International Real Estate Report

Global Resources for Local Markets
  • China Continues to Present a Rosy Picture for Investors
  • One Year Later: Dubai Ports Deal Still Driving Legislation
  • No More Road Trips for Borat
  • Cultural Resources at Your Fingertips
  • Paris Tops Lists of European Investment Markets
  • Discovering South African REITs
  • The Oscars of Real Estate
  • One-stop Shopping for Global Stats


FOREIGN INVESTMENT

One Year Later: Dubai Ports Deal Still Driving Legislation

A year after a Dubai company's bid to buy the company that operates American ports was rejected due to national security concerns surfacing from a review by the Committee on Foreign Investment (CFIUS), Congress is considering legislation that would increase scrutiny of foreign companies looking to acquire U.S. assets. Some worry legislation might discourage foreign investment. The Financial Services Forum, representing the 21 largest U.S. financial institutions, warned a Congressional committee that too much scrutiny might bog down the process, keeping foreign investors at bay. Limiting the pool of potential investors undermines the value of those assets, harming business owners, their workers, shareholder interests, and Americans who invest in stocks, mutual funds, and retirement funds. Testimony by the Forum's president and COO cited that in 2006, there were 113 CFIUS filings (up 73% over 2005), 7 second-stage investigations (up 250%), and 5 withdrawals (up 150%), strongly suggesting that uncertainty by foreign investors about U.S. approval requirements is leading them to more frequently file proposed transactions for CFIUS reviews, distracting CFIUS from focusing on proposed acquisitions with genuine national security implications. The bill is expected to come to the floor for a full vote shortly after the Feb. 19 President's Day holiday. A Jan. '07 survey shows that when Americans understand the economic benefits, they have a more favorable view of foreign investment. U.S. subsidiaries of foreign-based companies employ 5 million+ Americans, paying compensation of $325 billion annually. Foreign companies also account for roughly 20% of all U.S. exports, 15% of private sector R&D, 10% of private-sector capital investments, and 12% of corporate taxes collected.

 
CULTURALLY CORRECT

No More Road Trips for Borat

Americans can relax. In spite reports earlier this month from entertainment and news mogul Rupert Murdoch that his News Corporation company Fox might be re-teaming with Sacha Baron Cohen for a sequel to last year's cinematic hit, "Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan," a Fox spokesman indicated no deal had been discussed. The culture-clash comedy where Cohen travels the U.S. posing as a native of Kazakhstan filming a documentary, portrayed a number of unknowing Americans as highly politically incorrect, scored Cohen a Best Actor Golden Globe win and its screenplay has been nominated for an Academy Award. A sequel seems far-fetched, given the notoriety the first film has received, making it hard for Cohen to find enough people who don't recognize him to populate a sequel. The film was banned in Russia and protested in Kazakhstan, and Cohen and Fox are facing several lawsuits from individuals portrayed in the movie. Located in Central Asia, Kazakhstan is the largest of the former Soviet republics, excluding Russia. Learn more about the country of Kazakhstan, its culture and its real estate market.


Cultural Resources at Your Fingertips

Each culture has its own customs when it comes to social and business relations. REALTORS® working in a global market need to make the best impression on potential clients, and that means having at least a basic familiarity with the customs and protocols of the culture. NAR's Library offers an online online Field Guide to Business Etiquette which will point you in the right direction for creating lasting partnerships with multicultural clients. Sections include Foreign- Born Clients, Useful Tools, and Books, and eBooks & Other Resources, all of which link to a wide variety of online resources. Use of the online research tool, ProQuest, will be required in some instances. REALTORS® have free access to ProQuest (must be registered and logged into Realtor.org).


GLOBAL MARKETS

Paris Tops Lists of European Investment Markets

For the second year in a row, Paris leads the list of top real estate investment markets in Europe, according to a report jointly published by the Urban Land Institute and PricewaterhouseCoopers. "Emerging Trends in Real Estate Europe" highlights how European and international economic trends and issues affect real estate and describes trends in capital markets, best opportunities for investment and development, property markets to avoid, and gives detailed analysis and prospects for office, retail, industrial, hotel and residential property sectors. Paris was named top market following interviews with 400 industry authorities to identify Europe’s top cities for real estate investment. It rates highly for both total return prospects and low risk. Survey respondents pointed to the city’s economic stability and sustainability, as well as its status as a global gateway, as major reasons for its top ranking. The report noted ample urban regeneration and redevelopment opportunities as attracting investors, and suggests Paris has good prospects for the next two years. London was a close second and Helsinki jumped to third place from sixth place for overall investment prospects in 2006. Overall, European real estate investors are optimistic about the industry’s potential to generate healthy returns over the coming year. Those surveyed believe that real estate still has the best outlook relative to other asset classes despite the phenomenal performance of the past year. Download the Download the full report, or download individual chapters.


Discovering South African REITs

Global investors looking for untapped property investment opportunities are discovering South Africa (SA) as market with serious possibilities. Ernst & Young's 2006 Global REIT report spotlights SA listed property as one of the most exciting in the survey. E&Y pegs the global market capitalization of Real Estate Investment Trusts at more than US$608 billion and rising fast. While the U.S. continues to dominate public REITs, South Africa posted the best three-year returns, with a total return of 34%, up from 23% in 2005. The report describes SA as a lesser-known REIT market, enjoying the lowest volatility of all 13 countries surveyed and offering a mix of high returns and relatively low risk. South Africa was also highlighted by Jones Lang LaSalle as one of the world's most improved real estate markets in its 2006 real estate transparency index. Transparency is a major component of risk assessment. The Institute of Estate Agents of South Africa (NAR's association alliance in the country) has submitted its application for membership in the International Consortium of Real Estate Associations (ICREA), to be put before the membership for a vote later this year.  


BUSINESS RESOURCES

The Oscars of Real Estate

Forget best performances from Hollywood. Now entering its 13th year, the International Property Awards celebrates and promotes industry expertise and professionalism on a global scale, and aims to distinguish the highest levels of excellence in a range of property fields. For the 2007 competition, NAR has become an official supporter of the program as it embodies NAR's commitment to recognizing excellence and promoting worldwide standards of best practice. A review of award winners is a great way to study the best of the best, and how award winning elements might be adapted and adopted locally. Entries are judged from a buyer’s point of view in 17 categories, including best real estate agency, real estate web site, property portal, and more. Entries from 45 countries were received in 2006. Real estate agencies and home builders in the U.S. enter at state level. Top scorers from each one advance to the national level and overall U.S. winners are then judged at the international level in the ultimate search for the best in the world from each category. In 2006, the U.S. produced 12 winning companies, four of which were nominated for the Best International award in their category. The Best International Real Estate Agency was won by Michael Saunders & Company of Florida. View all 2006 winners, or view winners from previous years.


One-stop Shopping for Global Stats

NationMaster is a massive central data source offering REALTORS® a handy way to locate useful information on the world's countries, graphically compare nations, and integrate data into business plans and marketing presentations. NationMaster draws from such sources as the CIA World Factbook, United Nations, and OECD. Using a simple online form site visitors can search on a wide range of data, including immigration (including foreign inflow and outflow), economy, currency, industry and much more. Data can be viewed in the form of pie charts or bar graphs, or correlations and scatterplots to find relationships between variables of statistics. More general information, such as profiles of individual countries including their maps and flags are also available and refer to a fully integrated encyclopedia with over one million articles. Site also features stats in the news, top stats (e.g., most taxed, most populous,) and news articles.

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


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