Real Estate
7 things we learnt from the first Property Report Congress
Important lessons from Southeast Asia’s industry experts The Leaders Forum, featuring Real Estate Personality of the Year winners, with Liam Aran Barnes, Property Report’s editor-in-chief One week has passed since Southeast Asia’s top real estate leaders met at the inaugural Property Report Congress 2015, a high level forum to discuss the progress of the region’s dynamic real estate markets. The historic event held at the Shangri-La Hotel in Singapore was organised by Ensign Media, the company behind the prestigious Asia Property Awards programme, welcoming participants and expert panellists from Myanmar, the Philippines, Vietnam, Malaysia, Indonesia, Thailand and Singapore. Here are seven things that we’ve learned from the conference, which has garnered positive feedback from industry leaders and professionals in ASEAN: 1—Governments have a lot to do with the advancement of the green movement. According to keynote speaker Mark L. Clifford, executive director of Asia Business Council, the green building movement can move forward with the help of government policies. He cited several sustainable developments around the world, such as the popular Empire State Building in New York City and the Zero Energy Building in Singapore, as examples. “Every society is going to have a different approach in green building and sustainability, but overall ‘going green’ is now a marketing tool – it is a way of creating awareness amongst Asian and global consumers,” he said, noting that among the Asian countries, Singapore is ahead than bigger economies like Japan and China, due to its high standards and government-led green certification initiatives. “But China’s a real wildcard because in the last couple of years, particularly under the new administration of Xi Jinping, we’ve seen a lot more talk and action on climate change issues,” Clifford added. “There’s a lot of talk in terms of building codes, energy efficiency regulations, and the only question is: how much of this is enforced?” The renowned green tech author reiterated that despite certain roadblocks, green building ultimately provides higher capital values, higher rental yields, and better tenant mix, which proves that green can be profitable. 2—The only way for Singapore to go is back up. It’s been quite known in the last several quarters that Singapore’s real estate market is experiencing a lacklustre year, but that’s primarily due to the country’s own cooling policies. “One of the reasons why our forecast for Singapore is a little bit gloomy is a confluence of factors in the Singaporean (high-end) market. There’s a lot of supply coming in,” said Nicholas Holt, Asia Pacific head of research at Knight Frank. He explained that the oversupply, especially in the high-end residential market, would bottom out in the coming year. Singapore would then come back up as the “market has been through the pain, essentially” and as it reaps from the benefits of being the hub of the forthcoming ASEAN Economic Community (AEC). “Singapore is still a very attractive destination, for both high-net-worth Singaporeans and the international buyers. It’s a very transparent market; for Indonesians and Malaysian, they’ve always bought here. So we don’t feel it will have much impact on pricing after 2016, when we feel the market will bottom out,” Holt noted. 3—Vietnam is hot. Really hot. Expert panelists were asked throughout the Property Report Congress on the choice top markets for next year. Based on their predictions, Vietnam is the runaway winner in 2016, with eight panelists voting for the ‘comeback kid’ of the industry, double the votes for the Philippines and Indonesia, which tied for the runner-up position. “We are seeing a lot of confidence on the market, not just from the buyers but also from the Vietnamese developers. We’re seeing a lot of launches coming up, even mega-projects coming up; some projects are 10,000 units,” said Rudolf Hever, executive director, Alternaty Real Estate (Vietnam). Hever then asked if the Vietnamese market should start worrying about oversupply? “I think it’s still in the early days.” The only thing that developers and investors in the country right now should look out for is the potential impact of the reformed Law on Residential Housing in the coming year. Keynote speaker Holt, who was excluded from the survey, described Vietnam as “one of the bright spots in the region” in 2016, in terms of economic progress, GDP growth and real estate outlook. 