International Real Estate Report

Global Resources for Local Markets
  • Investment to Double in Gulf Region
  • Brazil Top Destination for Latin FDI
  • Indians Icreasingly Buying Homes Abroad
  • Latin American Culture for FDI Improving
  • Global Demographic Shape Future of Real Estate
  • "CHIMEA" is Hot New Region for Investment
  • All Things REIT
  • Free Registration to Premiere US Exhibition for NAR Members


FOREIGN INVESTMENT

Investment to Double in Gulf Region
The number of major global investors in the Gulf Cooperation Council (GCC) markets is expected to more than double in 2008, according to research by Jones Lang LaSalle (JLL). GCC markets include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Until this year, few of the “global 100” property investors had ventured into the region, despite a decade of strong growth. The arrival of major global investors signals growing confidence in the region's legal and regulatory framework. The creation of Dubai's Real Estate Regulatory Authority last July was enthusiastically welcomed as a means to protect investors. Abu Dhabi is expected to soon follow suit. With an increase in market transparency (see JLL's Market Transparency Index), higher quality construction and greater access to debt markets, investors' confidence is increasing as well. International investors are expected to come from a range of sectors, including banking, insurance and real estate development, and from all major economic zones. New investors, including the real estate arm of American insurance group AIG and Singapore’s CapitaLand, represent a relatively small piece of the market compared to existing investors, most of which are from the region or nearby countries such as India and Pakistan. Consequently, their arrival into the market is projected to have limited impact on market prices. Latest research estimates that the value of Gulf projects under development, including property, infrastructure, and utilities, has reached US$2 trillion.


Brazil Top Destination for Latin FDI
Latin America and the Caribbean received a record $105.9 billion in foreign direct investment (FDI) last year, up from $72.9 billion in 2006, according to the U.N. Economic Commission on Latin America and the Caribbean (ECLAC), due to regional economic growth and sustained global demand for natural resources. Within the context of global FDI, growth in Latin America and the Caribbean in 2006-'07 reached 46%. Among developing regions, FDI in Latin America/Caribbean registered the highest increase (an average 17% rise in developing countries and 43% in economies in transition). Brazil was the main recipient country with US$34.6 billion (84% more than the previous year), followed by Mexico ($23.2 billion), Chile ($14.5 billion) and Colombia ($9 billion). View a chart of net inflows of FDI by host country. The main sources of foreign investors in the Latin America/Caribbean region in 2007 were the United States, the Netherlands and Spain. See a report abstract or download full 281 page report, or view 448 KB slide presentation given by José Luis Machinea, Executive Secretary of the ECLAC. Read five expert's view on prospects for FDI in Latin America in 2008 and beyond, from Inter-American Dialogue. Inter-American Dialogue.


CULTURALLY CORRECT

Indians Icreasingly Buying Homes Abroad
The rise in the number of Indian millionaires, along with a fall in real estate prices in the UK and the U.S. as a result of the sub-prime mortgage crunch, have fuelled the demand for property abroad. London is on top of the list followed by the U.S. and then Malaysia and Thailand, according to a local Jones Lang LaSalle real estate consultant. London is attractive due to India's historical ties with the U.K. Locations in the U.S. are sought after because many Indians have children studying in the country and want a home near their children. Houston, New Jersey and Texas, in general, are some of the prime locations, reports the chairman of realty firm Knight Frank India. The Reserve Bank of India allows an individual to make an overseas investment of up to $200 million. Westerners looking to attract and serve Indian clients should take time to understand Indian culture and business etiquette.


Latin American Culture for FDI Improving
Central and South America have long been synonymous with economic paralysis. Economic growth has been limited by ruling dictators, restrictive policies, and foreign meddling. A new report by the Latin American Venture Capital Association (LAVCA), however, suggests that things may be changing. The LAVCA rates its 13 constituent countries by a "scorecard" reporting their progress relative to more investment-friendly countries. This year, two countries, Brazil and Chile, rose above others in the region, although most of the countries are also on their way up. Chili ranked highest within the region, but Brazil's ranking is most notable given it improved its score by 10 points from the previous year. Only Mexico dropped from the previous year's ranking. Read a summary and nine major findings from the study or download the full 43-page scorecard.


