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| Expo Real: Focus on the residential investment market  Residential property is a firm component in the commercial property investment market – and not just since the large portfolio transactions when local housing authorities sold off their stocks to private investors. During the crisis in particular this type of property became a popular investment. Again this year, Expo Real explores the trend towards residential property investment in its conference programme – in the "Residential Dialogue" taking place on Wednesday, 6 October.The housing segment has from time to time dropped out of the spotlight – because other forms of investment offered higher returns – but since 2009 interest in residential investment has been rising, particularly among institutional investors and investors with a longer time horizon. Residential property offers a relatively balanced relationship between risk and return, and generates a comparatively stable cash flow. As well as fund companies, long-term investors like pension funds and insurance companies are now increasingly eyeing this segment of the market. When investing in residential property and managing large portfolios, there are certain special aspects to take into account. According to Wolfgang Schnurr, Chairman of DKB Immobilien AG and a participant in the Expo Real Residential Dialogue, housing companies have become considerably more professional in their operations in recent years. Nevertheless he urges them to "concentrate more strongly on the core competences of housing companies, one of which is to have as close a contact as possible to the tenants." The tenant here – as with all types of property – is the customer, and he has a significant effect on the success or failure of an investment. If tenants are to be attracted and retained as customers – a factor which enhances the value of an investment – then the property has to be properly maintained and adapted to the changing requirements of modern housing. In some cases it may have to be replaced by a new building. Here Wolfgang Schnurr urges "more quality for less money", stating that a precondition for this is "that a housing company conducts its business in a very cost-effective way." The long-term success of a residential investment is also determined by the demand at the location in question. Because the housing market, too, operates on the principle of supply and demand. Already there are some locations where unused housing is being converted for other purposes or demolished. But how can investors predict demand? Expo Real participant Dr Marcus Cieleback, Head of Research at Patrizia Immobilien AG, admits that although "long-term developments on the housing market can be predicted with some certainty on the basis of demographic trends, in the short term the interaction between the capital market and the housing market can lead to irrational movements that are very hard to anticipate." One demographic trend which will impact on future housing needs and type of housing required, is the increasingly aged population. This is a development that is happening in all industrialised countries. As a result attention is focusing on apartments that are adapted to meet the needs of the elderly. A second trend is the internal movements of population within a country – some locations are experiencing an inflow of people, others an outflow. Nevertheless investors would be unwise to focus only on those areas that are currently booming. As long as individual housing markets do not fall below a certain size, housing companies can indeed be successful in these supposedly shrinking markets through good tenant marketing. Expo Real, the 13th International Trade Fair for Commercial Property and Investment, is being held at the New Munich Trade Fair Centre from 4 to 6 October 2010. It is a key networking event for interdisciplinary and international projects, investment and finance. It caters to the full spectrum of the property sector, offering an international networking platform for markets spanning from Europe, Russia and the Middle East to the United States. The fair´s extensive programme of conference events, featuring some 500 speakers, gives participants valuable insight into the latest trends and innovations in the property, investment and finance market. Around 1, 600 exhibitors are expected to take part in Expo Real 2010. In 2009 Expo Real attracted 1,580 exhibitors from 34 countries and 21,430 visitors from 73 countries. The total number of participants, including the representatives from the exhibiting companies, was over 36,000. write your comments about the article :: © 2010 Construction News :: home page |