The next game changer that Finance Monthly spoke with is Pat O’Connor who has been a leader in the real estate data business since 1988. He has expanded the real estate data business from a two-page monthly newsletter on Houston apartment trends into a national database for both commercial and residential real estate.
What inspired you to start Enriched Data?
The data quality from existing national data providers simply did not have either the breadth or depth of quality required for us or other real estate professionals we met. A second factor was the existing commercial real estate data sources had either limited or inaccurate contact data for the owners. In many cases, the owner contact data was simply the name of an entity. Many real estate professionals need to be able to contact the owners of real estate to transact business. It is incredibly time consuming to start with the name of an entity and have to research to find the name of the owner. The need for accurate owner contact data is a recurring theme we have heard from real estate professionals. They do not want to spend their time researching phone numbers on the internet; they want to spend their time doing deals.
What solutions does Enriched Data provide?
Enriched Data helps companies to increase their revenue by 30 to 100% through a focused effort that includes excellent data, intelligent marketing and real estate professionals. Our efforts are currently focused on mortgage bankers and real estate investment sales professionals. We expect our clientele to expand to include real estate leasing and management professionals, as well as vendors to the real estate industry. Our core purpose is to increase our clients’ revenue.
How are you accommodating small and large companies?
We serve hundreds of clients, including seven of the ten largest real estate service providers in the USA. We also serve one man companies. Our data is accurate and vast enough to supply the big companies. For those same reasons, we help to make the smaller companies more efficient and able to compete with their larger competitors. Our customer service team is pleased to work with companies regardless of size.
What are your biggest pitfalls and how have you overcome them?
Accurate real estate data has been the greatest challenge. We have built proprietary software to facilitate the research process and built in validation criteria to identify anomalies. Training researchers has been a key step in the process. When we started, researchers were only finding email addresses for about 15% of the property owners. They are now finding email addresses, Linked-In accounts and company websites for about 70% of the real estate owners. Quality control is also a vital part of the process. We call the phone numbers to verify their accuracy.
What do you see as the most important challenges that Enriched Data faces? What specific strategies are you implementing to overcome them?
The most important challenges facing Enriched Data are understanding what specific information clients want and how they want it delivered. While it is helpful to meet with clients and prospective clients to discuss their plans and needs, the extreme pace of change in information technology and marketing generates a dilemma where many people don’t really know what they want. In many cases, real estate professionals are attempting to generate sales, whether in building sales, loans, leasing, or as vendors to buildings. The changes in digital marketing and psychographics have not been inculcated by the leadership of many real estate organizations. Having raw real estate data can move you part way to maximizing sales. However, knowing how to use the data effectively is essential. In many cases we are working with clients to help them develop a marketing and sales strategy, and then introducing them to the marketing professionals who can best use real estate data.
How can someone use your data for predictive analytics?
We have a large number of predictive analytics for clients. The simplest for commercial mortgage bankers is providing them with information on maturity dates for loans with large prepayment penalties. Slightly less direct is providing mortgage bankers with information on buildings with construction loans that are prime for long-term debt. The analytics are more complicated for single family. The first step is to understand the target market. The second step is to evaluate people who have used the product, for example, a home equity loan. If the client does not have such clients, it is possible to identify them from the public records. The next step is to use psychographics to identify the types of people who are the most likely to purchase. The next step is to identify a universe of possible borrowers. For example, if the product is home equity loans, you identify property with the requisite amount of equity. The final step is to overlay the psychographics over the universe of possible borrowers to identify those most likely to purchase. Psychographics can often identify people who are four to ten times more likely to purchase.
You have been CEO of Enriched Data since March 2015. What have been or are your priorities in your role?
There have been three priorities. The first priority has been meeting with clients to understand their needs, how they use data and their data requirements which are not being met. Second, we have been building a research team and electronic research tools to facilitate research of real estate sales and mortgages. The third priority has been acquiring tax rolls for 97% of the United States and deeds and deeds of trust to cover the same area. The raw base real estate data from tax rolls, deeds and deeds of trust is merged and then enhanced with detailed contact information on the owners, lenders, and borrowers.
What have you most enjoyed about operating within the sector over the past decade?
Working with clients to understand their needs and then working to fulfill those needs as information technology is changing, has been fascinating. Being part of the generation that has moved real estate from hard copy books to the Internet has been gratifying. It has also been a pleasure to integrate expertise in IT, real estate data and determining how to locate and integrate multiple sources of data. While the term big data is often used, we are spending more and more time seeking and integrating additional fields of data to enrich the data and provide clients with the data they need.
