News headlines are sending a mixed message about the state of global property markets. While the fallout from defaults in the U.S. mortgage market seems far from over and to extend well beyond the U.S. borders, there are also pension funds, real estate companies and investors with international reach who are making significant investments in foreign real estate.
Commenting on global property markets, Christopher Voutsinas, Executive Vice President, Global Head of the Global Principal Investment, Oxford Properties Group said, "The US economy, and particularly the US consumer has been a major driver of
global economic growth. Now the outlook is uncertain at best. Recession looms as a potential yet the real estate markets seem surprisingly resilient. Will it Last? "
Voutsinas, who is the Chair of the up and coming Global Property Market to be held in Toronto on November 27th added, "Global is here to stay. Real estate is here to stay. Canadians have the
opportunity to become a major force."
Attending the Global Property Market, Voutsinas said, would benefit Canadian real estate professionals because "Being a global investor requires skills not typically needed domestically –
cultural sensitivities, communication styles, understanding the legal
framework and business norms, macro and geopolitical factors as well as local market
dynamics. Interacting with diverse market participants is the best way
to learn and hence succeed." – Global Property Market Brochure (PDF)
Jacques Gordon, International Director and Global Strategist, LaSalle Investment Management and Simon Fairchild, Director, Global Account Management, Investment Property Databank Limited will provide an overview of how major international markets have performed at the conference.
A panel led by Christopher Lowery, CEO of Global Capital Markets & Principal Activities, Cushman & Wakefield Inc., USA will discuss why Canadians should think more globally.
Global Property Market will feature a group of experts on each of the major real estate markets: the United States, Western Europe, Russia and Eastern Europe, China and Asia Pacific as well as Brazil and Latin America
The challenge and importance of making sense of the rapidly evolving global property market is underlined by the following 'bad news' and 'good news' stories.
First the bad news.
Property broker sees a dive in global real estate investment – Global direct real estate investment could fall this year as concerns about defaults on U.S. mortgages prompt lenders to tighten credit, said Jones Lang LaSalle. Asia may be the only market to experience an increase in investment in the second half of this year.
International Herald Tribune, November 5, 2007
Rippling effects of US subprime crisis in Japan – The knock on effect of the US sub prime mortgage crisis seems to be having an effect on Japan’s housing market. Housing starts have shown steep year-on-year declines each month, with a 23.4 per cent drop in July followed by a 43.3 per cent plunge in August.
Overseas Property Mall, November 6, 2007
Credit troubles derail Qatari bid for J Sainsbury – Delta Two, an investment vehicle backed by the Qatari Investment Authority, a cash-rich state investor from the Persian Gulf emirate, abandoned a months-long effort, valued at $22 billion, to take control of Sainsbury, a signature British retailer.
International Herald Tribune, November 5, 2007
Global property decline – S&P's 10-city index fell by an annualised 5 per cent
while the 20-city composite fell by 4.4 per cent. The figures
represent the worst US property recession for 16 years and could
stretch to become the worst since the Great Depression.
Australian News.com, October 31, 22007
The good news stories are:
Caisse may invest $1.6 billion in Indian real estate by 2012 – Caisse de depot et placement du Quebec, Canada's biggest pension-fund manager, plans to invest in Indian real estate for the first time and may spend up to $1.6 billion there in the next five years.
Toronto Star, November 04, 2007
Optimism in Central America – “Latin America is not subject to the problems in the real estate market in certain other countries,” Julio Fernando Noval Garciá, president of Spanish developer Grupo Mall, told attendees at the FIABCI conference held in Panama City.
International Herald Tribune, November 04, 2007
Emaar Properties Canadian advance – Emaar has set up shop in Vancouver, where it's scouting for opportunities and building a base for what it hopes will be as many as 30 operations across North America within the next decade.
Globe and Mail, October 22, 2007
Asia Property Fund completes deals worth USD$1.4 billion – LaSalle Investment Management announced three new acquisitions in Tokyo, Singapore and Melbourne on behalf of its Asia Property Fund with combined assets totaling USD$1.4 billion.
LaSalle Investment Management, October 23, 2007
These are all recent news stories that reflect the duality of information about global property markets. In addition to issues directly related to the industry there is also the prospect of $100 barrel oil, relentless increases in electricity costs and currency fluctuations.
It raises a flag that the real estate sector, in North America at least, is facing a period of instability that it hasn't seen for a while.
According to Sam Zell, Chairman, Equity International "Brazil, Mexico, Russia, China and India will produce five times as much real estate in the next 10 years as will be created in the United States".
Provided with this advice, it is no wonder that in spite of the evident risks, Canadians are making foreign investments at an unprecedented level.
What is an adviceable global property investment strategy for 2008? What are the opportunities and pit falls?
The up and coming Global Property Market offers Canadian Real Estate professionals the opportunity to learn from the most informed individuals in the world.
Registration cost for the Global Property Market is only $395.00 plus tax including the Chairmen's reception for the Toronto Real Estate Forum. Registration for the Global Property Market is open until November 19th.
Registrants to both the Global Property Market and Toronto Real Estate Forum receive a $50 discount for a combined registration fee of $996.40 + tax.