International Real Estate Report

Global Resources for Local Markets
  • REITs Increasingly Global
  • Insourcing: New U.S. State Jobs Study
  • Don't Let Language be a Barrier
  • China Still Front and Center
  • Relocation Trends Useful to REALTORS®
  • Asia a Hot Market for Luxury Real Estate
  • New Review Focuses on International Real Estate


FOREIGN INVESTMENT

REITs Increasingly Global

As the U.S. real estate market continues to react to the subprime mortgage market troubles, global real estate is attracting increasing interest, much of it in the form of REITs (Real Estate Investment Trusts), which are being touted as a means to diversify, reduce risk and boost returns. Introduced in the U.S. in 1961, REITs hit their stride in the early 1990s, growing from less than $10 billion in equity market capitalization in 1990, to more than $300 billion in 2007. While the REIT market is flattening in the U.S. due in part to consolidation, global REITs are in the early stages of their growth cycle and are being introduced worldwide, including recently in France, Hong Kong, Finland, Singapore and the United Kingdom, with Germany and Italy expected to follow later this year. Besides the U.S., other mature REIT markets include Canada, Australia, the Netherlands and Belgium. REALTORS® interested in understanding the global REIT market can look to the National Association of Real Estate Investment Trusts® (NAREIT), the self-stated representative voice for U.S. REITs and publicly traded real estate companies worldwide. Included among its members are individuals who advise investors on REITs. NAREIT provides industry news, REIT data (including nonmember access) and industry publications and government policy information. Site visitors can review of directory of REITs by U.S. state or by country (scroll to bottom of NAREIT home page for links). Read more about the global growth of REITs from Financial Planning.com.


Insourcing: New U.S. State Jobs Study

"Outsourcing" has been much in the U.S. news as Americans watch jobs moved off-shore to destinations made attractive to owners and stockholders by cheaper labor rates. But according to a new study released by the Organization for International Investment (OFII), U.S. subsidiaries of companies headquartered abroad support 5.1 million American jobs, with an annual payroll of close to $336 billion. The OFII study, based on new data from the Department of Commerce, shows that insourced jobs continue to be an integral part of the U.S. economy, representing 4.4% of the private industry workforce. The five states with the most jobs supported by U.S. subsidiaries are California ( 542,600 insourced jobs), New York ( 378,000), Texas (344,600), Pennsylvania (233,200) and Illinois (226,400). Get the details on your state's insourced jobs, including a list of significant foreign employers within the state. REALTORS® can use this information to identify companies that may regularly relocate management into the U.S. and require real estate services to service employees housing needs.


CULTURALLY CORRECT

Don't Let Language be a Barrier

REALTORS® and REALTOR® Associations can take a lesson from the American Association of Port Authorities (AAPA) web site to help overcome the language barrier with consumers, constituents and clients. Consider these tips, adapted by those offered from AAPA (which has a significant Spanish speaking audience) in the May 2007 issue of "Associations Now." 1) If you're doing a lot of business with a specific non-English speaking group, consider hiring an in-house resource to handle translation and customer service. 2) Don't feel the need to translate everything at your web site. Prioritize and select pages of greatest interest to your audience and/or most important to your marketing plan. Over time you can get deeper into your site, but be selective. If you're catering to a group from outside the U.S., don't incur the cost of translating information that only impacts U.S. residents. 3) Create a association or company dictionary for use in all translations. Some real estate terms may not be easily standardized, so determine the best translation and then be consistent in its use. 4) Finally, don't rely on technology to do the job. Online translation software, such as Babelfish, is a great tool to help get the gist of an email, but a few quick tests will quickly show that software can't replace a human understanding of context and intent.


China Still Front and Center

It's hard to pick up a newspaper or browse the online business news without seeing news of the booming Chinese market. A PriceWaterhouseCoopers' survey of global CEOs revealed that, during 2007, 54% said they would open an office in China and 62% indicated they were forming alliances with Chinese partners. Regardless of the degree to which your business has direct ties with inbound or outbound investors and buyers related to China, real estate professionals interested in the global marketplace are advised to stay current on business etiquette in China. Take a quiz to assess your knowledge. If you don't score 100%, review the correct answers, and/or bone up on general business information and etiquette for doing business with the Chinese.


GLOBAL MARKETS

Relocation Trends Useful to REALTORS®

In today's world of multinational corporations global mobility is on the rise, evidenced in the GMAC Global Relocation Trends Report. The report is based on GMAC Global Relocation Services 2006 Global Relocation Trends Survey Report (GRTS). While geared to human resource professionals, the trends identified in the survey can help REALTORS® prepare to identify and serve inbound and outbound expatriate employees with housing needs. According to the GRTS report, featured in a September GMAC newsletter, 69% of survey respondents report an increase in the number of expatriates over 2005, and 65% of respondents indicate they expect the number to increase further in 2007. The 2006 survey is particularly noteworthy as it represents a milestone in the number of respondents from outside the U.S. reporting on trends related to foreign expats being relocated to the U.S. The top five emerging assignment destinations were China, India, Russia, U.S. and Poland. Four of the five (including the U.S.) were cited as the top countries for assignment difficulties. In the U.S. "housing" was among the specific difficulties identified. REALTORS® can expand their business by identifying local companies which regularly hire foreign employees and position themselves as a resource to overcome housing challenges.

Asia a Hot Market for Luxury Real Estate

Whether domestic or international, the luxury real estate market seems somewhat immune to the current credit crunch and market slow down, highly evident in emerging Asian countries where locations such as Phuket, Thailand and China Beach, Vietnam have been listed as hot luxury markets attracting five-star hotels, golf courses, shopping centers and other high-end investment opportunities. Most luxury transactions in Asia are in hard currency, accounting for the fact the mortgage market meltdown isn't impacting this high-end niche. Another factor is that buyers purchasing luxury real estate tend to have substantial and well-diversified assets, and therefore can more easily ride the ups and downs of any market sector. The luxury market has always attracted international investors as hedge against a domestic market downturn while simultaneously offering the investor a part-time residence or vacation destination while generating nice rental returns. What is changing is that some of the best opportunities are outside the traditional American and European markets. It is now feasible to live, work and/or retire anywhere in the world, and people are increasingly doing so. Recognizing this trend, the 750,000-agent Keller Williams Realty has launched a new venture to make more of its agents experts in that segment of the industry. Brokers serving luxury buyers seeking U.S. property should note Forbes' list of the most expensive zip codes in the U.S.. Income figures show that in 2006, 300,000 U.S. families earned more than $1 million in that year.  


BUSINESS RESOURCES

New Review Focuses on International Real Estate

Research and Markets, the international market research and data firm, has announced the addition of “International Real Estate Finance Review 2006/07” to their extensive catalog. The International Real Estate Finance Review 2006/07 illustrates trends and developments in the field of real estate within the global markets, based on editorial and comment by leading experts from industry associations, investment banks, law firms and property consultants. The Review is an information guide to the property sector, reporting on international developments and offering domestic and industry-specific analysis. The real estate investment market is increasingly global, with a growing number of real estate operating companies and Real Estate Investment Trusts (REITs) investing cross border. In addition, listed real estate investment managers are continuing to role out multi-region/global investment products. Topics covered with the Review include: global real estate capital flows, REITs, cross-border property fund management, and real estate securitization. The Review also features country and regional reviews covering real property in, among other markets, Asia, Austria, Baltics, Canada, Germany, Netherlands, Nordic Markets, and the UK. Order by fax, or make online inquiries. The Review sells for €140.

Report compiled by NAR International Operations, narglobe@realtors.org.


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