Preparing for the future - global investment trends
International property and real estate show, MIPIM, is just around the corner and one of this year’s hot topics is preparing for the future. Gleeds director and MIPIM delegate, Manu Hunjan, discusses global trends in the construction and property industry, and how to make the most of your investment.
A changing global economy
For better or worse, the 2008 financial crash changed the world economy. Traditionally, project funding in the construction and property industry was secured by local banks. In more recent years, funding has also come from China and the Middle East - together they made a substantial contribution to keeping the world economy afloat during the darkest years of the recession.
With the price of oil dropping, the Middle East is becoming more conservative with its finances and the Asia Pacific region is becoming increasingly unstable. In their place we are starting to see new players emerging from South America, South Africa and Canadian Pension Funds.
Where is all the money going?
Clients seeking high returns are looking to invest in speculative and large developments. Europe is a safe haven for this type of project thanks to the abundance of opportunities available. The continent offers an educated and willing labour force, and has comparatively cheaper start-up costs than many other developed parts of the world. As we see the first signs of confidence return to the market, these are two very important factors that can’t and won’t be overlooked.
We are seeing significant growth in sectors that weren’t traditionally viewed as ‘smart investments’, if indeed at all. In particular: leisure, logistics and my personal favourite, retirement homes.
Our ageing global population is creating a new niche market. This cultural shift is resulting in more retirement homes and villages being built in Europe than ever before. Developments like this require a high number of investors, who will undoubtedly receive high yielding returns. Not surprising when you take into account life expectancy increasing at an unprecedented rate, and research suggesting that a 70% of wealth is owned by pensioners.