4—The office market is in. In the Philippines, the panelists unanimously agreed that the country’s 2016 market performance would generally be the same. The office segment will continue its robust performance, as the country’s business process outsourcing and information technology sectors gain more momentum. The hot office sector in the Philippines has also impacted the strong retail segment, which subsequently impacts the mid- to high-end residential segments, where Overseas Foreign Workers (OFWs) have a high demand for condominiums, and the increasingly becoming popular branded residences. Premium and Grade-A office developer The Net Group’s executive vice-president, Ramon Fernando D. Rufino, disclosed that construction costs have gone up due to the bullish market growth. “Contractors actually turn developers down because they can no longer handle the workload. There are times that they also do not bid on projects anymore.” Elsewhere in the region, some developers are even tapping into the Grade-B office segment. Trinh Bao Quoc, CEO of SonKim Land, said that in Ho Chi Minh City (HCMC), there is a growing market for Grabe-B office space. There is also an abundance of office supply, but vacancy rate is still quite low at less than 3 percent. In Hanoi, there is a demand to build more Grade-A offices as the entire market witnesses a revival. 5—China’s economic slowdown will definitely have an impact on ASEAN. Or maybe not. It really depends on who was asked. Some local experts, like those in Vietnam, agreed that the economic downturn of the Chinese Mainland could have some side effects on their domestic market. Boon Kuah Chia, the recently retired CEO of GuocoLand, said the Mainland is a major partner of Singapore, and so the “China is a major importer in Myanmar,” said Chinese investor Dr. Stephen Suen, chairman and founder of Marga Global, which has been bullish on the Burmese market. “But I think the impact of the China slowdown would be short-term only.” Panelists in the Philippines didn’t think that the China slump would not have negative effects on the market. Rather, the situation has allowed the Philippine construction companies and developers to import lower-priced building materials made in China, which could help in bringing down the escalating construction costs. Experts in Thailand all said that Chinese investors were looking to spend their money outside the Mainland, and Thailand would benefit from that as the number of Chinese tourists continue to rise, and China looks set to overshadow the highly active Japanese and Russian demographics. Clayton Wade, managing director of Premier Real Estate, noted that there was an oversupply in a number of areas in Kingdom, but “we very glad that we see an emerging market with the Chinese, who will very likely to pick up the slack.” He also cited the USD48 billion worth of investments made by the Chinese in the United Kingdom, which implied that China’s slowdown wouldn’t act as a hurdle for their outbound activities. Participants continue their discussions during the networking breaks 6—Infrastructure can make a difference. Property experts in Indonesia look forward to a generally better 2016, after having witnessed a roadblock in the local markets following a very strong last couple of years that ended with the election of a new administration. Candra Ciputra, CEO of Ciputra Group, said that with infrastructure projects in the pipeline and possible reforms in the real estate sector, such as ownership rules, Indonesia would bounce back. Khalil Adis, founder, Khalil Adis Consultancy Pte Ltd, echoed the same sentiment. He said the opening of the Indonesian sector, could very well reinforce the hot markets of Jakarta, Bali and Bintam. Harry Gunawan, president director of Kencana Graha Global, added that the national tax amnesty next year would further compel investors to support the Indonesian markets. 7—Southeast Asia will not become a ‘Walking Dead’ region in 2016. There are a lot of things to look out for in Southeast Asian markets in 2016, as summarised by Knight Frank’s Holt, that will make the entire region a very dynamic destination for real estate investors. In Indonesia, the debate on the luxury and super luxury tax, and discussions to allow foreign buyers to purchase condominiums, will continue, while in Singapore, stamp duties would be the talk of the industry. Malaysia will see the effects of the Goods and Services Tax (GST), as well as the Budget approval that could have an impact on the progress of their currently flat domestic property sector. For Thailand, the government stimulus in the sector could jumpstart the local market, while for Vietnam, the impact on Law on Residential Housing may start to manifest after one year of being implement. Holt also noted that the Philippines would continue to perform well next year. Cambodia’s relatively open emerging market is still small and undersupplied with lots of speculators, but there would be demand from investors in Singapore, Hong Kong and Taiwan. What do you remember the most from the Property Report Congress 2015? Tell us about it!
