“Good enterprises in the 21st century must have global and international vision,” Wang (pictured right) wrote in his microblogging update, commenting on the deal.

As Bloomberg reported, the details on the stake purchase were released in a note to clients issued by Jinsong Du, a Hong Kong-based property analyst at Credit Suisse Group AG, who claimed to have had the information from Vanke sources. The project in question will comprise a little under 700 residential units upon completion. No further details were released by any of the two companies.

The San Francisco development acquisition is Vanke’s first deal outside Asia. Shortly before this new venture, the company’s Hong Kong branch jointly won a bid for a site in the city, its first in the market, which is worth HK$3.43 billion ($442 million). The Shenzen-based developer set up international units after absorbing a Hong Kong developer in May 2012, aiming to expand overseas.

The San Francisco project will mainly address buyers in mainland China, Credit Suisse stated, quoting Vanke’s management. The new acquisition didn’t help the developer’s shares, which have reached the lowest value in three weeks. The new investment is currently pending approval from the Chinese government.

The remaining 51.1% stake in the acquired properties is retained by TIAA-CREF who will also manage these assets. The property portfolio totals a rentable space of 1.9 million square feet and is comprised of two New York assets, two located in Washington DC and another one in Boston. The joint venture between NBIM and TIAA-CREF plans on buying more office properties in these three US cities.

“This is the fund’s first real estate investment outside of Europe and is in line with our strategy to build a high-quality, global property portfolio. We are very pleased to team up with a partner that has TIAA-CREF’s knowledge and capabilities, and look forward to jointly developing the venture,” said Karsten Kallevig (upper left), chief investment officer for real estate at NBIM. ”As the world’s largest real estate market, the US will be an important part of the fund’s long-term property portfolio. We will initially seek to invest in key East Coast cities.”

Norway’s sovereign wealth fund, or Pension Fund Global, which NBIM manages, uses government revenues from the country’s oil and gas industry to make its investments and has made its first property investments in 2011, when it targeted office and retail properties in London and Paris. The fund is mandated to hold up to 5% in property assets, while the majority of its investments are focused on equities (60%) fixed income (over 35%).

Source: Wikipedia

Real estate experts forecast increased activity in the German market, as buying property here is one of the safest investments one can make. Berlin is on top of the list of secure real estate investments, while home prices in Germany’s largest cities are on the rise, along with the number of building permits issued and home ownership rates. As the local real estate market becomes more attractive, more foreign investors are trying to get a piece of the action.

In Berlin, Frankfurt and Munich, prices have gone up 10% on average in the first half of 2012, as shown by data from the Deutsche Bank. German central Bundesbank data also showed 9% increases in 2012 for German urban centers, after another 5% spike in 2010. This is quite an interesting trend, given the fact that home prices either declined or stagnated from 2000 through 2009 in the German real estate market.

Yet this growth rate in home prices is not sustainable on the long run, as explained by Steffen Sebastian, the chairman of the University of Regensburg’s Institute for Real Estate Finance. He however believes that Germany will not see the same financial crises that Spanish and Irish markets faced as real estate markets fell to pieces, putting a great strain on the overall economy when homebuyers and banks were devastated by the 2008 economic downturn.

“When we talk about bubbles of course the market in Germany cannot be compared with the U.S. market,” he said. “Usually the other bubbles are driven by excessive use of leverage by borrowing money but in Germany borrowing was always quite heavily regulated and this is not going to change.”

The current trends of the German real estate market are actually a consequence of the European debt crisis. The European Central Bank had to lower its benchmark rate to the record of 0.75% as a way to stimulate economic growth. This measure meant lower consumer borrowing costs across Europe. Germany reported dropping mortgage rates as a result, thus the large number of people taking advantage of the opportunity to finance home purchases. This phenomenon caused the home ownership rate of the country to jump to 53%, 10 points up from 10 years ago. This current trend creates of risk of having borrowing and spending rise too quickly, which would also drive everyday goods prices up.

While at this point Germany’s inflation is still lower than the European average (2% compared to 2.2 %), there is a justifiable fear of hyper-inflation. To counter that possibility, Germans try to protect the value of their savings through real estate acquisitions. In the eventuality of a bubble burst for real estate, the fact that most local buyers are using their savings, as opposed to high-interest loans, they would not stand to lose money they don’t really have.

Other European buyers are also investing in this thriving market. As interest on savings is very low, Italians, Spaniards, French and other Europeans invest in the German housing market. Germany’s rising rents and home prices are some of the traits that make this market a safer place to get a return on real estate investments. According to statistics from one of the largest real estate agents in Berlin, Ziegert Bank and Real Estate Consulting, more than one in six of its clients this year have been from outside Germany. A significant increase from the 2011 ratio of 1 in 10 clients.

