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Jun 24, 2018

All grown up and nowhere to work: Berlin runs short of office space

All grown up and nowhere to work: Berlin runs short of office space

Outside view of former Kaufhof department store near Ostbahnhof in Berlin, Germany, June 12, 2018. REUTERS/Joachim Herrmann

By Caroline Copley

BERLIN (Reuters) – Nearly 30 years after the fall of the Wall, “cool” Berlin is booming, with some 40,000 people moving to the German capital every year to work not just at its vibrant tech start-ups but also increasingly at big multinational firms.

As the city once seen as a low-cost government backwater comes into its own as a European business center, office supply has not been able to keep up with the sharp rise in demand.

“Berlin has come out of its pre-pubescent phase and is now becoming more grown up in a way that other big cities maybe already have done,” said Stefan Franzke, CEO of Berlin Partner, which promotes investment in the city and helps companies open offices.

Building activity is up 90 percent compared to a year ago with around 557,000 sq meters currently under construction, according to BNP Paribas (PA:BNPP) Real Estate. This won’t bring much relief in the short-term, however, as only around one quarter of that will be completed over the next 12 months and the majority has already been pre-let.

Average office rents in Berlin are now the highest in Germany – although premium office space in Frankfurt is still the most expensive – and vacancy rates are under 2 percent, down from nearly 7.8 percent in 2010.

The shortage is challenging both businesses and landlords to be open-minded about how to define office space and how to keep down costs.

Operators of coworking real estate are playing a big role pushing up rents, gobbling up around 71,000 sq meters of new office space last year, about 8 percent of the total take-up.

WeWork now has five offices in Berlin and plans to open another location early next year and a further site in summer 2019.

But coworking space is not just for start-ups anymore.

Deutsche Bahn has rented space at one WeWork office and will take over eight floors of another WeWork building in the autumn.

The arrangement helps the train operator meet growing demand for desks in the short-term as it hires employees to work on digital projects and facilitates networking with start-ups, a spokeswoman said.

Amazon (O:AMZN) has several office buildings in Berlin’s central Mitte district, but also rents temporary and coworking spaces to accommodate the rapid growth of its Berlin-based staff, now numbering more than 2,300.

“It’s hyper-competitive,” said Eva Glanzer, vice president of People, at online travel booking firm GetYourGuide, which has just secured space for a new headquarters after a two-year search left its 350 employees running between meetings at several different locations across the city.

While some start-ups have moved out of Berlin’s central districts, CEO Michael von Roeder of Sensorberg, which kits out buildings with digital technology, says he will struggle to keep talent if he ups sticks to the suburbs.

“In the past, if you spent enough money it was fairly easy to find space,” von Roeder said. “In the meantime, even if you don’t care what you pay it’s still difficult.”

Sensorberg has temporarily crammed its 30 employees into an office with another firm while it waits for a new co-working facility. It has also found an innovative solution to the rising costs by securing discounted space in the new space by agreeing to provide its own technology.

“The competition is heightened by the fact that landlords aren’t used to working with the new generation of high-growth startups like us. They’re old-fashioned, they prefer stability, and they want to see the numbers,” said Glanzer.


Prime office rents spiked by 16 percent in the year to the end of March to 33 euros per square meter compared to 22 euros in 2013, says BNP Paribas – far above what most start-ups can afford to pay.

This means Berlin, a city of 3.7 million people, is narrowing the gap on Germany’s bigger business centers, Frankfurt and Munich, which can command 42 and 37 euros per sq meter per month, respectively, for top locations.

Frankfurt has a population of 740,000 people while Munich is home to 1.5 million.

The rising rents are incentivising some owners of other types of property to refit their buildings and wheel in desks.

Around 25,000 square meters of hotel space in Berlin’s Mitte and Charlottenberg districts are being converted into offices, according to Jan-Niklas Schroers at real estate firm Savills.

It’s a tiny fraction of total hotel space, demand for which continues to grow with around 6,500 rooms in the pipeline, according to PwC.

However, for landlords who may have rented out their buildings to hotels 10 years ago, they can expect an increase in rental income of between 30 and 50 percent if they turn it into office space, especially in good locations, said Schroers.

Austrian real-estate group Signa is converting one of the former East Germany’s flagship department stores into a futuristic office and retail complex.

Daimler (DE:DAIGn) has signed a rental contract to take over an imposing Jugendstil building that was built as a department store at the turn of the 20th century.

In Mitte, residents of two nursing homes operated by family firm Berthold Hecht, will have to move out by the end of next May to make way for offices.