Important lessons from Southeast Asia’s industry experts
One week has passed since Southeast Asia’s top real estate leaders met at the inaugural Property Report Congress 2015, a high level forum to discuss the progress of the region’s dynamic real estate markets. The historic event held at the Shangri-La Hotel in Singapore was organised by Ensign Media, the company behind the prestigious Asia Property Awards programme, welcoming participants and expert panellists from Myanmar, the Philippines, Vietnam, Malaysia, Indonesia, Thailand and Singapore.
Here are seven things that we’ve learned from the conference, which has garnered positive feedback from industry leaders and professionals in ASEAN:
1—Governments have a lot to do with the advancement of the green movement.
According to keynote speaker Mark L. Clifford, executive director of Asia Business Council, the green building movement can move forward with the help of government policies. He cited several sustainable developments around the world, such as the popular Empire State Building in New York City and the Zero Energy Building in Singapore, as examples.
“Every society is going to have a different approach in green building and sustainability, but overall ‘going green’ is now a marketing tool – it is a way of creating awareness amongst Asian and global consumers,” he said, noting that among the Asian countries, Singapore is ahead than bigger economies like Japan and China, due to its high standards and government-led green certification initiatives.
“But China’s a real wildcard because in the last couple of years, particularly under the new administration of Xi Jinping, we’ve seen a lot more talk and action on climate change issues,” Clifford added. “There’s a lot of talk in terms of building codes, energy efficiency regulations, and the only question is: how much of this is enforced?”
The renowned green tech author reiterated that despite certain roadblocks, green building ultimately provides higher capital values, higher rental yields, and better tenant mix, which proves that green can be profitable.
2—The only way for Singapore to go is back up.
It’s been quite known in the last several quarters that Singapore’s real estate market is experiencing a lacklustre year, but that’s primarily due to the country’s own cooling policies.
“One of the reasons why our forecast for Singapore is a little bit gloomy is a confluence of factors in the Singaporean (high-end) market. There’s a lot of supply coming in,” said Nicholas Holt, Asia Pacific head of research at Knight Frank.
He explained that the oversupply, especially in the high-end residential market, would bottom out in the coming year. Singapore would then come back up as the “market has been through the pain, essentially” and as it reaps from the benefits of being the hub of the forthcoming ASEAN Economic Community (AEC).
“Singapore is still a very attractive destination, for both high-net-worth Singaporeans and the international buyers. It’s a very transparent market; for Indonesians and Malaysian, they’ve always bought here. So we don’t feel it will have much impact on pricing after 2016, when we feel the market will bottom out,” Holt noted.
3—Vietnam is hot. Really hot.
Expert panelists were asked throughout the Property Report Congress on the choice top markets for next year. Based on their predictions, Vietnam is the runaway winner in 2016, with eight panelists voting for the ‘comeback kid’ of the industry, double the votes for the Philippines and Indonesia, which tied for the runner-up position.
“We are seeing a lot of confidence on the market, not just from the buyers but also from the Vietnamese developers. We’re seeing a lot of launches coming up, even mega-projects coming up; some projects are 10,000 units,” said Rudolf Hever, executive director, Alternaty Real Estate (Vietnam).
Hever then asked if the Vietnamese market should start worrying about oversupply? “I think it’s still in the early days.” The only thing that developers and investors in the country right now should look out for is the potential impact of the reformed Law on Residential Housing in the coming year.
Keynote speaker Holt, who was excluded from the survey, described Vietnam as “one of the bright spots in the region” in 2016, in terms of economic progress, GDP growth and real estate outlook.
4—The office market is in.
In the Philippines, the panelists unanimously agreed that the country’s 2016 market performance would generally be the same. The office segment will continue its robust performance, as the country’s business process outsourcing and information technology sectors gain more momentum.
The hot office sector in the Philippines has also impacted the strong retail segment, which subsequently impacts the mid- to high-end residential segments, where Overseas Foreign Workers (OFWs) have a high demand for condominiums, and the increasingly becoming popular branded residences.
Premium and Grade-A office developer The Net Group’s executive vice-president, Ramon Fernando D. Rufino, disclosed that construction costs have gone up due to the bullish market growth. “Contractors actually turn developers down because they can no longer handle the workload. There are times that they also do not bid on projects anymore.”