What are the main drivers for the development of the real estate industry in the US in the near future?
There are at least three important trends affecting real estate in the US. Retailers are seeing more and more retail spending moving to the Internet. We will continue to see entire categories of retail businesses, such as movie rentals and book stores that are largely replaced by internet sales. There are trends in office space use however they are not as clear. There are factors tending to reduce the amount of space a company needs, departments working from home. For example, many appraisal firms are sharply shrinking their office space requirements by having team members work from home. The other trend in office is for micro spaces with companies such as WeWork providing office space options from as low as $45 per month. There are a number of competing companies and is likely to be consolidation in the micro-office market. Finally, the number of households living in apartments has been increasing due to: 1) higher home prices, 2) reluctance to commit to a mortgage and a fixed location, and 3) people are waiting longer to get married and have children.
What are Enriched Data’s goals moving forward? What does 2017 hold for the company?
Enriched Data’s goal is to have the best quality residential and commercial databases available, merged with the teams and technology to allow clients to effectively use data. We have forty software engineers, which is more than any of our clients to my knowledge. Providing both the data and the information technology and marketing resources to allow clients to effectively use data is our long-term goal. During 2017 we will be working on completing our inventory of accurate contact data for all real estate owners of any commercial property worth over $2 million across the US.
2016 has been quite a year for global property markets. China’s slowdown, the impeachment of Brazil’s president, the Brexit referendum in the UK and the US presidential election have all contributed to a rather tumultuous year. Will property markets fare any better in 2017? And where precisely are the hotspots that bear watching as the new year unfolds? Ray Withers, CEO of Property Frontiers reveals all…
UK – era of the staycation
In 2009, during the height of the recession, UK residents made 15.5% fewer overseas trips and 17% more domestic trips. Since then British holidays are still gaining in popularity: the number of domestic trips in 2015 was up by 11% on the previous year. The Brexit referendum’s repercussions may well change how we experience summers to come. This is the new era of the staycation.
While residential rental yields are likely to remain strong (outside of London), with so many unknowns house price changes remain tricky to forecast. For UK property investing in 2017, we believe that holiday homes, coastal cottages, and hotels will be popular with investors looking for a favourable stamp duty environment, high yields and insulation from market uncertainty. To maximise returns, look for regions with natural or cultural appeal, unflagging visitor numbers, and an undersupply on the hospitality market.
UK – the hangman loosens the noose on landlords
Philip Hammond’s 1994 election material slipped in a humdinger: ‘hanging for premeditated murder.’ The question is: when it comes to fiscal policy impacting landlords, will the new Chancellor play the hangman or the handyman?
With rock bottom mortgage rates and rent increases of 19% forecast for the next five years, it is still a good time to be a landlord. The lack of supply on the market could well spell a good opportunity for investors. University towns like Bristol and Cambridge and secondary cities like Liverpool, Manchester and Sheffield should remain on the radar for strong yields next year.
Europe – secondary cities withstand shaky politics
Europe’s fractious politics will have a big year in 2017. For an early indication of how those decisions might affect property markets, look to Italy and Austria in the aftermath of their December 2016 votes. The defeat of Renzi’s constitutional referendum in Italy, for example, could cause problems for struggling banks and infect the wider economy, including impacting mortgage lending.
The victory of the liberal over the far-right candidate in Austria’s presidential election, however, favoured stability and European integration. Given that Vienna is unlikely to end its seven-year streak atop Mercer’s global quality of living ranking and its housing market is just 20% owner occupied, the result may well safeguard the city’s growing reputation as a buy-to-let hotspot.
Other cities we think merit attention for high yields in 2017 include Lisbon (thanks to tech clusters and the historic centre), Utrecht (enjoying the Netherlands’ continent-beating 6.57% yields but without Amsterdam’s bubbly prices), and Barcelona (still down on its peak, with growing business appeal).
Europe – Brexit’s beneficiaries?
When (if?) Britain triggers Article 50 in 2017, will we see bankers transfer en masse from London to Amsterdam and startups relocate from Manchester to Hamburg? While large scale migrations are unlikely, the pressure will be on for British cities to reassert their global appeal if the property market is to bounce along at 8% growth again in 2017.
European cities will be putting up a strong fight, and battling to skim off what talent they can. Frankfurt and Paris will make particularly aggressive bids, but they will need to need to drastically improve their supply of office space if they are to become truly viable alternatives.
