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Expect investors to be more cautious about new real estate market |
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Monday, 22 September 2008 |
Given the recent political disturbances in Georgia and the low liquidity of the new real estate market investors are expected to be more cautious where to invest. This is the opinion of Christian Ulbrik, who heads the German office of the consulting company Jones Lang LaSalle (JLL) and by 2009 will become director of the company's Europe, Middle East and Africa.
"I always wonder how much money is investing in developing markets where liquidity is very limited," he says. "Whatever advantage they have in terms of profitability, it is deleted from the liquidity of large, main markets."
In his words the main question that investors should ask is whether new markets including Russia, are sufficiently liquid to enable investors to enter them quickly enough, if you want.
Ulbrik says when asked early signs of problems in the real estate market, it did not expect the crisis to continue for so long. According to him, and 2009 will bring many challenges for the market and there will be hardly any improvement in the next 9-12 months.
Although at the time of the investment market will wave of distressed assets for sale (distressed property) , he believes that their number will increase as it applies to all types of properties.
"I think there will be fewer such projects than some hope. I think we will be witnesses of such portfolio that will enter the market in Germany investors bought too late and financed them too aggressively, "he commented.
He currently markets in Britain and Germany and some other established markets in Europe, offer very good investment opportunities, but the main issue is how to secure acceptable financing without the investor must invest a lot of equity.
"In the medium term I am very optimistic for Turkey," he added. "It developed very well and where, ultimately join the European Union will make it more attractive to investors."
Ulbrik believe that in the near future profitability of the property market in Europe will continue to increase, although this will be a different pace in different markets.
"In some countries, notably Britain, we witnessed a sharp increase compared with others. Markets like the UK will probably be the first to be stabilized. "
He believes that profitability in the UK will be stabilized before that in Germany, where the increase was more slowly.
"London is now starting to look attractive for funds from the German open-because prices have decreased and this will help to stabilize the market," he says. |
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