Developers used to have to prove they had rental contracts for buildings before they could even get financing. Now banks are handing out credit without firms having to do any marketing, said Berlin Partner’s Franzke.

Completed construction is expected to tick up in 2019 and 2020 and plenty of space remains to be developed in the wasteland where the Wall once stood.

But Berlin needs to plan ahead for what kind of city it wants to become, cautioned Savills’ Schroers.

“Capital follows talent and at the moment the talent is here because Berlin is cheap and cool,” he said. “If it loses some of that mojo and becomes less affordable the talent might go somewhere else.”

Against the grain: Australian banks face rural lending reckoning

Against the grain: Australian banks face rural lending reckoning

FILE PHOTO: A stockman rides his horse as he leads another down a road towards the cattle yards in the outback town of Windorah, Queensland, Australia, August 11, 2017. REUTERS/David Gray/File Photo

By Byron Kaye

SYDNEY (Reuters) – Australian potato farmer Tom Fox says he had never missed a bank payment in two decades before a delay sending a shipment to Indonesia during a trade dispute between the countries prompted his lender to force him into receivership in 2013.

“I got a letter from the bank lawyers saying I had 12 hours to come up with A$2.4 million ($1.8 million), and that was an impossibility to do on that notice,” Fox told Reuters.

A third-generation farmer who built up the country’s biggest seed potato producer, Fox said his farm and equipment were sold below value by receivers for the country’s biggest rural lender, National Australia Bank Ltd (AX:NAB).

Fox’s story encapsulates the issues driving a wedge between Australia’s $50 billion farm sector and its banks as a powerful public inquiry into financial sector misconduct begins its examination of agriculture lending practices this week.

Shareholder appetite for continuous profit growth and the widespread closure of rural bank branches have left some farmers with a sense that their livelihoods are controlled by city executives with little care of issues beyond their control such as drought, wildfires and trade disputes.

For Fox, for instance, Indonesia’s surprise ban on Australian fresh produce imports – widely seen as retaliation for an Australian ban on live sheep exports – didn’t affect his type of potatoes. But the bank didn’t see the difference when he reported the shipping delay, he says, and called in a receiver.

NAB’s general manager of agribusiness Khan Horne said Fox’s business was under “extreme financial pressure” by 2013, with “significant creditors dating back to the prior year’s trading, payroll issues and pressure from other suppliers”.

In an email, Horne said the bank hired receivers for the potato farm “based on financial default”, and the receivers “sought to work co-operatively with Mr Fox to realize value from the business and other assets”.

Stewart Levitt, a lawyer who has represented about 20 farmers in mediation with banks, said banks had to acknowledge that farming was full of ups and downs.

“The whole way you bank farmers has to be different to the way you bank other sectors of the economy.”


Farm banking in dry, hot Australia has often been difficult, but the relationship has become especially strained in the past decade since a wave of M&A deals left the country’s biggest banks holding loans they might not normally approve at a time of almost continuous drought and volatile commodity prices.

By dollar value, agribusiness is a relatively minor component of Australian banks’ loan books – for NAB, the biggest rural lender, farm loans are about a tenth the size of its mortgage book – but also one of the riskiest and politically sensitive.

A 2017 Senate report on farm finance, which Fox made a sworn submission to, offered a taste of what the more powerful Royal Commission may recommend.

Among the measures recommended by the Senate were a compulsory minimum period before banks can call on distressed farm loans, a ban on banks changing rural loan terms without consultation, and a compulsory national farm debt mediation scheme.

Anne Scott, a principal adviser at the Australian Small Business and Family Enterprise Ombudsman said many farmers still operated like they did when they had very close relationships with their banks.

“But what’s happened is banks have looked at their risk reduction, they see an economic downturn, they’re not interested it might not be very long, they just want to get out of that as quickly as possible.”

The Australian Bankers Association, a lobby group, says it supports a national rural debt mediation scheme.

But it suggests the narrative of banks forcing farmers out of their properties has been overplayed, with only a relatively small number of foreclosures in the primary services sector in 2017.

“Clearly more reform is necessary but it’s critical that the pendulum doesn’t swing so far that it reduces lending and makes home ownership, or running a business such as a farm more difficult,” an ABA spokesman said in an email.

Commonwealth Bank of Australia (AX:CBA), which inherited a large farm loan book when it bought rural lender BankWest from HBOS Plc in 2008, declined comment. Westpac Banking Corp (AX:WBC), Australia’s second-largest bank, also declined comment.