We may see a new trend for Brits doubling up their holiday or retirement homes as tickets to visa-free travel. Spain and Portugal could see a steep upswing in applications for their ‘golden visas.’
North America – punching above its weight?
The US rocketed past the UK as the stage for the biggest political upset of 2016 with the election of Donald Trump. The S&P Case-Shiller home price index ends the year at a new record peak and such punchy growth will likely continue into 2017. Even if the market proves to be overheated, more responsible lending means a sub-prime-scale implosion is a very distant possibility.
The other theme of US house price growth, its patchy distribution, may also become more pronounced. New York home values appear comatose in comparison to Portland and Seattle, where prices grew by 12% and 11% respectively in the year to September. Yet lunatic price hikes across the border in Canada, make even those numbers look comparatively demure; Toronto closes out 2016 leading the Teranet and National Bank of Canada index with an insane growth rate of 34.6%.
Further afield
South America may become a less daunting investment prospect in 2017, with Brazil and Argentina poised to shake off the political deadlock of last year and Colombia coming closer to peace. Our pick for an enticing investment target is Peru, where a new business-friendly government could revive the property boom and Lima’s hotel market should benefit from fast-growing visitor numbers, a generous tourist spend, and limited supply coming on to the market.
In Africa and the Middle East, the price of oil has played havoc with economies. Property markets could well see a boost if the price of oil rallies in 2017. This could benefit countries like Ghana and Uganda, where the economies are sufficiently diversified to avoid the pitfalls that accompany surprise discoveries of oil. Land development is already rife in their respective capitals of Accra and Kampala.
Investors have been glued to Iran’s gradual unfurling onto the global stage and will continue to look on in 2017, though caution is advised until President Trump’s official stance makes itself clear.
In Asia, Indonesia and Vietnam are making encouraging moves to attract foreign investors, and boast the economic growth to back it up. 2017 will be crucial for testing how well these new rules work in practice, and early birds who plan appropriately could catch the juiciest worms.
China might decide to employ state intervention for the forces of good to re-jig its land imbalance and loosen the notoriously prohibitive hukou residency permit system. This would allow demand and supply to better align and let some steam out of the Chinese property market’s swelling paper lantern.
Finally, our client database reveals a growing share of Indian investors contending with their Chinese counterparts as the dominant group of family buyers casting a wider net for safe havens overseas. Though the UK has not lost its appeal, we might expect to see them target regions closer to home as traditional Western markets start to feel more volatile.
(For more information please visit Property Frontier)
Turning our attention to office leasing, Finance Monthly interviewed the Managing Director of JLL Czech Republic and CEE Board Member-Tewfik Sabongui who offers a rich insight into the sector and tells us about the strategies that he employs when advising his clients.
JLL was established in the Czech Republic back in 1992, as the first country from the current seven countries in CEE.
Can you tell FM a little about the services you provide and the kind of clients you deal with?
Our clients are a mix of global, international and local clients to whom we offer a wide range of services, such as leasing services (office, industrial and retail), valuation, investment, project management, residential, design & fit-out, technical due diligence and research.
How do you tailor your services to the needs of each individual client?
It is absolutely critical that we identify and design the scope of our services to the specific client needs and in line with the contemporary trends and requirements of the clients in each market, in order to advise them on how to meet their current and future plans. One of the latest trends in the office sector today for example is "work space" solutions, which are currently important to developers, occupiers and investors alike. Today, a simple design of the office including space plan and work stations solutions or meeting the latest sustainability requirements is no longer enough. We now have to assist with designing an office that will create an environment which will offer ample flexibility, grow productivity and create a "happy" feel, one that will improve internal communication levels, retain employees and attract new talent. On the other hand, each client, depending on his business model, requires dedicated and special attention. Investors will look mainly at yielding and value add assets, ideally in prime locations with blue chip tenant mix, while developers will focus on the right location, the overall size of the project and how much can be build and how to best construct and design it to allow maximum flexibility when dividing the space for multiple tenants. Tenants on the other hand are very similar to the Developers, they look for properties and offices which offer them enough flexible space with a potential for future expansions and growth, an efficient layout, in a good location in terms of amenities and access and developed meeting the latest norms and standards of sustainability.
Are there at times particular challenges involved in delivering services? Do you have any examples?
The challenges are our daily bread and butter. These can be very different as every client needs to achieve a specific goal. However, I’d say that the most common types of challenges that we deal with on a daily basis are of technical and commercial nature. IT solutions are also becoming an integrated part of our modern business conduct and hence there is a constant need and strive to be always ahead of the curve.
