There are fiscal cliffs and there are fiscal cliffs. Some might say that the budget impasse that the United States faces going into the New Year palls against the ongoing euro zone sovereign debt crisis, which is more of a fatal slip off the north face of the Eiger than a mere swan dive off the banks of the Potomac in Washington DC.
When Lehman Bros collapsed back in 2008, a colleague of mine jokingly argued, in mock earnest biblical tones, that after seven fat years the real estate industry should expect seven lean years. Five years into a deleveraging of epic proportions, that prediction doesn’t seem far wrong.
Since property prices peaked across most of Europe in 2007–2008, there has been an increase in co-invested property funds, club deals and joint ventures (JVs). Sufficient data is not yet available to assess whether this co-investment leads to outperformance or not, but as we will discover in this article there are other benefits to investors besides total returns.
Australian and Canadian pension funds, in particular, have been increasing their allocations to real estate and are about to assume a much higher profile on the international property scene.
Asia, the world’s largest continent with 47 countries and approximately 4 billion people, has emerged as a major real estate investment destination. Nonetheless, not every Asian country is suitable for real estate investment. A country of institutional quality should have stable political and social systems, as well as a large or wealthy economy, or an economy with good growth potential.
Now that we are coming to the end of the year and multitudes of economists, strategists, government agencies and people standing on street corners are all offering their predictions on where the economy is heading in 2013, it would be nice if the industry had a Nate Silver to cut through the noise and let us know what is really going to happen.
In Q3 2012, the UK economy managed to pull out of the recession that it had been suffering during the first half of 2012, with GDP growth of 1.0 percent. Although unemployment is relatively high as a result of the recession, Aberdeen itself enjoys fuller employment due to the breadth of industry located there.