"I would be cautious about real estate investments in China. They are still developing new ways to harm us," Philip Levinson, managing partner of Singapore-based real estate investment firm Penmount Partners told the DLA Piper Global Real Estate Conference in Tel Aviv earlier this week.
Levinson added, "It doesn't make any difference what way we go in there, I suggest going in there cautiously and with a very long-term perspective. The law there is unclear. Regulation frequently changes and generally speaking uncertainty prevails in the country on everything regarding foreign investments."
During the fifth annual conference organized by law firm DLA Piper’s Israel Country Group, headed by Advs. Jeremy Lustman, Paul Jayson and Naomi Maryles, discussions were held about the following topics: 'Can Global Real Estate Investors Continue to Deploy Record Amounts of Capital?'; "PropTech - Where Innovation Meets the Traditional"; and 'Global Political Shockwaves - Opportunities and Risks in Turbulent Times'. Senior figures from over 10 countries attended the conference including Germany, Italy, Hong Kong, Singapore, the US, and UK.
Levinson, who currently manages real estate investments worth billions of dollars in Asia said, "Although I didn't foresee Brexit or the rise of Trump, I do understand all matters related to Asia. Australia is a marvelous market and they are now talking about the likelihood of a first recession there for 26 years. When that market starts falling, then we will see very significant opportunities there."
On the subject of India, Levinson said, "It resembles China somewhat there. It is very easy to get burned. On the other hand, in Japan the situation is much more comfortable and the law is clearer."
Alex Foshay, senior managing director of US real estate giant Newmark Grubb Knight Frank (NGKF) spoke about the American real estate market and said that,"43% of the huge deals in New York are conducted by foreigners. 4% of the deals done in the US are done by Israeli investors, which has brought about $2.7 billion into the American real estate market."
Jonathan Landau, CEO of US investors Fortis Property Group, said, "In our opinion, the new geopolitical situation in Europe and the US creates new possibilities for foreign investors. In the short term, I think that this uncertain period will create opportunities for buying properties that generally cost more, or that the sellers will feel more comfortable in taking their time in selling them."
Len O'Donnell, president and CEO of USAA Real Estate Co. added, "We are in a period in which we don't really know in which direction the administration will go with its policies, which at the moment seem most extreme, at least in terms of trade agreements, interest rates and taxes. If Trump does what he says he is going to do, we will see very high inflation and if a trade war develops, we will see a rise in unemployment because that will bring a fall in exports. We are already beginning to see a fall in US government bonds and that shows that interest rates will rise. According to some of the analysts, there is a possibility of a recession in 2018 and that could extend into 2019 or 2020. On the question of how all this affects us? We are already beginning to implement more defensive policies. Not out of concern for another crisis like 2008, but out of caution and due to the uncertainty."
At the start of the conference, that has become a major event for global real estate players, the organizers conducted a poll among the participants, asking them, "In which country would you choose to invest most over the coming 12 months?" Most of the participants said that the countries they would invest in would be the US and UK. Other answers included Germany, Australia, Switzerland and even Afghanistan. Asked if the countries for investment had changed over the past 12 months, 65% of participants said no and the remainder said yes.
Other participants at the conference included US REIT Fund KBS managers Peter McMillan and Keith Hall who raised about NIS 950 million last year on the Tel Aviv Stock Exchange (TASE); Andreas Hardt, manager of the German office of Blackstone; Harbor Group Israel-US real estate company CEO David J. Zwiebel; Mody Kidon, an owner of ALTO Real Estate Funds; CrediFi CEO Ely Razin which just completed a $13 million financing round; and Benjy Singer, Director WeWork Israel and others.
Published by Globes [online], Israel business news - www.globes-online.com - on February 15, 2017
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