Connect with us

Real Estate

CEOs say Trump policies hurt business, investment

Editor

Published

on

From center stage in Davos last year, U.S. President Donald Trump told the world’s corporate bosses that America is a great place to invest. It hasn’t quite turned out that way.

Foreign direct investment to the United States fell in 2018, and companies gathered at the World Economic Forum in the Swiss Alps this year say they are worried Trump’s trade war with China will dampen the global economy and business investments even further.

One key complaint here this week: Companies increasingly reliant on consumers in China have had to lower their earnings outlooks as the world’s second-largest economy cools.

And while the U.S. administration has cut taxes and regulations to attract new investment, a wave of caution is rippling through many industries in the United States.

The trade war has been very damaging for the U.S. agricultural economy.– David MacLennan, Cargill CEO

“The trade war has been very damaging for the U.S. agricultural economy,” said David MacLennan, chief executive of U.S. food and agricultural giant Cargill Inc, which announced worse-than-expected results out of China earlier in January.

“The longer this goes on, the worse it is,” he told Reuters.

Foreign investment in the United States, which includes cross-border mergers and acquisitions as well as intra-company loans, fell about 18 per cent in 2018 from the prior year, according to the United Nations Conference on Trade and Development (UNCTAD).

That is close to the 19 per cent year-on-year drop in foreign investment globally. But it is notable given the deregulation and tax cuts that might have otherwise fed into inward investment. In January of last year, at Davos, many executives said they planned to spend money in the U.S. in 2018.

A view of the congress center, which hosts the WEF event, is illuminated by street lights on the eve of the annual meeting Sunday. (Markus Schreiber/Associated Press)

While the UN trade agency attributed the global and U.S. declines to the tariffs that the United States and China have imposed on each other’s imports since mid-2018, foreign investment in China actually rose three per cent last year over the previous year. Foreign investment to India rose seven per cent.

Alan Jope, chief executive of consumer goods company Unilever, said the United States remains a good market for its products, which include Dove deodorant, Magnum ice cream and Lipton tea.

But it is China, where Unilever last year joined forces with e-commerce giant JD.com to move its products around the country, that has become the more resilient market.

Jope said China was “one of our most reliable sources of growth. China provides the new stability in consumer consumption.”

Ripple effects

The U.S.-China trade war has hit industries around the world over the past few months.

Big Chinese companies such as Alibaba have shrunk their plans to invest in the United States. Taiwan-based Foxconn has scaled back its plans for a Wisconsin factory, and Chinese automaker GAC Motor has also delayed a move into the U.S. market.

In September, Austria’s fiber producer Lenzing halted a planned U.S. expansion, blaming rising tariffs between the United States and China.

Chinese textile exports to the U.S. are among the goods facing tariffs. Lenzing mothballed a $322 million US project in Alabama to focus on setting up a new production facility in Thailand.

To be sure, foreign companies are still investing, particularly in the auto industry.

Volkswagen said earlier this month that it would invest $800 million to build a new electric car at its plant in Chattanooga, Tennessee. Toyota and Mazda are working on a new assembly plant, and Daimler and BMW are investing in existing operations.

But the economic malaise driven by the upending of trade flows is hitting tech companies hard due to both supply-chain disruption and the economic slowdown in China.

Apple this month warned of disappointing quarterly revenues, citing slowing iPhone demand in China. Samsung Electronics Co Ltd. — the world’s biggest maker of smartphones and the manufacturer of chips for other smartphone makers, including Apple and Huawei — said its fourth-quarter profit likely dropped 29 per cent.

“For the long run … I worry that the trend will expand to many other countries and industries, and at that time … we all will be negatively affected,” Ken Hu, deputy chairman of China’s Huawei Technologies, said in Davos.

Huawei, the world’s biggest producer of telecommunications equipment, is “probably suffering the most right now” because it relies on heavily integrated and globalized supply chains, Hu said.

Trump looms large

As a result of the disruption, Trump’s trade war with Chinese President Xi Jinping is looming large over Davos this year, even if neither man is here.

The International Monetary Fund trimmed its global growth forecasts on Monday and a survey by auditing and accounting giant PwC of nearly 1,400 chief executives showed increasing pessimism among business chiefs.

The PwC research showed 27 per cent of executives from outside the United States see the United States as the number one place with the most potential for growth, down from 46 per cent in 2018.

It’s not only economics that is clouding the skies. Foreign companies, mainly Chinese, also face tighter scrutiny when they bring deals to the United States, after the Trump administration last year strengthened the powers of the Committee on Foreign Investment (CFIUS), said Stuart Eizenstat, former U.S. ambassador to the European Union and now head of law firm Covington & Burlington LLP’s international practice.

CFIUS is an intra-agency panel that reviews acquisitions on national security grounds.

Chinese state-owned Sinochem Group, which has been in merger talks with ChemChina to create the world’s biggest industrial chemicals firm, said that it did not think it could clinch a U.S. acquisition in the current environment.

“You know what’s happening today, so I think you will see there will be less investment going abroad,” Sinochem Chairman Ning Gaoning said.

