Try to ride a market rocket booster of commercial real estate

Posted by Design & Construct on 12-Feb-2018 12:14:58

In real estate

Business buildings have always attracted attention and curiosity.

 

Nature of commercial real estate investment

In its historical development, from terrestrial to multi-story, from simple to complex, whether they had a basic or majestic feel with different levels of equipment, they had a recognizable influence at all times. Simple facades of tall and slim buildings, steel and concrete compositions, shifting texture and the nature of the matrix, energy efficient and green, certified by LEED, BREAM ... is the endless order of the epithets and attributes that depict today's buildings containing business spaces and offices.
Additionally, if inscriptions on roofs or facades indicated that a well-known and serious business system has moved behind the façade or below the roofs, the attention and significance would multiply.

“Foreign investors break commercial real estate records in Germany”, according to analysts at the international brokerage house Tranio.

According to the "shell and core" concept, modern business buildings are designed to offer an almost infinite combination of partitioning between existing pillars to meet the needs of their users. In a single shell that is regularly derived as a multilayer facade, "which cools during summer and warms during winter," space is defined in a way that in a specially defined point on each floor, all the electricity, heating and cooling processes are centred.

Extremely motivated commercial property investors pumped in $74.8 billion during the year of 2015, throughout the market in Germany alone.

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Are we in for another balloon burst?

Modern mortgage systems in the world are characterized by the tendencies of globalization and securitization, social orientation, strengthened regulation by the state, in particular. After the mortgage crisis in the US mortgage market in 2007. There are numerous programs and measures introduced, mainly of state support for lending to individual and all other investors, but as well as significant reforms on the global level are enforced, especially throughout secondary mortgage markets.

Some would argue that the Australian commercial real estate market is largely undervalued, and they can’t be far from the truth. Namely, experts in the field stated that in the next five year period, the profitability indicators of investments in office space from Canberra and Melbourne to the Sydney will range from 7.5% all the way to 10%.

There is a certain level of concern about the increased development of the real estate market. If this trend of growth does not slow down, there is a risk of market collapse and a sharp fall in prices.

“Now, is that a bubble or is it too high? And there it’s very hard to tell.” Yellen Janet, former Head of USA Federal Reserve, said.

 

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Catch the train and pump up those yields

Every day around the world, many congress areas open their doors to MICE planners and organizers of conferences and congresses. Cities around the world invest large sums of money in the construction of appropriate conference centres or their renovation. Recognizing the profitability of hosting and servicing MICE events, the global hotel industry is expanding it`s capacities, while on the other hand, an increment of the congress capacities at universities and similar institutions is also noticeable.

The market of facilities end event centres for meetings, incentives, conferences and exhibitions (MICE) around the world are gaining significant momentum. While well over 1.000.000 people attend events like these in the places like Thailand and Macau, and the events themselves growing in numbers year after year, the construction of this sort of venues also increases.

While the dispersion of deals made in the commercial real estate market has grown, lowering the average to the $46 million per deal, in the same time, almost a record high volume of financial resources invested in the same market peaked at $34.1 billion nationwide.

 

Reference

https://www.commercialrealestate.com.au/news/sydney-and-melbourne-offices-will-be-best-performing-property-investments-over-next-five-years-report/ 
https://www.bloomberg.com/news/articles/2018-02-04/yellen-calls-prices-high-for-stocks-commercial-real-estate