Shanghai Barbie House

As the financial crisis continues to take it’s toll, there appears to be certain markets that are completely insulated, but only at the very top-end of the luxury real estate markets - such as Barbie Doll Houses.

Mattel has just spent $30 million opening a “House of Barbie,” in Shanghai. The House of Barbie is the first Barbie flagship store and two new dolls, “Shanghai Barbie,” and her closest friend, “Cute Asian-looking Barbie friend no.233,” were created for the launch. 

The enormous 3,400 square meter store is at 550 Huai Hai Lu, one of Shanghai’s premier shopping areas. “We believe in Girls’ dreams,” is their current tagline, although I have a feeling that might have to go after more careful consideration. One has to assume that this store has been in the works for some time, and presumably pre-credit crunch.

We believe in Girls' Dreams

Photo credit 1
Photo Credit 2

When I first became aware of this store, I did wonder at the sense of 3,400 msq2 devoted entirely to Barbie dolls, but it turns out to be slightly more sophisticated than that. Whilst promoting the idea that what every girls’ dreams should be all about is - shopping, the store offers other facilities also, such as a the ability to be a fashion designer for the day and “create your own Barbie styles;” as well as a runway show from world-renowned designers; a full service spa and an opportunity to have your photo taken with Barbie. Not forgetting the shopping. Whether this idea will weather the current financial climate remains to be seen, but for any of you who might be interested in these things, here are a few photos of Shanghai Barbie and her friend. In fact Shanghai Barbie has an entire website about her. Sweet dreams…….

Shanghai Barbie

Shanghai Barbie's friend

The credit crunch is affecting all but the very highest echelons of real estate, and a number of changes have been made in the world wide luxury real estate scene. Clearly the real estate market is going through some significant changes, not least of which is the reduction in numbers of agents. These are some recent headlines, changes, successes and, unfortunately, failures.

Halifax close 53 branches in UK

HBOS bank closed 53 Halifax real estate agencies in the UK in August, shedding at least 100 employees. One entertaining note within this news was the fact that HBOS “was working with its members to help them make the transition from an estate agency to a bank branch,” as though the two skill sets were completely interchangeable. According to the spokesman, 450 extra mortgage advisors are now needed in their bank branches…..

Real estate agents in Scotland have already begun the process of shedding staff, with between 10 and 20% already gone, and almost everyone agreeing it will get worse before it gets better.

“Professionals,” a New Zealand based real estate agency chain, is to close seven agencies, losing at  least 50 staff on Auckland’s north shore, reports the National Business Review.

The Real Estate Bloggers report that HouseValues, the lead generation company has renamed and re-branded itself to Market Leader and is expanding it’s operations to sell to different segments of the real estate industry. They sensibly wonder at the reasons for this change, given the timing.

I don’t know about you but why would one go through the expense and trouble of completely rebranding a company if everything was doing great. While I am not a fan of lead generation purchases, they are a proven method if scattered way of growing a real estate business. But to spend the money in a down market to re-brand and even change one’s stock symbol is pretty extreme if all is well. HouseValues renames itself.

Another company feeling the need to re-brand themselves is Properazzi, who recently changed their name to “enormo.” Enormo now claim to be the world’s largest property portal, with listings in over 50 countries. Enormo.

The Motley Fool takes a look at 4 Dot-Com real estate firms, after Realtor.com and ZipRealty posted decidedly lack-lustre quarterly results.

It is fair to say that the luxury end of the market is faring slightly better, but even here, the financial turmoil around the world is having an impact. Foreign buyers have been keeping the Manhattan market above water for most of the year, but with the sudden change in dollar value has deterred many. “The number of international buyers has fallen by 50% in the last six months,” reports the International Herald Tribune.

Bright notes

It is not all doom and gloom though. One thing for sure is that the market and industry needed a shake up, and the strong agencies will still be around when the market begins to recover. On a more positive note, Leslee Farrell believes that high inventory and low interest rates makes it a good time to be a buyer. New times call for new tools, and a number of marketing tools for the new face of luxury real estate marketing are about to launch.

