Property News no Clever Investor Should Ignore
Clever investors build their portfolios around what happens in the real estate world. Investors interested in foreign real estate must keep themselves informed in regards to global current events. Global ambitions in China, expected growth in Japan’s real estate market, and the 2016 outlook of Asia Pacific real estate are crucial developments with the potential to create continuous revenue.
Chinese Ambitions Escalate
Mere days after Anbang Insurance Group acquired Strategic Hotels & Resorts from buyout firm Blackstone Group LP for US$6.5 billion, it attempted to rattle Marriott International’s cash and stock bid for Starwood Hotels placed in November 2015. Marriott quickly improved its takeover offer to $13.6 billion, but the intention of Chinese investors was clear.
At first glance, real estate investors may not view this as significant; however, they are urged to build long-term strategies for their investments. In the United States alone, transaction volumes were pushed to $313 billion, breaking the previous record of US$304 billion from 2007.
According to JLL The Investor property news, Chinese insurance groups may eventually allocate up to US$240 billion to direct real estate outside of China’s borders over a long term period. This conjecture is based on current metrics.
Japan’s Real Estate Market Slated to Boom in 2016
Northeast of China sits Japan, a country known for its industrialism and high property value. The global economy’s unpredictability has new investors attracted to Japan’s high return outlook and low borrowing costs. Tokyo alone saw direct commercial real estate sales more than double those in the previous three-year period, and this firmly confirmed the city as a favourite among global investors.
In fact, foreign investors claimed 22 percent of property acquisitions by volume last year, according to The Investor, and Tokyo was ranked the number one market of choice for the third year in a row. In a surprise move by the Bank of Japan, a negative interest rate was adopted in January. This move ensured some built up reserves will be deposited into real estate debt and equity channels.
Overseas Investment Opportunities
Foreign investors interested in rental revenue are presented with unique investment opportunities across the globe. In American cities such as Northrock, large multifamily assets became available this year. Real estate values are slated only to increase over time, and older homes are soon to be demolished to make way for larger, more modern homes.
Back in the Asian Pacific, beachfront areas sit ready for development, and ideally located industrial facilities are open for inquiries. Developing beachfront land for communities is a lucrative long-term investment, and local agriculture can provide tax relief and holding income.
In EMEA, multiple office investments call to investors. If the right property is acquired, an investor ensures he or she can rent it at a significant discount and thus strong rental growth prospects.
Clever investors focus on diversifying their portfolios, and opportunities in the coming year abound. The Investor offers a strong opening for those interested in keeping their options open and portfolios thriving.