“The Chinese are getting quite confused. They thought they were welcome to invest in other countries. Now they realize they are not being welcomed all the time.”

Takeshi Niinami, chief executive of Japanese brewer Suntory Holdings Ltd., told Reuters in an interview that the world has “very big emotional leaders” including one in the Washington.

“Davos is a body to work on one voice, to give [a message that says]: ‘Come on, we have to be rational,'” he said. “Business should be the one to let them cool down.”

Source link

قالب وردپرس

Real Estate

Montreal real-estate prices climbing much faster than Toronto or Vancouver: study

Editor

Published

on

By

MONTREAL — The cost of housing per square foot has skyrocketed in Montreal while other cities saw little change over the last year, according to a new national survey.

The study found that condominium prices in downtown Montreal are up 13.5 per cent from last year to, on average, $805 per square foot.

That’s not as high as other cities, but it’s catching up — and Montreal’s rate of growth is outpacing other major Canadian cities.

Toronto’s condo prices grew to $1083 per square foot, an increase of just under 10 per cent, according to the study. In Vancouver, where you can find some of Canada’s most expensive condo prices, rates are down 4 per cent to $1192 per square foot.

To make the comparisons, Canadian real estate giant Century 21 collected data from real estate boards across the country to calculate the home costs per square foot.

“It’s important to compare apple to apples,” said Todd Shyiak, the company’s vice president of operations.

Montreal’s rise was even more explosive for detached homes and townhouses.

Detached houses in Montreal’s downtown and southwest rose to $958 per square foot, 40 per cent up from last year.

“It’s wild,” said Century 21 broker Angela Langtry. She says the pandemic raised demand.

“People had a lot of time to figure out they don’t like the home they’re in,” she said. “They all want pools.”

There was a big spike in sales, she noted, following a pause in brokerage during the spring, at the peak of the pandemic.

Experts say the pandemic will push people into the suburbs as they search for affordable housing and home office space.

“A huge portion of our society’s housing needs changed overnight,” said Shyiak. People “no longer need to be 10 minutes from the office.”

He says that could mean less demand for condos in the future. “People want their own front door,” he said.

Continue Reading

Real Estate

Carttera buys prime downtown Montreal development site

Editor

Published

on

By

Carttera has acquired a prime downtown Montreal site at 1455 De La Montagne St. which will mark its third development on the thoroughfare.

“We think it’s probably one of the best, if not the best, locations in the whole city,” Carttera founding partner Jim Tadeson told RENX. “We’ve had great success on De La Montagne.”

The two earlier projects are: L’Avenue, a building with 393 residential units, 84,000 square feet of office space and 34,000 square feet of retail that was developed with Broccolini and occupied in 2017; and Arbora Residences, a two-phase development with 434 rental and condominium units in three buildings being built in partnership with Oxford Properties.

Thursday’s latest acquisition, for $48.5 million from 630745 Ontario, is a 31,750-square-foot surface parking lot with flexible mixed-use zoning on the corner of De La Montagne and De Maisonneuve Boulevard West.

The site is near the Vogue Hotel Montreal Downtown, the new Four Seasons Hotel Montreal and high-end retail.

“It’s zoned for up to 203,000 square feet of density, which we’re going to take advantage of,” said Tadeson. “Our vision for the site is a condominium project with some retail.”

Since there is no demolition required and no heritage issues to contend with, Toronto-based Carttera plans to move ahead quickly with the luxury project.

It’s in the concept design phase and Tadeson said it could take six months or more before it’s prepared to make a submission to the city.

Continue Reading

Real Estate

Montreal Has the Hottest Real Estate Market in Canada Right Now

Editor

Published

on

By

If you thought Toronto’s real estate market was on fire, it’s time for a second take, because the market in Montreal is the hottest in all of Canada right now.

A newly-released annual report from CENTURY 21 Canada reveals that, following an early-spring decline due to the COVID-19 pandemic, sales numbers are bouncing back and house prices across the country are maintaining their strength. The study compared the price per square foot of properties sold between January 1 and June 30 of this year, compared to the same period last year.

In Toronto and Vancouver, unsurprisingly, prices remain high. But while regions across the country are seeing varied stories when it comes to their housing market fluctuations, Montreal stands out — there, prices have increased dramatically since 2019. While the numbers remain lower than Toronto and Vancouver, that housing market is proving to be the country’s strongest right now.

In Quebec’s largest city, prices have increased significantly since last year, particularly in the downtown detached house and townhouse markets. For example, the price of a detached house in Montreal’s downtown and southwest rose 42.14% to $958 per square foot, while townhouses went up 44% to $768, and condos, 13.55% to $805. Comparatively, in Toronto and Vancouver, prices saw more modest increases or, in some cases, even declines.

“Even though real estate in Quebec was not considered an essential service, we have seen strong demand and a jump in prices in 2020,” said Mohamad Al-Hajj, owner of CENTURY 21 Immo-Plus in Montreal.

Continue Reading

Chat

Trending