 ”London and New York are the only two markets identified as key investment areas by investors from other regions,” the report stated. ”Investors will continue to target these markets through 2013, while monitoring the effects of the U.S. election result and continuing problems in the Eurozone London, Paris and major cities in Germany are among the favorite sites.”

Another global trend is the investor’s preference for the office sector. In what commercial properties are concerned,  industrial sector properties are the most attractive in the US and Latin America, while shopping center investments are increasingly sought after in Australia, Canada, and New Zealand saw increasing interest in shopping center investments.

 ”Major investors are becoming more critical when selecting their investment locations,” said Tony Horrell, CEO, U.K. and Ireland, Colliers International. ”This is supported by the overarching themes we found when asking respondents about their investment strategies. They are more likely to look at home locations first, and when they do look at international opportunities, they are far more specific about the individual markets and sectors in which they are interested.”

Horrell added, “The survey also found that the availability and price of debt finance will remain an issue in a number of territories, particularly in EMEA, as stringent lending requirements endure and LTVs remain low. This is opening the door for new lenders, in the form of insurance companies, and the resurgence in the provision of mezzanine finance.”

While the preference for such safe markets will generate a slow but steady growth in Western markets throughout the next year, it will also lead to a shortage in core investment opportunities as all global investors will fight over the same limited key locations.

The survey also showed that Asian, EMEA and Latin American investors were the most likely to access funds from outside their regions. Asian investors used local funds for only 40% of their investments, with the United States (20%) and Western Europe (19%) providing significant capital. The US also provides a third of funding for investments in Latin America, with Western Europe providing another 15% of the funding. Canadian investors are the most self-reliant, with close to 80% of investment being funded locally.

Most investors prefer to put their money in their local markets, with only 25% making overseas real estate investments. Those who venture overseas favor Western Europe. Asian investors eyeing foreign markets prefer those closer to home, such as Australia and New Zealand.

While still focusing on preserving their wealth and income security as main goals, investors in the US, Asia and Latin America are most likely to start taking greater risks over the next six months. The European and EMEA markets will still struggle with securing debt in 2013, the survey showed, also forecasting increased activity for specialist debt funds that pursue higher returns on their investments. Asian investors are seen as most likely to extend debt, while those in Latin America are the most concerned with avoiding additional debt.

 ”In 2013 we will see more new lenders and mezzanine funds to partially replace the void left by retreating mainstream banks,: Horrell said. ”And more generally, 2013 will be a year of continued recovery, with investment volumes showing modest growth as investors accept the new norm and sentiment improves.”

Henderson representatives said their new acquisition perfectly meets the fund’s criteria for existing, good quality logistic assets in top locations throughout Germany. The logistics fund is the result of a partnership between Henderson’s German property branch and logistic real estate expert Palmira Capital Partner, which took on the roles of adviser during investment process as well as assisting with management. The majority of the fund’s investors are German insurance companies and pension funds, along with one Austrian institutional investor.

After its first closing, the fund remains open to institutional investors, with a target return of 8.5% and a 40% gearing provision.

“The strategy for the Fund involves the acquisition of existing, proven schemes with secured leases already in place,” explained Mathias Leidgeb, partner with Palmira Capital Partners. “This means that the benefit of the low risk associated with newer build assets is retained, but the premium pricing is avoided. In this respect, Bad Dürkheim was an excellent fit with the strong covenant strength of Uniwheels and a long lease already in place.”

Henderson and Palmira will probably announce the addition of new assets to the German fund in the New Year, as they already have three more in due diligence that will soon be completed.

Now that we’ve assembled your team it’s time to put them to work.  The most obvious question to ask now is, what do I have them do?  Well, it depends on what type of investments you choose to make.  There are many different types of real estate investments out there and while you could dive right in and start doing all of them, in my opinion it makes sense to pick the one you feel most comfortable with and start with just that, then expand into other areas as your knowledge grows.

Image by 401(K) 2012 via flickr.com

There are two basic philosophies when it comes to real estate investments.  These are the get rich quick models, and the get rich slow models.    You may be thinking to yourself “why would I ever choose get rich slow over get rich quick?”  Keep in mind there are pros and cons to every type of real estate investment and also different levels of risk.  Many get rich quick models involve fast turnarounds and little margin for error.  This may not be the stress level you want in your life at this time.  All that said here are some basic example of the get rich quick model. I’ll cover get rich slow in the next article.