Australia and New Zealand Banking Group Ltd (AX:ANZ), which acquired thousands of rural loans when it bought the Australian Wheat Board’s financial services arm in 2009, did not respond to a request for comment.


Banks don’t break out profits from farm lending but the Royal Commission, now at the halfway point, has already wiped more than $20 billion from the sector’s share prices due to reputational damage and expectations the hearings will bring on tighter lending rules.

Natasha Keys, a consultant to farmers involved in bank disputes who plans to protest outside the hearings, said agribusiness lending should come with extra regulations partly because of the knock-on effect in rural centers when lenders “turn the tap off” and call in debts.

“Rather than the banks holding the debt, you’ve got all these suppliers and all these other businesses around in these towns accumulating debt,” she said.

“It causes a big structural problem. It doesn’t happen in other retail communities.”

Iran sees little extra oil if OPEC, partners stick to deal

Iran sees little extra oil if OPEC, partners stick to deal

FILE PHOTO: A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf, Iran, July 25, 2005. REUTERS/Raheb Homavandi/File Photo/File Photo

By Alex Lawler

VIENNA (Reuters) – Iran said on Saturday the world will see little extra oil reaching the market if OPEC and its partners adhere properly to a supply pact, underlining a disagreement with top exporter Saudi Arabia.

OPEC and a group of non-OPEC countries agreed on Saturday that they would return to 100 percent compliance with previously agreed oil output cuts, after months of underproduction by OPEC countries including Venezuela and Angola.

Saudi Energy Minister Khalid al-Falih said this implied an indirect reallocation of extra production from countries unable to produce more oil to those, such as his own and the other Gulf OPEC members, that are able to do so.

But Iran’s OPEC governor, Hossein Kazempour Ardebili, told Reuters that no reallocation was agreed at Saturday’s joint OPEC and non-OPEC meeting or the OPEC-only talks a day earlier.

“There is no such thing,” Kazempour said. “Some people may do, but they are in breach of the agreement.”

The comments underline that disagreement between Iran and Saudi Arabia, longtime rivals in the Organization of the Petroleum Exporting Countries, persists despite extensive talks in Vienna this week aimed at resolving differences.

Venezuela has been pumping more than 500,000 barrels per day below its OPEC target because of natural declines in its oil output, but in Iran’s view other countries should not step in to cover the shortfall.

“They cannot go and say Venezuela has 500,000 bpd on the table and there is no cat to eat this meat, I’m the cat and I will jump on it,” Kazempour said.

If countries stick to their allocations, output would rise by 300,000 bpd in the first three months and up to 500,000 bpd by the end of the year, he said – less than the 1 million bpd mentioned by Falih and some other ministers.

“This will come up naturally, some is additional barrels, some is restraint barrels, because nobody can turn up tomorrow,” Kazempour said.

Iran had demanded OPEC reject calls from U.S. President Donald Trump for an increase in oil supply, arguing that he had contributed to a recent rise in prices by imposing sanctions on Iran and Venezuela.

According to Kazempour, Venezuela had said its output would partially recover in the next three to four months, another reason why other producers should not step in to compensate.

“Venezuela told us that 300,000 bpd will come back,” he said.

Jun 23, 2018

European authorities will react to any U.S. auto tariff move: Le Monde

European authorities will react to any U.S. auto tariff move: Le Monde

FILE PHOTO: European Commission Vice-President Jyrki Katainen attends a news conference on the launch of VentureEU, a Pan-European Venture Capital Funds-of-Funds programme in Brussels, Belgium, April 10, 2018. REUTERS/Eric Vidal/File Photo

PARIS (Reuters) – European Union authorities will respond to any U.S. move to raise tariffs on cars made in the bloc, EU Commission Vice President Jyrki Katainen told French newspaper Le Monde.

U.S. President Donald Trump on Friday threatened to escalate a trade war with Europe by imposing a 20 percent tariff on all imports of EU-assembled cars.

“If they decide to raise their import tariffs, we’ll have no choice, again, but to react,” Katainen told Le Monde, in a report published on Saturday. “We don’t want to fight (over trade) in public via Twitter. We should end the escalation.”

China May gasoline exports up 134 percent at 1.47 million tonnes: customs

China May gasoline exports up 134 percent at 1.47 million tonnes: customs

FILE PHOTO: A worker walks down stairs of an oil tank at a refinery in Wuhan, Hubei province, China March 23, 2012. REUTERS/Stringer/File Photo

BEIJING (Reuters) – China’s gasoline exports in May surged from a year earlier, as state refiners sought to profit from good export margins and additional quota, customs data showed on Saturday.

