass — Mon, 07 Sep 2009 14:44:18 +0000

The Trump Ocean Club, the bellwether project under construction on the bay in Panama City, is still hitting its financial and construction targets, the developers told bondholders last week. Newland International Properties sold 23 units in the first half of the year, bringing the total sold to 832 of the 1,004 condominium and hotel units, according to the report, which can be found on the Panama Investor Blog.

While there have been accounts of steep discounts and stagnant sales in other Panama City towers, the Trump project is discounting units an average of only about 13 percent, Newland told investors. The average price for a two-bedroom unit is about $683,000 or $4,452 per square meter.

Like many projects that carry the Trump name, Newland is simply licensing The Donald’s brand. Widely believed to be the most expensive of the many new towers sprouting in Panama City, the Trump Ocean Club’s progress has been closely watched, amid concern the Panama City market is over heated.

Last year the Fitch Ratings service downgraded the project, due to “the significant deterioration in global real estate markets and an increase in liquidity risks associated with the timely payment of principal and interest on the notes.” Some analysts feared that some buyers would simply walk away from their deposits, but Newland reported only eight defaults. (Buyers are required to pay 30 percent during construction and 70 percent upon completion.)

The tower remains on schedule to open in August 2010, the developers say.

In U.K., Talk of ‘Sporadic and Shaky’ Recovery

Kevin Brass — Thu, 03 Sep 2009 16:07:52 +0000

As wishy-washy forecasts go, it doesn’t get much more wishy-washy than the Council of Mortgage Lenders prediction for activity in the U.K. Activity increased 26 percent from June to July, the highest level in nine months, according to the industry association’s latest report. But the CML wasn’t exactly popping corks. Lending activity in July was the lowest since 2001, down £11 billion from the July average of £27 billion (and nowhere near the £35 billion of 2007, the golden year of the frenzy).

“A further significant pick-up is unlikely with so many obstacles in place,” CML economist Paul Samter said in a statement. “As a result, we anticipate some seasonal slowing in lending volumes and housing transactions over the latter part of the year and the picture of a slow but more stable market to emerge.”

Not exactly words to whip up a market tornado. When Bank of England statistics released a few days later revealed a similar upward trend, CML’s Samter was quick to reiterate the council’s caution, noting the group sees “volatility” and down months ahead, “as the recovery is likely to be sporadic and shaky at first.”

The current move may be fueled primarily by high-end deals, Andrew Montlake of mortgage brokers Coreco told the Telegraph:

“This sector of the market tends to start moving first before slowly trickling down to the rest of the market as lenders are happier to lend to what they see as quality applicants with higher incomes and sizeable deposits.”

But he added: “There is still a big squeeze in terms of availability and competitive mortgage rates in the wider market despite buyer demand being strong.”

Housematix » Investing

Solid Report for Trump Project in Panama

In U.K., Talk of ‘Sporadic and Shaky’ Recovery