The Institute of Luxury Home Marketing recently announced their new “Luxury Market Report,” which offers real-time data on the luxury home market in 31 US metro areas. Knowledge is power, and a full understanding of the state of the luxury market in a particular area will be key information for any luxury real estate agent wishing to weather the current storm.

After interminable delays and legal battles with software developers that I am not allowed to discuss, Luxury Property is almost ready to launch. Featuring what has to be the sexiest video search facility on the planet, a sneak peek at the beta site is available here - Luxury Property Still a work-in-progress, but expect the launch in the next week. AT LAST !

Turnberry Towers in Houston

Turnberry Tower, a 34 storey luxury condominium development in Houston has been canceled.

Turnberry’s $3 million sales office was closed on Monday. The Tower had originally been planned to offer limousine services, maid suites and two, 15,000 sqft homes. Relatively speaking, one would have expected an oil-based economy such as Houston’s to be withstanding the current financial storm a little better than much of the rest of the US, but even here the credit crunch is taking it’s toll. Turnberry is a well established developer with substantial successes and completed high-end condominium projects all over the US, and has pledged to return all deposits already taken with appropriate interest accrued.

Turnberry Associates said the 184-unit development planned near the Williams Tower has been “discontinued” as turmoil in the financial markets has caused traditional construction lending sources to dry up. The Houston Chronicle

Investment banks asked to justify bonuses

It would appear I am not the only one to be wondering if the bonuses planned by many Wall street investment banks this year is an appropriate use of the recent government capital injections - or if it is enough to kick-start the sluggish NYC luxury property market. Representative Henry Waxman, chairman of the House Committee in Oversight and Government Reform wrote letters yesterday to nine firms after announcements that there is an intention to pay out $108 billion in employee compensation, much of it in the form of bonuses - almost the same amount as paid out in 2008.

I question the appropriateness of depleting the capital that taxpayers just injected into the banks through the payment of billions of dollars in bonuses, especially after one of the financial industry’s worst years on record. Henry Waxman The Boston Globe

I for one will be interested as to whether Mr. Waxman’s bite is as strong as his bark.

Luxury Property prices in London down 12%

Docklands Penthouse London

According to Liam Bailey, head of residential research for Knight Frank, luxury property prices in London are down 12% from last year’s levels, and The New York Times is selling a nice 2 bedroom condo in London’s docklands for $1.4 million.

This two-bedroom two-and-a-half-bath penthouse apartment overlooks the River Thames on the Isle of Dogs, part of London’s Docklands area. The living area has a double-height ceiling and oversized windows with views of the river. Above the living room, on the mezzanine level, is a cinema room. A private roof terrace has a container garden and a gazebo; it also looks out over the river. Both bedrooms have en suite bathrooms, and there is a half bath off the foyer. The apartment runs the entire length of the sixth floor. New York Times

Luxury Real Estate Auction in Colorado

We recently reported on an up-coming sealed bid auction of a number of luxury properties in Colorado. I spoke with Scott Franklund, the organizer of the auction yesterday, who reported that the auction had been “successful,” whilst being rather cagey about actual prices. This was the company’s first sealed bid auction and Mr. Franklund confirmed that they will certainly be running more in the future. We both agreed that realistic pricing will lead to succesfull sales of luxury property, almost regardless of the current market conditions. Not all properties up for the auction sold, although there was an approximately 50% close rate. Somerset Manor, reduced in price from $7.3 million to $ 5.3 million, was one of those that failed to sell.

Luxury Real Estate Auction in Colorado

This has to be my favorite foreclosure story recently. Not satisfied with the usual, “credit crunch,” excuse,  a British businessman is claiming he handed his £3.6 million ($6.6 million) mansion back to the bank because it is “haunted.” I am assuming the bank has some sort of arrangement with the dark side for dealing with these things, and no doubt the bank’s exorcism department will be pleased to get a little action after years of hiding in the basement.

