Property Investment

With the Sub-prime crises and ensuing credit crunch in the US and Europe coupled with the continued high growth amongst the Asian giants, China & India, the property investment outlook is set to be quite interesting in 2008. The emergence of private equity funds into the property investment markets with their huge access to capital will add to the rapidly changing landscape in property investment.

Property investment market sees global shift

Whilst the US and UK property investment markets continue to stumble under the weight of the credit crisis, Asian property investments are set to be the ‘new darling’ of real estate investors globally in 2008 according to Steve Williams, International Consultant for Real Capital Analytics. In the firm’s Global Capital Trends report, it was noted that though Asia still accounted for only 17% of total property investments in the US, Europe and Asia, its share of the property investment market has been growing steadily every quarter of 2007.

Whilst the US and European property investment markets dropped steeply through 2007, Asian property sales climbed to 49 billion dollars at the end of the fourth quarter of 2007. The report notes that Asian property investment sales could even surpass those in the US and Europe in 2008.

Global property investment mega deals

One of the most significant trends in property investment globally has been the entry of giant private equity funds financing massive deals such as the 39 billion dollar purchase of Equity Office Properties by the Blackstone Group. This transaction has been billed as the single largest property investment deal in history.

In another large property investment deal, the high end hotel chain The Four Seasons, sold out to a consortium that included such diverse entities such as Microsoft king pin Bill Gates and a Saudi Arabian prince.

PricewaterhouseCoopers anticipates that these property investment deals are just the ‘tip of the iceberg’ of what is to come in the near future.