GLOBAL MARKETS

Global Demographic Shape Future of Real Estate
Three key demographic trends--aging global population, rapid urbanization and new migration patterns--will shape the real estate industry of tomorrow, according to Global Demographics 2008: Shaping Real Estate’s Future, a new publication by the Urban Land Institute (ULI). The report provides insight about the effect of global demographic change on real estate through a review of critical issues, an examination of core fundamentals and an analysis of underlying factors. REALTORS® who understand these trends can make business decisions to embrace the trends and grow their business accordingly. Real estate implications addressed from the report include for these trends include: 1) Growth in the retirement housing market, medical facilities and an increased demand for affordable senior housing and senior housing options in ethnic communities; 2) Increased investment in urban infrastructure and increased need for both housing and retail services for a growing urban workforce, better land use control policies will be needed, and in stagnant or shrinking markets new construction will be viewed as replacement properties; 3) increasing and more diversified migrants will require international-quality real estate, especially in emerging markets, and the estimated $318 billion in remittances from immigrants to their families will increasingly support residential and retail development in the country of origin. Trends vary by continent with North American benefitting from migration patterns and Europe and Japan being impacted by aging populations. Investors and developers, particularly, should take note of such trends. Read a detailed press release on the report, or order directly from ULI bookstore.


"CHIMEA" is Hot New Region for Investment
According to recent Real Estate Opportunity Index by A.T. Kearney, a global strategic management consulting firm, the most popular targets for companies, developers and investors scouting the world for real estate bargains is the new economic region stretching from China across India and the Middle East to Africa--dubbed CHIMEA. The Real Estate Opportunity Index reports that the top 50 emerging markets represented in the report spent a combined total of $1.7 trillion on construction in 2007, with a 5-year compound annual growth rate of up to 6%. The U.S. credit crunch has resulted in a growing number of real estate investors looking outside the United States and Europe for opportunities, and according to A.T. Kearney, international property developers are finding the CHIMEA region's large and rapidly growing markets too attractive to ignore. Focusing on emerging global markets, the index weighs real estate development potential based on construction spending and growth as well as a combination of country risk and ease of doing business. With their rapid growth rate, China and India top the index with Thailand in a more distant third place. China’s estimated construction spending for 2007 alone totals more than $500 billion. Saudi Arabia dominates the Middle East sitting in 6th place on the full list, with the UAE coming second in the region. The Index also notes that investors from CHIMEA have  $4.1 trillion to invest, and real estate development remains an attractive destination for capital. The Real Estate Opportunity Index was designed to help property developers make investment decisions outside familiar markets. View a snapshot of the 2008 Index, or download A.T. Kearney's report on the CHIMEA.  


BUSINESS RESOURCES

All Things REIT
The National Association of Real Estate Investment Trusts (NAREIT) has launched REIT.com, a new Web portal designed to be the home for “All Things REIT.” According to NAREIT, REIT.com is designed around easy-to-use navigation that lets users find relevant content based on subject or user type, and offers valuable information for anyone interested in REITs, including real estate professionals. Site visitors can access the latest investment news, industry data, event information, policy updates and more. In addition to a variety of information on U.S. REIT indexes, the site also offers a Global Real Estate Index Daily Return and (coming soon) a Global Real Estate Index Historical Values & Returns. NAREIT is the representative voice for U.S. REITs and publicly traded real estate companies worldwide. Read investment company Cohen and Steers' March '08 global REIT investment commentary and outlook.


Free Registration to Premiere US Exhibition for NAR Members
Much has been written on the opportunities for Americans to invest in emerging markets around the globe. Now the focus has turned and investors from emerging markets will be looking at the U.S. for opportunities at Cityscape USA, a B2B real estate event from Cityscape, organizers of the world's largest such event--Cityscape Dubai--which attracted nearly 52,000 visitors from 136 countries in 2007. Cityscape USA takes place Sept. 10 – 11 in New York City and will showcase investment opportunities in emerging markets as well as opportunities for the U.S. real estate industry to attract investment into U.S. real estate assets, projects and vehicles from emerging market investors. Parallel to the exhibition will be a three-day conference offering visionary keynote presentations, interactive panel discussions, stimulating debates, investment analysis, specialized workshops. The timing is good for a premiere U.S. exhibition. The sub-prime mortgage crunch coupled with the ongoing liquidity and credit crisis has resulted in U.S. investors looking to gain exposure to other real estate markets. Additionally, the U.S. was deemed the "most stable and secure” country for real estate investment and the country with the best opportunity for appreciation in the 2008 survey of the Association of Foreign Investors in Real Estate (AFIRE). NAR is a sponsor of the event and has negotiated free access to the exhibition for NAR members (a $250 savings) and a 20% discount on the conference (A $699 savings) for those who register before July 15. Get the details, including how to get free exhibition access.

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


Notice: The information on this page may not be current. The REALTOR.org archive is a collection of content previously published on REALTOR.org. The archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.