Clifton Hall Haunted Mansion

Mr. Anwar Rashid moved into Clifton Hall, a 52 roomed mansion in Nottinghamshire, just 8 months ago, but is now claiming the reason the bank has taken possession is because he and his family have been terrorized by the house since moving in. Blood stains mysteriously appearing on the children’s clothes, unexplained noises and ghostly sightings became a normal part of the family’s brief stay.

Anwar Rashid

Comparing their experiences to the Nicole Kidman film, “The Others,” Mr. Rashid said,

Clifton Hall is a beautiful property. I fell for its beauty but behind the facade it is haunted. We were like the family in The Others. The ghosts didn’t want us to be there. There was a knock on the wall and we heard this, “Hello, is anyone there?” Two minutes later we heard the man’s voice again. I got up to have a look but the doors were locked and the windows were closed.

On one occasion my wife went downstairs to make milk for the baby at 5am and she saw our eldest daughter watching TV. My wife realized something was up, so she went back upstairs to check on her and found her fast asleep in bed. When we found red blood spots on the baby’s quilt, that was the day my wife said she’d had enough. We didn’t even stay that night.

The Others

Mr. Rashid, apparently made his fortune in nursing homes and a hotel in Dubai, and had plans to turn Clifton Hall into an up-market wedding venue. By an eerie co-incidence, a license for this venture was recently denied by local authorities - just like happened in the film Although, he denies allegations that his failure to pay the mortgage was a result of the failed business plan.

Clifton Hall No Weddings here

The Hall itself dates back to the Norman Conquest, has 17 bedrooms, 10 reception rooms, 10 bathrooms, a gymnasium and a movie theater. Charles the First allegedly stayed briefly in 1632. According to local folklore, a woman dressed in white jumped from a window to her death, while tunnels in the grounds were said to have been used by Satanists. So, if you are on the lookout for a haunted bargain expect this one to be hitting the auction block sometime soon.

The credit crunch seems to be spreading further afield, with news that a luxury real estate development in Auckland, New Zealand, has just collapsed financially, leaving many angry buyers and creditors.

Whisper Cove

The “Whisper Cove,” development was to be a  16 hectare, 160-luxury-residence, waterfront development at Snells Beach, but has been abandoned  after money issues, leaving a string of subcontractors, builders and others owed more than $2 million; $36 million to Westpac and $17 million to other financiers.

This is the second big housing development in Auckland to go under recently and follows the collapse of Kensington Park, a $450 million, 750-home development. Plans for more than 600 houses at both Orewa and Snells Beach are now being dropped as receivers attempt to complete dozens of part built homes and apartments. Bank of New Zealand loaned $41 million for Kensington Park and Westpac has a first mortgage over Whisper Cove.

Australian investor Babcock & Brown helped Westpac fund Whisper Cove along with Dominion Finance. Whisper Cove’s first phase of homes were marketed from $850,000 to $2.6 million. Grant Graham of KordaMentha, the receivers, says the company is getting good advice about options available for the development and a decision is likely in about a month. Unsecured creditors are owed over $2 million, but Brendon Gibson, joint receiver, said it was “unlikely they would get a cent.”

The Kensington Park and Whisper Cove collapses will almost certainly have a strong impact on the construction industry and drag down many smaller businesses along with them - the owners of Kensigton Park have already been forced to stop work on another huge development on Lake Taupo. Full story on possible impact at the New Zealand Herald.

News and reports from the International luxury property markets

Cap Cana Dominican Republic

TCPalm reports that the developer of a large community on Michael Creek Drive plans to go ahead and build a luxury waterfront subdivision in spite of the current slump in the Treasure coast housing market. Denial or foresight? Time will tell.

Cary Glickstein, owner and president of Delray Beach-based Ironwood Properties Inc., said his company plans to finish constructing two model homes during the first quarter of 2009 at the Michael Creek development. He then plans to aggressively market the properties to Baby Boomers in South Florida and northern states. Full story

Gowealthy are reporting that Taheima Wellness Resort and Spa in Mexico is being marketed in Dubai, hoping to attract investors from that region.