Get Rich Quick

Fix and Flip 

This is the tried and true method most investors are aware of from either personal experience, television shows or online courses.  The model of this investment is to buy distressed or undervalued homes that require some repairs.  Then fix the property up and sell it at it’s true market value for a profit.  Sounds simple enough in theory, in practice however there are many things that can go wrong.

One of the most common problems with a fix and flip scenario is when the repair costs exceed your budget or expectations and eat into your profit.  One wrong estimation on the cost to update a kitchen and suddenly your great investment has now turned into a deal that you hope you can get out of and still break even.  Another common mistake is over valuating the market and current selling conditions.  You may think this house will be worth $250,000 after you fix it up but does the market data support that number or are you just “going on instinct?”.  This is why you need to leave yourself a large profit margin on a fix and flip because if the market doesn’t support your initial asking price, you need to be able to go lower without losing money.

Tax Deeds

While buying tax deeds themselves are not necessarily a get rich quick scenario, they can be used as such.  When you buy a tax deed you are buying title to a property that was foreclosed on by the county for failure to pay real estate taxes.  Since in almost all jurisdictions, tax liens are superior to any other lien on the property such as a mortgage, buying a tax deed means all other liens on the property have been wiped out and you now have clean title.  If you did your homework then you have purchased this property at significantly below it’s current market value.  So low in fact that you can “wholesale” it to another investor without having to spend a dime repairing it.  There is enough of a profit margin in the property to give you and another investor plenty of room to make money.

The downside to buying tax deeds is when you don’t know what you are buying.  If you buy a tax deed to a worthless piece of property (say an alleyway or landlocked parcel) then there is no market for it and you now are the proud owner of a useless asset.  Buying tax deeds requires a great deal of due diligence to make sure you are getting something you can resell quickly with a big enough profit margin and is a desirable property other investors will want.

The entire reason one retains the services of estate management agencies is to have them take care of the day to day and the extraordinary efficiently and without fussing. The service necessarily ranges from keeping the lawns cut to mending roofs and even dealing with issues such as dealing with disputes over rights of way and public access to foot and bridle paths and planning.

Estate management used to be dependent on experience and common sense and these remain vital to a competent manager. However, with the diversification of the role and the diversification of the type who actually owns a large property or number of properties which all need maintenance and care means that simply knowing what an estate needs as the seasons change is no longer enough.

Today choosing your estate manager not only depends on their background as a hand and their progression to being able to take on an entire estate; today you’ll be looking into their degree in estate management too. Naturally their degree qualifies them to do everything that you’d off handedly expect yet it also qualifies them in some rather more ‘transferable skills’ as well. These might include data analysis, communication skills in the written and oral spheres as well as collating spreadsheets and creating presentations. They have team leadership skills and take time management very seriously. All this and they are able to translate what you want into a workable action plan and then divide the labour down into their team meaning that your vision becomes a reality with the minimum of fuss or inconvenience.

Estate managers today are expected to know the full width and depth of their trade, from the planning process to actually building the walls and putting the roof on, they’ll be adept in agriculture and rural affairs, conservation, investment and valuation as well as forestry and quite conceivably mechanics too. Honestly, if I was stuck on a desert island along with my eight records and the complete works of Shakespeare my luxury would be the modern estate manager!

@DanCash is an estate management specialist living on the south coast of England. Having dealt with real estate agents in the past he decided to take the plunge and start doing it for himself some years ago and has never regretted it.

Planning image courtesy © endostock – Fotolia.com

Half of all real estate investors lose money. Image courtesy of PSPSPS

A recent opinion poll showed that nearly half of all people questioned had suffered losses when it came to their real estate investments, while the other half managed to turn some kind of profit.

Respondents to the new survey by Housing Predictor generally agreed that they aren’t nearly as enthusiastic about real estate investments as they were five years ago, following the burst of the real estate bubble and the beginning of the U.S. foreclosure nightmare that is yet to end.

Real estate investments are not as safe as we thought. Image courtesy of Ikef

Overall, the survey showed that 35% of respondents had made money, compared with 37% who lost money.

Many real estate investors said that they have suffered just as much as homeowners have done as a result of the spectacular market crash.

Housing markets traditionally lead economic recoveries. Image courtesy of Economic Noise

History shows us that the housing market is traditionally the main factor in leading the U.S. economy out of traumatic economic crashes, and with Home Predictor forecasting housing price rises in over a dozen states this year, it is hoped that things will finally get back on track and investors will begin to show the confidence they had five years ago.