Over the past year, it has become increasingly clear that the economies of Europe, US and Asia are moving at different rates and with quite different features and issues. Europe is clearly still impacted by a debt liquidity crisis and the sovereign debt crisis whereas the US, while still grappling with its debt issues, saw robust REIT and equity fund raising in 2011 and has seen the emergence of a shadow banking market to support the real estate industry. In Asia, it appears to be business as usual with the ongoing changes in public policy towards the real estate markets highlighting the need for local knowledge to operate successfully in the region.
A clearly positive trend is the emergence of the sovereign and super funds, with evidence of a next generation of these now entering the real estate markets and seeking coverage in the major investment markets of the world.
The fund management industry continues to play an important role in getting capital wealth working and invested across the globe and has performed a critical role, especially in the European and US markets over the last decade. The industry is facing challenges, not least the evolving and increasing regulation of its business model and the knock-on-effect of the changing regulatory environment facing its investors. These challenges are starting to and will continue to change investor behavior, including where to invest, and are likely to lead to consolidation of the fund managers themselves. However, with change come opportunities, so agility will be essential.
In the face of economic uncertainty, investors continue to seek security, and real estate has a role to play by providing access to secure income and a physical asset. Securing income flows requires asset and property management skills to improve contractual terms, occupancy levels and generally work the assets. For the industry to deliver risk-adjusted returns to investors, combining the skills of strong local operators with those with capital and aligning their naturally differing objectives will need to be a feature of 2012.
Through our global network of member firms, KPMG is involved in every stage of the asset and investment lifecycle, and offers experience in working with all levels of stakeholders throughout the real estate industry. Whether your focus is local, national, regional or global, we can provide you with the right mix of experience to support and enhance your needs and ambitions. Our knowledgeable real estate professionals focus on providing informed perspectives and clear solutions, drawing experience from a variety of backgrounds including accounting, tax, advisory, banking, regulation and corporate finance.
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You can read the KPMG’s Global Real Estate Practice report (PDF 988 KB)