As a thought leader, what specific tactics do you implement when assisting clients with office leasing? What are the complexities that you are faced with in the process of negotiating lease terms?
I would say that there are no special tactics – what is vital is to able to carefully listen to what the client is saying and what their needs are in order to provide the right advice and service and work determinably on achieving it. One of the most common mistakes advisors do is to assume things without having properly understood what their clients’ needs are.
What is the process for assisting clients with financial analysis? What are the key considerations that need to be looked at to successfully assist your clients?
It is critical to have a good understanding of both the local market and the global sentiment and requirements, in order to be able to provide quality financial analysis to clients. A proper underwriting of the asset, being able to factor all different types of variables that affect the price calculation, thorough market intelligence and technical due diligence are all imperative for a successful financial analysis, which also need to be supported by solid legal and tax advice, and a targeted marketing plan with well-prepared reports.
Do you have a mantra or motto you live by when it comes to helping your clients with office leasing?
The one thing that I constantly remind myself of when advising clients is that I want to treat my clients the very same way I would like to be treated and to always strive to do everything in the best possible way I can. Personal relationships and building a base of trust and transparency while maintaining an ethical code are absolutely critical to developing and retaining such relationships.
A commentary from Rick Nicholls, Managing Director, Bastien Jack Group Ltd, UK property developer.
In short, we have opportunity.
Initial shock at the prospect of leaving the EU sent the markets into decline, but have they not reacted pretty much as anticipated? Never letting a crisis go without opportunity, selling high to force a low, and then buy back? Since then there has been some indication stability is returning to the markets though GBP to USD and Euro are still trading lower. This is a good thing for UK exports, making them more competitive, assisting those companies that rely on export markets to grow. The UK vote for Brexit probably doesn't mean that the housing market in the UK is about collapse either. While some uncertainty in the short term may reduce house price growth, for the longer-term property investor, this could be a good opportunity for investing.
The foreign property investor has a boost in value-for-money
In the 24 hours after the Brexit vote, the value of sterling fell on foreign exchange markets. Not by as much as predicted but by around 6% against the euro and 8% against the dollar. As I'm writing this, the pound is now worth €1.11. This fall means the European property investor has more sterling to spend.
Demand for property, specifically in London from foreign investors is still likely to increase, interest has been high from China and Asia as their currency exchange has automatically allowed them a discount on current prices. This though is likely to bea short window of opportunity as we see markets recover from the initial shock.
Domestic demand will remain strong
Demand from home buyers and renters probably won't collapse either.
There is concern that demand for housing will fall in London and the UK. However, parliamentary research produced for the 2015 Parliament put demand at between 232,000 to 300,000 new housing units per year through to 2020. Demand for new homes is exceeding supply by around 150,000 every year. This demand, fed by the number of new households created each year, is unlikely to fall below the level of supply.
Immigration will probably remain strong
One of the main negotiations the UK and EU will have to discuss is the free movement of people. Despite the ‘Leave' campaign suggesting a limit to immigration, we now understand there needs to be movement but objective negotiations will have take place. This will form a significant part of the negotiations to leave the EU.
Outside the EU, the Prime Minister's current visit to India has the subject of immigration firmly on the agenda for a post Brexit trade deal.
Fundamentals of the UK Property Market
The uncertainty of the exact outcome of Brexit may cause the property investor a little nervousness, but the fundamentals for UK property remain strong.
In terms of capital growth, there are a number of comparable data choices but the Real House price tracker provides more meaningful guide to house prices and has been adjusted for the effects of inflation over the same period. Results confirm the increases in house prices have risen faster than inflation, and includes the last recession where the fall can be seen as a correction when compared to the overall property performance.
There has been widespread comment as to the likely effects on house prices, with falls of between 5% and 10% for areas outside London, though little evidence can be found to support this so far.
The BTL investor has also seen positive movements since 2001 with the size of private renters beginning to grow again.
Annual rent rises too have accelerated in recent years and these are not limited to London. Bristol and Brighton both enjoyed increases, averaging circa 18% in 2015 compared to the previous year. The insurer Homelet reported similar rises in the North (Newcastle upon Tyne and Edinburgh) with around 16% over the previous year. Ultimately the increases are attributable to what's happening in their specific area and will be influenced by strong fundamentals. Perhaps Hull can expect some positive growth when it is crowned City of Culture?
Rents in London have continued to rise with greater pace than other areas in the UK but have slowed since 2014, therefore a narrowing of the rent inflation gap between London and the rest of the UK.