Gasoline exports in May rose 134 percent from a year earlier to 1.47 million tonnes, and up from 1.21 million tonnes in April.

Diesel exports in May also rose, up 62.6 percent to 2 million tonnes from the year earlier period while kerosene exports were up 43.1 percent to 1.42 million tonnes.

The month’s fuel exports were still lower than the record numbers recorded in March however.

Meanwhile liquefied natural gas imports rose 42.8 percent to 4.15 million tonnes in May, driven by strong consumption from chemical plants and reduced domestic production.

China’s refinery runs eased from a record high in April as state-run refiners began regular maintenance and some independents cut output ahead of a regional summit.

China’s largest natural gas producer, PetroChina, started rationing supplies to industrial consumers in northern and western regions last month to prevent gas shortages, not long after the country’s major winter supply crunch.

China consumer prices seen stable in second half: state planner

China consumer prices seen stable in second half: state planner

Shoppers ride on a travelator at a supermarket in Beijing, China, October 15, 2015. REUTERS/Kim Kyung-Hoon

BEIJING (Reuters) – China’s consumer prices are likely to be stable in the second half of the year, the state planner said on Saturday, soothing concerns that have grown amid China’s escalating trade dispute with the United States.

“The market in general thinks the macro environment is stable and market supply is sufficient,” an official at the pricing department of the National Development and Reform Commission said.

“The overall price level will continue to stabilize and it’s unlikely that prices will rise significantly,” he added, in comments published on the agency’s website.

Annual consumer inflation in the world’s No.2 economy held steady in May from the previous month, as food prices remained largely stable, official data showed earlier this month.

But the remarks come amid escalating trade tensions with the United States, fuelling worries over upward pressure on China’s consumer price index.

Agriculture products in particular could jump after Beijing imposes tariffs from July 6 on imports of U.S. soybeans and other products used to feed its huge livestock sector.

That would lead to further upward pressure on pork prices, which have a large weighting in the consumer inflation basket.

The statement noted however that pig production capacity is at a high level while grain and edible oil stocks were also relatively high.

In another move aimed at ensuring economic stability, China said last week that it would use targeted cuts in banks’ reserve requirement ratios (RRR) and other policy tools to boost credit support for small firms and ensure steady growth.

Tesla recycling machine catches fire at Fremont, California campus

Tesla recycling machine catches fire at Fremont, California campus

FILE PHOTO: The Tesla logo is seen at the entrance to Tesla Motors' new showroom in Manhattan's Meatpacking District in New York City, U.S., December 14, 2017. REUTERS/Brendan McDermid/File Photo

By Salvador Rodriguez

A machine used for paper recycling caught fire Thursday night at Tesla Inc’s (O:TSLA) Fremont, California, campus, outside the company’s car production factory, but manufacturing was not affected, the company said.

The fire occurred after a cardboard baling machines that is used for recycling overheated, and was contained, Fremont Fire Department Division Chief Diane Hendry said on Friday.

The fire happened in a tent used for recycling purposes on the south side of the company’s campus, a company spokeswoman said on Friday.

“Last night, the structure outside our factory that houses the cardboard and other wood and paper products that are being recycled caught fire,” the spokeswoman said, adding that no injuries were reported, and the company was investigating the cause.

In a tweet earlier this week, Tesla Chief Executive Officer Elon Musk touted a new tent on the campus that is being used for the production of the Model 3.

The Tesla spokeswoman said the production tent was not affected by the fire.

The Thursday fire is the latest in a series of blazes at the Fremont plant. The company suffered a fire earlier this month, according to an email sent to workers by Musk.

Tesla has been burning through cash as it tries to hit a target of producing 5,000 Model 3 electric sedans per week after production delays. Tesla’s future long-term profitability hinges on ramping up Model 3 output, which is intended for mass production.

Walmart-Advent deal gets Brazil antitrust nod

FILE PHOTO: The main entrance to a Walmart store is pictured in Sao Paulo, Brazil February 14, 2018. REUTERS/Paulo Whitaker/File Photo

SAO PAULO (Reuters) – Brazil’s antitrust watchdog Cade on Friday approved buyout firm Advent International’s acquisition of Walmart Inc’s (N:WMT) Brazilian operations, and sought no additional asset sales.

Earlier this month, Walmart agreed to sell an 80 percent stake of its Brazilin unit to Advent, partially exiting an underperforming business and recording a noncash charge of roughly $4.5 billion.

