Now what has World Cup football got to do with real estate? Well, if one goes by a study by real estate consultancy Jones Lang LaSalle, one should not discount the power of winning the World Cup on real estate industry.

After World Cup wins in 1966, 1974 and 1998, the property markets in England, Germany and France seemingly benefited from the World Cup bounce.

One should also take note that the three winners were also the host countries.Runners-up should not lose heart. Though historical time series analysis, from 1980 to ‘05, shows no immediate relationship between success on the football field and real estate performance, the report notes that 75% of the runners-up in the sample survey experienced a notable upswing in rental growth and returns in the two years following the World Cup. However, this boom subsequently tapered off with time.

It is anticipated that that the World Cup will give the German economy a boost in ‘06, with the World Cup-induced economic shot in the arm for Germany’s GDP ranging from 0.1-0.3%.

The study notes that the smaller German cities will stand to gain most from the World Cup in terms of GDP growth rate. The cities which stand to gain the most are —Gelsenkirchen (3.2%), Kaiserslautern (2.4%) and Leipzig (1.6%), while benefits to Berlin, Hamburg and Munich are expected to be less noticeable.

Here’s a snapshot of how a win at the World Cup will help the respective real estate markets in these European countries. For Germany, the stakes are pretty high, especially with property market lagging behind the rest of Europe.

“International investors have invested heavily this past year ahead of the cycle. The football team eventually tends to deliver but this time it might be just a bit too early in the cycle,” the study observes. For France, memories of success in 1998 and the booming real estate market of the following three years are still fresh. “While we think there is an upside in the property markets, we think their ageing squad could do with some refurbishment,” the report said.

Commenting on England, the report noted, “Success will depend on how well their Swedish manager gets captain and international celebrity (Becks) and his star-studded team to click on the day. Rather like the market, they are highly priced.”

For Spain, a win this time could give additional boost to occupational market demand and put further pressure on yields. The report says, “Expect inconsistency on the pitch and insatiable investor demand to be in evidence again”. With a number of key players from previous campaigns still going strong, Sweden can be expected to deliver, like its transparent property markets, another assured performance in the World Cup.

Meanwhile, for Czech Republic, one of the favourites to lift the trophy and a favourite too with investors in real estate, this will be a success story indeed for a nation steeped in footballing tradition and would add further to the well-being of a nation successfully integrating its economy and real estate market with the West.”

Source:

http://economictimes.indiatimes.com/articleshow/1641451.cms