Even with the recent policy change for buy-to-let investors paying additional stamp duty, more people have turned to BTL investments perhaps as an alternative to low interest rates, bolstered with the knowledge the pace of house building has not kept up with demand therefore sustaining their investment. At the time of the referendum result, there was speculation the base rate would reduce from 0.5% to 0.25% which did take place in August. The Bank of England indicated they would consider reducing further if the economy worsened, which so far has not been the case. It was also confirmed at the time, they also would add money to support confidence and restrict banks freezing liquidity, if not this would probably cause a further credit crunch and restrict mortgage finance. The governor of the Bank of England, Mark Carney, confirmed the reserve of £250bn can be made available if required.
Carney further commented the substantial capital held and large liquidity gives banks the flexibility to continue to lend to businesses and individuals even during challenging times. This suggests provision and safeguards are in place to maintain current lending to suit demand.
Since the referendum, the markets have rallied well and only recently fallen as investors are perhaps concerned that central banks around the globe are easing up on the monetary policies given the uncertainty of the US election result.
In the UK, mortgage approvals by the main banks increased in September after a 19-month low in August. They were lower than the year before but speaking with our local agents, they suggest it's down to a lack of supply of new build property rather than purchasing confidence.
There are four main areas for focus as we get to grips with the prospect of the UK outside the EU.
1) Calm - we have some indication this is already with us; the markets do seem to have calmed. This is probably due to all the positions the markets took on ‘Remain' have now well and truly played out. It's not over yet though, the volatility is set to continue until Article 50 has been triggered and a new directional plan from the government for the UK to leave is known.
2) Change - Nothing ever stays the same, what works for today may not be right for tomorrow. A pertinent example is Kodak, they tried to ignore new technology hoping it would go away by itself on the basis of it being too expensive, too slow, too complicated etc. It wasn't and their market changed irreversibly in a relatively short period of time, moving from wet film to digital technology.
3) Opportunity - Leaving the EU does provide opportunity. With price correction, there is opportunity to procure better land deals than prior to the referendum, as there may be fewer developers with available funding. Contractors had full order books and build costs had become very high prior to the referendum. We are aware some development contracts have been cancelled as a result of Brexit. Therefore, there might be more opportunity to reduce build costs as price elasticity plays out. The current volatility will ease. The fact the UK has to build more houses to meet demand won't change.
Bastien Jack Group Ltd has a strong project pipeline and always procures sites which have strong fundamentals and in areas where people want to live. There is a huge amount of due diligence which goes into every site appraisal including courting many local agents and advisors to confirm local demand and Gross Development Values. Speaking with agents in our pipeline areas, they have confirmed confidence is still strong and enthusiastic house viewings are still going ahead. As long as lending is still being offered and liquidity remains within the economy, there remains a great opportunity for us to progress.
(Source: Bastien Jack Ltd)
JP Donnelly, founder, www.5starvillasales.com
Buying a holiday home is one of the biggest decisions you will ever make; make it right and you will have a long term investment for you and your family to enjoy for years to come. However, the process of buying a vacation home can be overwhelming, negotiating potential language barriers, dealing with the legal aspects, even finding the right home in the first place. As experts in luxury villa sales, here are our tips to help you on your way.
I acquired my first holiday home aged 24 when I bought three apartments in Alanya and for me it was always an investment rather than a home and I feel this distinction is important. If you’re looking for a property as an investment your criteria would be different to a second home. The key to a good investment property is often timing; buying at the right price in the right conditions. And if your motivation is purely for a holiday home, then look at factors like flying time and flight availability from local airports to make even long weekends at your home in the sun feasible. But the reason that most people buy a vacation home is to be able to use it as a base for family holidays for a number of weeks, renting it out the rest of the time. The main issue to consider here is the demand year round, alongside issues like maintenance and durability of fixtures and fittings and facilities- a private south facing pool is something almost all renters will ask for!
Emotion undoubtedly drove the purchase of my first holiday home. Alanya in Turkey was an area that I knew and loved and it is extremely likely that when it comes to buying your holiday home, you too will be drawn to locations that perhaps you have holidayed in in the past. But don’t let emotion completely drive the purchase. When thinking about location, consider your main reason for buying. For pure investment then locations like New Zealand and Florida are good bets; Florida came fifth in an investment review of American property hotspots in 2015. Again, timing is everything here; look at prices over the years and only buy when the conditions are right.