Advent plans to convert unprofitable hypermarkets into cash-and-carry wholesale stores and expand brands developed by Walmart in Brazil such as Maxxi and Todo Dia.

Jun 22, 2018

China’s Hainan says will partly lift ‘Great Firewall’ to lure foreign tourists

People sit on steps against a backdrop of residential buildings under construction, in Haikou, Hainan province, China April 22, 2018. Picture taken April 22, 2018. REUTERS/Stringer

By Yawen Chen and Brenda Goh

BEIJING/SHANGHAI (Reuters) – China’s southern province of Hainan will offer foreigners unrestricted internet access to Facebook (NASDAQ:FB), Twitter and YouTube as part of new incentives to boost tourism.

The island province known as China’s Hawaii because of its balmy climate and resort-lined coastline, will create a special “gathering zone” for foreign tourists where they can access such sites. Hainan’s provincial government detailed the plan on its website on Thursday.

The move would mark a rare departure from China’s long-held stance on the internet, where many foreign websites are banned in the name of maintaining social stability, a restriction dubbed by netizens as the “Great Firewall”.

The plan though quickly faced some criticism on Chinese social media.

“Are we establishing the ‘one country, two system’ policy in Mainland China now?” said Wu Ran, a user on China’s microblogging site Weibo.

Another Weibo user, who uses the handle “late night cat” said: “This is an entirely blatant, contemptible, imprudent, low behavior of reverse racism. This is garbage!”


China said in April it aimed to make Hainan an international free trade zone by 2020, an announcement that precipitated a short-lived property boom on the island.

Under the plan revealed on Thursday, Hainan said it aims to increase visitor numbers by 25 percent annually to at least 2 million by 2020 and will promote tourism through advertising on foreign broadcasters such as BBC and CNN.

It said it would boost subsidies to increase the number of international direct flight routes to and from Hainan to 100 by 2020 and would abolish restrictions on foreign investment in air, rail and waterway transport.

The island will also ensure credit and debit cards issued by foreign card companies Visa and MasterCard are accepted at major tourist sites, hotels and shops by 2019, it said.

The latest Hainan government plan did not mention gambling or casinos. Media reports had said that China was considering allowing sports betting or a lottery on Hainan in a move that could open the door to physical casinos.

Technical Analysis for EURUSD on June 22, 2018

Yesterday June 21, 2018.The EUR rose 0.27% against USD and closed at 0.1602.

Today June 22, 2018 at 9:15 GMT, the EUR/USD trading at 1.1655. For today the expected trading range is between 1.1529, Support and 1.1705 Resistance.

Expected trend for today is Bullish

Support 1Support 2Support 3Resistance 1Resistance 2Resistance 3

Technical Analysis for GBPUSD on June 22, 2018

Yesterday June 21, 2018.The GBP rose 0.50% against USD and closed at 1.3235.

Today June 22, 2018 at 9:15 GMT, the GBP/USD trading at 1.3285. For today the expected trading range is between 1.3134, Support and 1.3369 Resistance.

Expected trend for today is Bullish.

Support 1Support 2Support 3Resistance 1Resistance 2Resistance 3

Technical Analysis for USDJPY on June 22, 2018

Yesterday June 21, 2018.The USD declined 0.34% against JPY and closed at 109.96.

Today June 22, 2018 at 9:15 GMT, the USD/JPY trading at 110.15. For today the expected trading range is between 109.61 Support and 110.53 Resistance.

Expected trend for today is Bullish.

Support 1Support 2Support 3Resistance 1Resistance 2Resistance 3

Technical Analysis for USDCHF on June 22, 2018

Yesterday June 21, 2018.The USD declined 0.44% against CHF and closed at 0.9916.

Today June 22, 2018 at 9:15 GMT, the USD/CHF trading at 0.9898. For today the expected trading range is between 0.9843, Support and 0.9968 Resistance.

Expected trend for today is Bearish.

Support 1Support 2Support 3Resistance 1Resistance 2Resistance 3

Technical Analysis for USDCAD on June 22, 2018

Yesterday June 21, 2018.The USD rose 0.03% against CAD and closed at 1.3313.

Today June 22, 2018 at 9.15 GMT, the USD/CAD trading at 1.3290. For today the expected trading range is between 1.3232 Support and 0.3337 Resistance.

Expected trend for today is Bearish.

Support 1Support 2Support 3Resistance 1Resistance 2Resistance 3

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