Elsewhere in the region, some developers are even tapping into the Grade-B office segment. Trinh Bao Quoc, CEO of SonKim Land, said that in Ho Chi Minh City (HCMC), there is a growing market for Grabe-B office space. There is also an abundance of office supply, but vacancy rate is still quite low at less than 3 percent. In Hanoi, there is a demand to build more Grade-A offices as the entire market witnesses a revival.
5—China’s economic slowdown will definitely have an impact on ASEAN. Or maybe not.
It really depends on who was asked. Some local experts, like those in Vietnam, agreed that the economic downturn of the Chinese Mainland could have some side effects on their domestic market. Boon Kuah Chia, the recently retired CEO of GuocoLand, said the Mainland is a major partner of Singapore, and so the
“China is a major importer in Myanmar,” said Chinese investor Dr. Stephen Suen, chairman and founder of Marga Global, which has been bullish on the Burmese market. “But I think the impact of the China slowdown would be short-term only.”
Panelists in the Philippines didn’t think that the China slump would not have negative effects on the market. Rather, the situation has allowed the Philippine construction companies and developers to import lower-priced building materials made in China, which could help in bringing down the escalating construction costs.
Experts in Thailand all said that Chinese investors were looking to spend their money outside the Mainland, and Thailand would benefit from that as the number of Chinese tourists continue to rise, and China looks set to overshadow the highly active Japanese and Russian demographics.
Clayton Wade, managing director of Premier Real Estate, noted that there was an oversupply in a number of areas in Kingdom, but “we very glad that we see an emerging market with the Chinese, who will very likely to pick up the slack.” He also cited the USD48 billion worth of investments made by the Chinese in the United Kingdom, which implied that China’s slowdown wouldn’t act as a hurdle for their outbound activities.
6—Infrastructure can make a difference.
Property experts in Indonesia look forward to a generally better 2016, after having witnessed a roadblock in the local markets following a very strong last couple of years that ended with the election of a new administration. Candra Ciputra, CEO of Ciputra Group, said that with infrastructure projects in the pipeline and possible reforms in the real estate sector, such as ownership rules, Indonesia would bounce back.
Khalil Adis, founder, Khalil Adis Consultancy Pte Ltd, echoed the same sentiment. He said the opening of the Indonesian sector, could very well reinforce the hot markets of Jakarta, Bali and Bintam. Harry Gunawan, president director of Kencana Graha Global, added that the national tax amnesty next year would further compel investors to support the Indonesian markets.
7—Southeast Asia will not become a ‘Walking Dead’ region in 2016.
There are a lot of things to look out for in Southeast Asian markets in 2016, as summarised by Knight Frank’s Holt, that will make the entire region a very dynamic destination for real estate investors.
In Indonesia, the debate on the luxury and super luxury tax, and discussions to allow foreign buyers to purchase condominiums, will continue, while in Singapore, stamp duties would be the talk of the industry.
Malaysia will see the effects of the Goods and Services Tax (GST), as well as the Budget approval that could have an impact on the progress of their currently flat domestic property sector.
For Thailand, the government stimulus in the sector could jumpstart the local market, while for Vietnam, the impact on Law on Residential Housing may start to manifest after one year of being implement.
Holt also noted that the Philippines would continue to perform well next year. Cambodia’s relatively open emerging market is still small and undersupplied with lots of speculators, but there would be demand from investors in Singapore, Hong Kong and Taiwan.
What do you remember the most from the Property Report Congress 2015? Tell us about it!
The rest is here:
7 things we learnt from the first Property Report Congress
Real Estate
Miami – A Great Place to Buy Real Estate
Miami has evolved into a cosmopolitan wonder city under the sun. Famous for its great beaches, this city has also earned a reputation of being a sexy, marvelous and trendy place to live. From amazing golf courses like the one at Crandon Park in Key Biscayne to the Miami Metro Zoo, this beautiful city has something to offer to everyone. Owning a piece of paradise is a dream within reach of locals and foreigners as well. People from all parts of the world have already taken advantage of the great opportunities available today in the marketplace.