PURE International, global luxury property agent, is launching Taheima Wellness Resort & Spa, a condominium hotel development in Puerto Vallarta, to the Middle Eastern market. PURE International will host a series of exclusive sales events to launch Taheima Wellness Resort & Spa between September 23 and 27, 2008 in Dubai. Full story

Quest are reporting that High end properties in Bulgaria are beginning to sell again. Far be it for me to suggest a vested interest here, but “Affordable luxury,” seems an oxymoron. Either way, thery are pushing hard to try and attract buyers from the UK again. Perhaps next year?

Bulgaria as a property investment market has had a bad deal of late in the UK. Media fuelled with stories of over-development and alleged under performance have taken the spotlight off this maturing property hot spot, leading some to believe that the boom is over and other markets are where the money is. Full story

The Toronto Star reports on a new luxury development being built in the Dominican Republic at Cap Cana. I don’t quite see a Davy Crockettt’s steak house of fitting with my idea of luxury, and I am not sure the writer, Jim Byers is 100% convinced either.

It’s a cold winter’s day outside, but Perez has come to chat about his baby; Cap Cana in the Dominican Republic. Many of the writers have heard the pitch. The beach as pure white as a new moon. The lobby bar with the most divine pomegranate martinis. The place where Brangelina stayed last month (but please don’t tell anyone) Full story

International Property Investment suggest that the recent falls in the Australian stock market will fuel growth in the property sector as investors switch focus.

Housing Industry Associate WA State director John Dastlik thinks the share market blood bath may start a revival in the property market: “People are starting to come out fo the trenches and consider options to invest in property, in particular rental accommodation.” Full story

The Al Watan Daily is suggesting much the same thing will be happening in Kuwait following an enormous drop in the value of Kuwait’s stock exchange. If anyone has any money left that is.

The great drop in the Kuwait Stock Exchange’’s (KSE) performance has prompted expectations that invested money may be diverted to such sectors as real estate, according to Chairman of AlـMutakhasis Real Estate Co. Faraj AlـKhudhari. Full (short) story

Less encouraging news from Bloomberg, and the suggestion that London and New York will be in competition to see which financial center will be first to hit rock bottom, dragging property prices down with it. So far, New York is leading the race, with a drop in financial firm’s worth of 37 % ($477 billion) compared to London’s 25% ($182 billion).

London and New York will be hit comparatively harder than other financial centers,” said Mark Yeandle, a risk consultant at London-based Z/Yen Group and lead author of the Global Financial Centres Index, which ranks the competitiveness of such cities. “New York, up until a month ago, seemed to be recovering more quickly than London, but we have to wait and see what sort of fallout the more recent turmoil will generate.” Full story

Elton John must be feeling the pinch of the credit crunch along with the rest of the UK after accepting an offer from Pearl Dubai to play a private concert for a group of more than 150 investors flown to Paris for the unveiling of another new development in Dubai - the Baccarat Hotel and Residences.

Abdul Majeed Al Fahim, Chairman of Pearl Dubai FZ LLC, said: “Our initiative of the trip was to acquaint our investors with the signature Baccarat brand, including a visit to the magnificent Maison Baccarat, bringing them one step closer to being part of their upcoming Dubai Pearl experience. ”
To be developed in association with the US-based Starwood Capital Group, the Baccarat Hotel and Residences at Dubai Pearl will be located in the signature 73 storey, four tower heart of the project, will be more than 800,000 sqft with 340 rooms. The $270 million Baccarat Residences will feature elegantly designed apartments and clients will have the option to design their own interiors if they so desire.

Al Fahim added: “Since 1764, Baccarat has built a reputation of providing elegant luxury products offering unparalleled beauty and flawless brilliance. The Baccarat Hotel and Residences will therefore front a new destination not only in Dubai, but in the Middle East as well.”

A downloadable PDF file of the Baccarat Hotel and Residences is available here.