For a pure holiday home, look at European destinations like Spain, Cyprus and Turkey to maximise your time out there, and if you do consider further afield bear in mind that this will usually mean less holidays but of longer duration- your schedule and lifestyle will often make this decision for you. For a holiday home that you also rent out, the demand for short term rental is key with Florida having one of the best rental markets. 5 Star Villa Sales has 4 to 9 bedroomed vacation homes at the exclusive Champion’s Gate gated community, offering strong rental potential and yield. Expect to pay around £341, 993 ($512,990) for a 3812 ft², 8 bedroom, 5 bathroom, 2 garage ‘Maui’ home. The rental income on a property like this can cover ongoing costs, including mortgage, management and maintenance fees whilst allowing owners to enjoy 3-4 weeks in the property each year. At current rates the 8 bedroom Maui will rent at £2629 for 7 nights.
Before you set out on a trip to research properties, it is always best to work out the figures and if you require a mortgage, then look to obtain a decision in principle beforehand. This puts you in a stronger negotiating position. I have come across many, many people who have purchased their holiday home without the assistance of a lawyer, but in my opinion, their assistance can be invaluable- especially if you are a cash purchaser. A lawyer will look at aspects such as outstanding debts (like maintenance fees for example) that are owing on a property so that you don’t get lumbered with them post purchase, and ensure that any taxes due are paid. An English speaking lawyer can also assist with overcoming any language barriers. Research potential lawyers beforehand and find out if they specialise in property law, you may even be able to speak to previous clients.
5 Star Villa Holidays offers holiday homes for sale in Florida, Turkey, Spain and Cyprus at www.5starvillasales.com or on 0151 494 9145, and rental properties with sister company www.5starvillaholiday.com
Fluctuations in the real estate market caused by the UK’s vote to leave the European Union are likely to be shorter-lived and less severe than many investors fear, according to LaSalle Investment Management’s mid-year Investment Strategy Annual (‘ISA’) 2016.
The correction in real estate pricing is expected to be largely restricted to the next 18 months, and medium-term capital inflows into real estate will only be interrupted, not reversed, the ISA finds. It also suggests that, given the ultra-low interest rate and bond yield environment, UK real estate yields are only expected to increase by 40-50 basis points by the end of 2017, even if the country’s political landscape remains unclear. Meanwhile in Continental European, investors will continue to edge up the risk curve as long as the economic recovery continues largely unaffected, but will have one eye on risk contagion from the UK.
Overall, the ISA suggests that some of the fears currently surrounding the real estate market in the country may be overdone. Other findings include:
-The overall impact of Brexit on the Private Rented Sector (PRS) should be limited given the ongoing undersupply.
-Real estate assets with long, index-linked leases are likely to outperform over the next few years.
-The predicted capital market re-pricing will lead to an opportune time to enter the UK market – particularly for US dollar-denominated and Japanese yen-denominated investors.
Elsewhere in Europe, the headwinds facing London’s financial markets should help support the real estate market in cities such as Frankfurt, Paris, Dublin, and to a lesser extent Amsterdam and Madrid. Even before the impact of Brexit, office demand across Europe was undergoing a strong renaissance in cities with strong trends in Demographics, Technology and Urbanisation.
Globally, the ISA says the lower for longer situation actually boosts core real estate returns in the short-run, even as it dampens the long-run outlook for rental income growth. As a result, real estate values for stabilized assets in major markets outside the UK may continue to increase or hold steady, but the cyclical recovery in fundamentals will be moving much more slowly now. At the same time, cross-border and domestic capital sources in many countries could narrow their range of target investments to focus on these traditional, core themes.
Jacques Gordon, Global Head of Research and Strategy at LaSalle, said: “Across the globe, the fundamentals of supply and demand appear to be well-balanced going into the second half of the year in most of LaSalle’s major markets. Furthermore, turmoil in capital markets might also open higher-yielding buying opportunities from distressed sellers as the implications of the Brexit vote in the UK ripple around the world. Although the UK has been the epi-centre for political and financial tremors since June 24th, the law of unintended consequences suggests that investors should also closely watch for ripple effects in the EU, North America and even all the way to Asia-Pacific.”
Mahdi Mokrane, Head of Research and Strategy for Europe at LaSalle, said: “The UK, and in particular a dynamic London, home to one of the world’s most liquid, transparent, and investor-friendly real estate markets, is likely to reinvent itself outside of the EU, and the overall prospects for the UK outside the EU could well be broadly more positive than what is implied by current market commentators.
“We expect the forecast correction in real estate pricing to be largely restricted to 2016-17 and medium-term capital inflows into real estate will only be interrupted rather than reversed”.
(Source: LaSalle)
