Global Housing Markets and REITs
Property Investments Delivering: ING. Australia: “ING Clarion portfolio manager Steve Burton:Benchmarked against international equities and bonds, global REITs had delivered "competitive returns" over five-, 10- and 15-year windows. He added that global REITs were typically paying a higher distribution yield than comparable long-term government bonds… [And] global REITs are also trading at an average 17% below their net asset valuation.” (The Age, Sept. 3)
China Likely To Allow REITs This Year. “Nie Meisheng, president of the China Real Estate Chamber of Commerce: China may introduce property trusts this year, giving developers a much needed new source of funding… [and] easing its tough stance as the property market cools. The move could come as part of a government change of tack to ease tight monetary policies, many of which have been aimed at the property industry… Bank loans to the property sector [now require] higher down payments from homebuyers… The steps hit home sales -- down 50% in Beijing, Shanghai and Shenzhen in July from a year earlier… Prices in some areas of Guangdong province have fallen 25%.” (Business Spectator, Sept. 3)
Morgan Stanley Raising $10 Billion Property Fund, Eyes China. “Sources: Morgan Stanley (MS) is raising $10 billion for a global property fund and plans to put $1.5 billion or more of that into China, shrugging off concern about a property market downturn… The Morgan Stanley Real Estate Fund VII Global, the latest in a series of property investment funds, is expected to begin investing worldwide before the end of this year… It will invest at least 10 billion yuan ($1.46B) in China over the next few years, taking a gradual approach while focusing on the largest cities such as Shanghai, where the price for a luxury downtown apartment can exceed $20 million.” (Reuters, Sept. 3)
Emerging Europe Has Upside. “As economies in Eastern Europe have grown, developers have been building everything from highways, warehouses and factories to high-rise apartment buildings, hotels and shopping centers to meet the demand. Even as its growth slows, the region still outpaces Western Europe. Poland's economy is expected to expand 5% next year, compared with 1.4% growth for the euro zone, according to the Organization for Economic Cooperation and Development… The economic prospects across the region are attracting a number of property investors. Cash-rich German open-ended funds have been on a spending spree, using their strong euros to scoop up deals throughout the region.” (WSJ, Sept. 3)
U.S. Private Equity Firms Seek Bargains in Japanese REIT Market. “Japanese REITs, which have lost more than 50% of their value on the Tokyo Stock Exchange since… last year, are increasingly attracting the attention of U.S.-based private equity firms like Oaktree Capital Management, which has launched the first tender offer for a REIT in Japan. Japan has been hit hard by the global credit crunch, particularly the REIT market, which relies on banks to fund investments. Peter Culliney, director of research at Real Capital Analytics: The price of Japanese REIT shares is cheap now. Calling them “low-hanging fruit,” Culliney said J-REITs are trading at a significant discount.” (Commercial Property News, Sept. 2)
Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below.
Get Seeking Alpha's housing market coverage by email -- it's free and takes only seconds to sign up.