The effects of the euro’s launch took hold this week with calls for lease reform and moves to allow rent payment in the new currency.Head of property at BT Alan White said that a single currency will make occupation costs comparable across Europe, which will lead to pressure from multinationals for similar uniform leasing structures.‘I would not be too impressed with a 15-year lease when everyone around me had leases of eight years or less,’ he told a Nabarro Nathanson conference.He also warned that the European Commission could make a move. ‘If we continue with our much longer leases, there’s every chance that Brussels will step in and try to reduce them,’ said White.Meanwhile, REIT Asset Management, run by Kevin McGrath, this week wrote to its major UK tenants offering the chance of paying rent in euros.Most of REIT Asset Management’s tenants on its £150m European portfolio already pay rent in euros. And REIT is also looking for opportunities to invest in sale and leaseback deals in euros.McGrath said that he is looking into the possibility of raising debt in euros because European interest rates are lower than the UK.According to new research by Fletcher King and solicitor Radcliffes, landlords cannot compel tenants to pay in euros. Member states already signed up to the euro are covered by a specific European provision which protects parties accepting or paying in euros for three years. The UK is not covered by this provision, but as sterling is legal tender, parties cannot be obliged to pay in euros.Patricia Godfrey, head of Nabarro Nathanson’s single currency group, said that the euro will remove the risks of investors hedging against currency fluctuations.She added that the euro would make investors focus on tenant quality and market fundamentals, rather than how they would deal with individual currency risks. Former hsbc economist Roger Bootle and Richard Ellis’ Angus McIntosh debate the pros and cons of the euro in next week’s issue of Property Week
Brisbane auctions ramp up this weekend. Photo: Darren England.Brisbane’s auction market is performing well despite a comparably low clearance rate, according to Corelogic.The analyst’s latest data reveals Brisbane last week recorded the nation’s lowest clearance rate at 50 per cent.For the same period, Sydney recorded a clearance rate of 76.8 per cent while Melbourne had 77 per cent clearance.However, CoreLogic auction spokesman, Kevin Brogan, said a deeper dig into the numbers proves the city is actually doing well in the auction stakes.Mr Brogan said, historically, a clearance rate of 50 per cent for Brisbane is good, particularly when you consider relative prevalence of auctions across capitals.“In Sydney and Melbourne 40 per cent or more of houses go to auction,” he said.“Fewer than 10 per cent of the properties go to auction in Brisbane.”Brogan says agents don’t necessarily measure the success of an auction campaign by whether the property sells under the hammer.More from newsMould, age, not enough to stop 17 bidders fighting for this homeless than 1 hour agoBuyers ‘crazy’ not to take govt freebies, says 28-yr-old investor7 hours ago“It’s possible it (may) help you to negotiate a private treaty sale which is, at the end of the day, a successful outcome.”Brogan also said the average vendor discount for private treaty shows Brisbane, at five per cent, is operating in-line with southern capitals.Vendor discounts relates to the eventual sale price for a property compared to its initial asking price.“Sydney’s 4.1 per cent and Melbourne’s 3.8 per sent,” he said.Among the Brisbane properties up for auction this Saturday is 28 Loch St, West End at 9:00am 28 Loch St, West End.The draw of Brisbane State High School catchment will overcome most buyer’s reservations about having to raise a paint brush.If you have a wish to be river side, take a look at 34 Gordon St, Hamilton at 10:00am where a gathering crowd will see a very desirable waterfront holding go on the block.In addition, 4 Stubley St Wavell Heights at 11:00am looks set to make waves with its unique architectural design sure to draw in the locals.