Eurovision Song Contest: The Sweet Sound Of Real Estate
The Eurovision Song Contest isn't just about cheesy songs and glitter-ball campery. As serious commentators have long recognised, it is about international politics and the projection of soft power.
Yet the annual 40-nation event also tells an intriguing story about today's European real estate.
Ahead of the grand finale in Lisbon, Portugal, on Saturday — available on YouTube and via local broadcasters — here is Bisnow's sing-a-long guide to the property stories behind the melodies. They include booming investment markets, sanctions causing capital flows to plummet and the centre of the property blockchain universe.
Eurovision: The basics
If you don’t already get why the Eurovision Song Contest is of vital cultural importance, then it will be hard to persuade you. Forty or so European countries sing songs to each other, mostly in English. Forty is reduced to 25, then everyone in Europe votes by telephone. The results — which depend on a violently unstable mix of progressive politics, modern alliances, ancient animosities, camp, irony, toe-tapping appeal and the weirdness and/or beauty of the singers — will be revealed live at 2100 BST (6 p.m. ET).
1. Ireland, potential winners
Ireland is a reliable Eurovision winner, claiming the prize seven times, a record no other country can match. This year Ireland won a place in the final on the strength of a sad-happy song about good-looking boys falling in love (with each other) and their entry is therefore powered by pure Eurovision rocket fuel. A probable winner, the song is set in Dublin’s Temple Bar district, a paradise of smart shops, bars and pubs that the city council once planned to bulldoze and turn into a bus station. Today rents are soaring and international investors piling in. The busiest block, the 17K SF Crampton Buildings, recently sold for €11.2M, up €3M on its last sale in 2014. The yield was 5.76%.
2. Israel, projecting soft power
Israel has been an occasional winner. This year their entry has reverted to old-skool Eurovision — the days of songs called Boom Bang-A-Bang — with lyrics largely composed of farmyard noises. The act is weird enough to be tipped as a potential winner, but the consensus is they reached Peak Irony a bit too soon. This projection of soft power — the target of anti-Israeli hacking — comes as the real power of Israeli investment makes itself felt, particularly in London, where Israeli investors who have recently stepped up their interest in London real estate: Canada Israel, controlled by Barak Rosen and Assaf Tuchmeir, has just acquired a £100M development site in the north of the city, meanwhile Alony Hetz has set up a joint venture to invest £340M in the U.K. capital. They perhaps see opportunities now being missed by the Russians (see below).
3. Ukraine, a lesson in outward capital flows
Russia lost out to Ukraine in the race for a place in the final, after a tense semi-final on 10 May. This time last year the Russian entrant Julia Samoylova was banned from the final (in Ukraine) because she visited Crimea (which was in Ukraine until Russian annexed it in 2014). Samoylova competed again this year, and Russia’s Eurovision unhappiness is directly linked to their political and property problem, thanks to sanctions imposed on Russia.
Sanctions have done no favours to Russian outward capital flows into property. A steep drop in investment since 2014 was beginning to reverse, with Russians spending €1.1B on international real estate in 2017, up by 26% according to the Central Bank of Russia. But this is still a long way behind the €2.3B recorded in 2013, and 2018 could be even worse as Russians repatriate capital or stash it elsewhere. Serious analysis of the Eurovision result suggests it could exacerbate Anglo-Russian tensions.
Ukraine’s Eurovision entries are usually outrageous — see the 2007 contestant for proof. This year it is all about vampires living in pianos and burning staircases, and makes no sense at all. Not likely to win.
4. Estonia, home of blockchain property
Sometimes it is just all about the dress, and that is certainly true for the Estonian entry. The high-tech apparel (which cost a small fortune to move from Talin to Lisbon) is basically a massive cone-shaped projector which produces lovely colours whilst Elina Nechayeva sings pop-opera. The techy frock is appropriate national dress: blockchain technology is behind Estonia’s 1 million-item land registry, meanwhile low costs and a friendly regulatory regime have made it a haven for the creation (and support) of blockchain-linked cryptocurrencies. Estonian blockchain businesses are now starting to revolutionise property lending, too.