Miami has some of the most amazing real estate developments like the astonishing Santa Maria located in Brickell, or the unbelievable towers of Icon Brickell. Some other exclusive and impressive Miami condos include, the Jade at Brickell, the 900 Biscayne in downtown Miami, the fabulous Trump Palace in Sunny Isles Beach and the astonishing Icon South Beach just to name a few. These modern Miami luxury condos have all the comforts and amenities only found in five star hotels.
The city of Miami has it all, great golf, amazing beaches, a turquoise beautiful ocean, a warm weather, excellent shopping, an electrifying night life, lots concerts, entertainment and sports events at the famous America Airlines Arena in downtown Miami.
Miami real estate buyers are as diverse as the city culture and population itself. Buyers come from all over the globe, Europeans, Latin Americans, and Asians and of course buyers from all around the United States. Some have chosen this beautiful city to have a second home and some have fallen in love so much that they now call Miami their home making it an exciting melting pot to live in.
Real Estate
Real Estate Investor's Secret Weapon
Real Estate Investors have a unique tool in their arsenal that other types of investors do not. One of the oldest tax code sections is 1031. This secret weapon is called a 1031 exchange. It is one of the few areas of the tax code where the US Government allows taxpayers to sell an asset and not immediately pay the taxes. Even State taxes are deferred. The way a 1031 Exchange works is simple. If you sell piece (s) of investment property, and you are want to buy of another piece (s) of investment real estate of equal value, you can defer indefinitely all taxes (capital gains (15%), recapture tax (25% ) and state income tax). This is the benefit: by not having to pay those taxes, you can keep your money (instead of giving it to Uncle Sam) and smartly reinvest it for yourself to grow your real estate portfolio. 1031 is a free financial tool that let you keep 15-30% of taxes you would have had to pay. In the world of increasing taxes, 1031 is a viable alternative.
There are some guidelines that need to be followed, and I will break them down. First, what is investment real estate? Investment real estate is defined as property used in a trade or business. It could be used to run your office or it could be rental property. One of the nice flexible features of 1031 is that all real estate is exchangeable. This means that a home can be exchanged for a condo or a piece of land can be exchanged for a commercial property. I use the rule of thumb that any property with a deed can be exchanged for another property with a deed. The other nice feature is that you can sell one property and purchase more than one replacement property or vice versa.
There are three main rules that investors need to know about 1031 exchanges. First of all, you must use a Qualified Intermediary (an Independent Middleman) to help facilitate your 1031 exchange. The QI, as they are called will do many things including prepare the Exchange Agreement, Escrow your 1031 proceeds, and most importantly make the exchange go smoothly. The QI must be hired prior to the closing of the relinquished property. Secondly, the Exchangor (the person doing the exchange) has 45 days from the closing date of the relinquished property to identify the replacement property. Identification means to list (not go under contract) up to 3 properties of any value and send them to the QI. Finally, the Exchangor has 180 days (from the date closing on the relinquished property), to close on one of those three identified replacement properties.
I don't want to over simplify 1031. Please consult your tax advisor in addition to your Qualified Intermediary to analyze your exchange and to be sure you are making the best tax decision. I do believe the rule of thumb should be if you want to keep your money invested in real estate, then 1031 is a tool you must consider.
1031 can be a potent weapon for the smart real estate investor. There is nothing worse than having a client not consider 1031 or not have their real estate professional tell them about it and the relinquished real estate closes and the client changes their mind. After the relinquished property closes, it is too late to do an exchange. 1031 is an efficient tool for an investor to build their portfolio. Plan your transactions and watch your real estate fortune grow.
Dave Owens, CPA, CES is the managing Member of Entrust 1031 Exchange. Dave and his staff have successfully performed over 10,000 exchanges since 1997. Entrust has an arsenal of tax free strategies. Feel free to contact Dave for more information or questions at 239-333-1031 or owens66@entrustfreedom.com .
