How is the Asian real estate market going nowadays? Have you overcome or get used to these new reality after coronavirus?
As We all know that the pandemic gives big negative impacts to all aspects of our life, no exception to real estate sector on the world. The negative impact of the Covid-19 outbreak on the labor market, the retail sector, and consumer demand is hurting the real estate market. Asia market has dropped by 30 percent on average, the worst hit is on retail, office and hotel sub sectors, as residential still can survive due to the big backlog/shortfall numbers in some Asian countries with significant populations such as Indonesia, Philippines and Vietnam. Logistics/Warehouse become primadona choice of investments since the pandemic outbreak started.
Real estate sector has to adapt itself on how to coexist with this pandemic since real estate is still one of the favorite investment portfolios , referring to some surveys held by some real estate institutes recently in the region. Real Estate investment ranked number after gold investment. One of the key drivers to survive is to go the digital way, from marketing, administration until transaction process , from marketing portal, Artificial Intelligence, Internet of Things, Drone, Virtual Reality, Augmented Reality until Robotics development. All real estate stakeholders should adapt and implement this digital way to keep them still can deal with their clients, even they are in lockdown situation. It’s proven that during the pandemic, the property developers are still selling their products and property agents still making money when the restrictions policy still applied in Asia, Europe and US.
What do you think about the present and future of international real estate business?
For a long time real estate has been considered one of the best long-term investments to protect against inflation. Unlike many other traditional investment products, real estate is not tied to the stock market, making it an efficient instrument to reduce risk and increase long-term returns.
One of the advantages of real estate is appreciation. In 1940, the median home value in the US was just $2,938. In 1980, it was $47,200, and by 2000, it had risen to $119,600. In the UK, the price of an average house went from around £51,800 in today’s terms back in 1952 to around £211,400 ($274,900) in 2017.
On the other hand, by renting an apartment, smart investors can cover a major part of monthly expenses, including mortgage, interest, taxes, and insurance. Those people who can’t afford to buy a house could invest in real estate investment trusts (REITs), companies that own and collect rent from commercial and residential properties.
That is why I am always standing on the optimistic side, some people still want to wait and see but for some people, mostly from global corporate, global finance institution , family offices and pension funds ( both sovereign and private), this is the right time to buy good class assets with interesting prices.
I have been approached by some multi family offices, global finance institution and pension funds, from Asia, Middle East and US for advising them on securing good hotel. office tower and retail mall in Europe , US and some Asia Countries.
What are the new challenges and opportunities of real estate after coronavirus?
The new challenges are how to adapt with technology in doing business, reposition your segment of the market and blend it into creative ways ( especially in design and functional aspects) on dealing with your clients . On the other hand, property technology is the sector that attracts most investors to invest beside other property financial instrument such as REIT and Bonds.
Talking about opportunities, in these hard times, property profesional like us are mostly needed in today’s market. Our expertise, value and experiences will gain more value in the world property market.
I see five aspects to focus on to identify opportunities post-COVID-19 outbreak:
1. Real estate fundamentals
2. Recovery curve
3. Capital deployment
4. Capital structure
5 .Market forecast
Does FIABCI have a leading role in this new reality?
Founded in 1951 in Paris, FIABCI is a worldwide business networking organization for all professionals associated with the real estate industry. FIABCI has provided access and opportunities for real estate professionals interested in gaining knowledge, sharing information and conducting international business with each other.
During pandemic situation, when business people are not allowed to travel, when the market prices are volatile but there are still certain category of investors keen to buy good assets with good priceing, they need world wide network. FIABCI has it all, our global networks present in 72 countries comprise of more 40 various professional skills in real estate industry.
At today situation, I am proud to say that FIABCI is only international organization which has this kind of benefits, and the perfect part is we have been working closely with UN Habitat and UN ECOSOC on housing policy issues.
What is your duty towards FIABCI?
The main mission of FIABCI is to be the main voice of the world real estate industry, representing the common interests of world’s real estate stakeholders especially during these hard times, we have to keep promoting the real estate sector as one of the best investments in the portfolio. We keep holding a lot of world wide activities such as Webinar in all regions, survey and collaborate with UN Habitat in the special events such as World Urban Forum and World Habitat Day.
Is the Asian buyer still interested in overseas real estate markets? And how about the Spanish?
Asian is one of the potential markets for overseas investment, the main reason is the habit and characteristics of Asian, they used to buy property as their investment portfolio beside gold and for the last 10 years we can see significant numbers of Asian investments in overseas countries, especially in the US and Europe.
There are 2 main reasons, to hedge their money against inflation, looking for asset depreciation and for their on stay ( for their children who are students, their second home or for their migration purpose, especially from the country which faces political turmoil)
Spanish market is one of the favorite spots for investments, one of the most visited countries in the world, with almost 84 millions visitors in 2019 ,with charming welcome culture, world class culinary, green environment, fair law system, and world class education and health facilities. These are the most attractive sectors for Asian investors.
What do you think of Barcelona as a place to move or to have a second residence and get the Golden Visa?
Golden visa is the one of most benefits for Asian investors, making them more flexible to travel back and forth anytime from their origin countries.
Spain Government has to be consistent on this policy, this will bring more confidence to the international investors
Is Golden Visa still attractive for non-European investors? Do they know about this Golden visa?
Yes, it’s still very attractive as a pull factor, but surprisingly it was not promoted world wide. A lot of Asian investors are still not aware of this visa facility. Spain Government has to hold loud campaigns and promotions in world wide