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Six emerging trends in global real estate.


More than 23,000 global real estate executives gathered at MIPIM in March to explore the future of global housing markets. Representatives from 93 countries--including members of the National Apartment Association--came together in Cannes, Frances, for the event, discovering common themes and practices that extend beyond borders.

During one session, Lisette van Doorn--Chief Executive Europe for the Urban Land Institute--spoke on six emerging trends in real estate across three major global regions: North America, Europe and Asia Pacific.

1 Capital flows in real estate continue to be strong, driven by low interest rates. For now, investors see no strong alternatives to real estate for desired yields.

2 Risk and uncertainty in the markets continue to grow. "Everything is expensive everywhere," said panelist Nathalie Palladitcheff, Ivanhoe Cambridge. Investors are taking a cautious and granular approach to deals. The U.S. is ahead in the cycle, experiencing yield compression before markets in Europe and Asia. Currency entry point is playing a larger role in investment decisions.

3 Alternative sectors are becoming more attractive in global markets. Residential is just now becoming a major asset class in Europe. More opportunities are available to invest in specialty areas including retirement communities, logistics facilities for e-commerce distribution, self-storage and mass-worker accommodation.

4 More active asset management is trending for 2016. As entities hold on to their properties for longer periods of time, branding is playing a larger role, as well as maintaining strong partnerships with residents.

5 The digital revolution in real estate is continuing to impact the industry. Integration of technology can be seen with the increased use of Building Management Systems (BMS), which empowers the resident and advocates for health and well-being.

6 Urbanization is still a growing trend in the global market. "Urbanization is happening at different rates in different cities and is strongly driven by new infrastructure and public transportation," said panelist Alison Cooke, Starr International.

Panelist Byron Carlock of PricewaterhouseCoopers said it's worth following where Millennial want to live. Despite price compression in the upper luxury market in New York, the demand for housing in the city is very strong. Significant infrastructure investments are taking place in undeveloped parts of the city that will pave the way for development of completely new neighborhoods.

Overall, the panel shared a positive outlook on the year ahead, agreeing that the cost of capital will remain low for the rest of the year--although negative interest rates are something they haven't seen before. This should encourage investors to continue to seek deals in various global markets.

--Source: MIPIM Spokesperson

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Title Annotation:global insider
Date:Apr 1, 2016
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