Source by Dave Owens
Real Estate
How to Become a Successful Real Estate Developer
Real estate investment and development has never been a more popular pastime or career changing challenge; if you would like to learn seven secrets for consistently successful real estate investing through development or you would like to know how you can continue to profit from property even if the market takes a downward turn just read on …
1) Do Your Location Homework – did you know that through successful and sustained location research professional property investors actually continue to profit during a market down turn? It's true – whatever the market conditions you can apply their location research approach to your real estate investments and also make consistent profits from property.
Take the necessary time to learn all about a town or city you're considering for your next property development purchase and discover where the up and coming areas of that town are likely to be. If there are inner-city redevelopment projects planned examine the real estate market in the immediate vicinity, if there are areas that are booming right now examine the immediate neighboring areas for their potential for future prices arises for example.
Do not follow the crowd – have the confidence to buck the trend and get ahead of the curve by positioning yourself in a market that is about to boom rather than one in that has already blossomed.
2) Know What You Can Afford – While it can pay to sometimes speculate never be tempted to jeopardize your own home. Work out your finances and be ruthlessly strict about what you can and can not afford as a down payment, for mortgage costs and for the renovation and redevelopment of your next real estate investment. Only proceed within the confines of your tightly allocated budget and do not be tempted to over extend yourself specifically if competition in the property market is tough and the market is slow or stagnant.
3) Identify Your Target Market – Having identified your next location for property investment identify the types of people who buy into renovated assets in that location. Know who your target market are going to be and what they are likely to look for in a property in that location. If for example you're examining inner-city spaces you might identify that your buyers will be young single professionals and that the ideal property type for these people will be luxury low maintenance apartments – seek out suitable properties with the potential for redevelopment into luxury low maintenance apartments and you will fulfill your target market's brief … seek out large homes with substantive gardens in the area and you will have totally missed the market and potentially created a property that will not sell!
4) Renovation Not Rebuild – Know your budget limits and your personal skill restrictions. Do not consider taking on a property that is in need of a complete structural overhaul when your budget is tight or you do not personally have the time, skills or inclining to do the structural work yourself. Be realistic about what you and your budget can achieve and seek properties that fulfil that brief. Pay to have an independent and complete survey done on any property you are seriously considering buying before making a down payment to ensure that there are no hidden surprises waiting for you benefit the floorboards to eat up your budget in its entity.
5) Manage Your Budget – With your survey in hand you can approach builders for statements and seek out prices for fixtures, fittings, finishes and furnishings. Take the prices quoted and sourced and build your budget. Factor in overwriting mortgage and service costs and labor costs as well as your findings and structure and allocate your money accordingly. Watch every single spend and be ruthlessly strict with yourself and your builder. If at all possible have your builder commit to a contract with fixed finish dates and fees and stay on top of every single penny or cent every single day. At the end of each week tally up your outgoings and expenditure and ensure you're not exceeding your budget. If you're overspending rein it in or you will have to shave it off other areas of the development. Remember never to scrimp and save on finishing touches and always give yourself a realistic fall back fund in case of emergencies.
6) Appeal To The Widest Market – Forget putting your personal stamp on any property you develop – you are not going to be living in the property! You should already have identified your target market which will give you a good idea of the level and quality of finish expected, now meet those expectations without adding your own personal taste into the equation. By appealing to the widest market or the lowest common denominator your property will be attractive to the majority of buyers making it faster and easier to sell on and profit from.
7) Make Friends With A Real Estate Agent – Your greatest ally when developing property will be your real estate agent. Make friends with these guys and you will build a beautiful and successful symbiotic relationship in which you both profit to the maximum! Real estate agents are a fountain of untapped knowledge about the local market, who is looking for what property in which area, which additional features cost little to add but which push up the asking price and what a buyer expects from your particular property type. Get the facts from your real estate agent and then apply their advice. You will create a property they can market for top dollar and to the widest market – you will make more profit and they will make a larger commission including a beautiful and lasting friendship!
Finally, remember that when you've bought, renovated and sold on you'll be looking for that next property opportunity and any real estate agent who you've worked with well will be on the hunt for suitable real estate for your next investment making any identical purchases that much easier to source.
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