Colliers International pit its regional Capital Markets leaders against each other in a panel session during the firm’s Global Real Estate Conference held in Singapore in May 2019, IN-OUT-ALT, with insights into inbound, outbound and alternative investments. Their brief was simple: pitch their views on which markets provide the most attractive real estate investment opportunities in the year ahead and where investors should hedge their bets.
London came out as the top investment destination in a poll of the audience during the conference. But it was Canada that captured the participants’ attention in a lively debate featuring top Colliers executives, and moderated by Tony Horrell, CEO, UK & Ireland and Head of Global Capital Markets.
Here are the key highlights from the panel discussion which featured Richard Divall (Head of Cross Board Capital Markets, EMEA); John Marasco (Managing Director of Capital Markets & Investment Services, Australia and New Zealand); Robert Stamm (Executive Managing Director of Institutional Capital Markets, US); and Andrew Barnicke (Vice Chairman & Managing Partner of Capital Markets, Canada).
REAL ESTATE INVESTMENT: LONDON STILL A FAVOURITE DESPITE THE FOG OF BREXIT
Ontario leaps to second after an engaging Colliers vs Colliers debate
Andrew Barnicke knew he had a hard sell when just 2% of the audience chose Toronto as the city that they were most likely to invest in in the pre-pitch poll.The Singapore-based property investors at the conference had ranked Sydney at number one, just ahead of London in second, and with Berlin clinching third spot among the five key investment cities on the list.
Barnicke, representing Canada, had 45 minutes to get them to change their minds, which he managed to do with logic and a dose of wit.
Barnicke also peppered his presentation with jokes and interesting anecdotes, such as Canada being the only country in the world to have beaten the United States in a war and burned down the White House.
“Our markets are hitting on all cylinders. We have record high occupancy levels that have continued for the last five years. We’ve got a lot of positives for investing, and we encourage you to change your votes,” he said.
Barnicke pitched the benefits of investing in Canada and its cities against colleagues advocating the United States, Europe and Australia.
London’s siren call
While London still had many Asian admirers in Singapore despite the uncertainties caused by Brexit, Richard Divall, Head of Cross Border Capital Markets for Europe, the Middle East and Africa, played his part to ensure there were few defectors.As a start, he described London as a truly global city that attracts talented people from around the world.
“It is the one global market where yields have come out over the last two years,” he added.
On the contrary, major banks such as JPMorgan and Deutsche Bank recently signed long leases in London, while Facebook plans to use London as a key hub for the development of a new WhatsApp mobile payment feature, he said.
As for the rest of Europe, investors could look forward to low borrowing costs and attractive spreads between property and bond yields.
The continent boasts two truly global cities in London and Paris, while Berlin could soon emerge to be the third, he added.
U.S. and Australia
On Australia, John Marasco said the country has enjoyed 28 years of continuous economic growth, spurred by immigration and heavy government spending on infrastructure.The property market was liquid and diverse, thanks to the presence of many foreign investors as well as local players such as superannuation funds that allocate at least 10% of their assets into real estate.
Marasco said he saw the greatest potential in the Sydney central business district, North Sydney and Parramatta areas which have benefitted from population increases and improvements in transport links.
As for the United States, Robert Stamm played down concerns that the property market was at the tail end of the upcycle following 10 years of strong economic expansion.
The country, he said, had a large, deep real estate sector with regions and cities that did not follow the same economic cycle.
Opportunities could be found in areas like fast-growing secondary cities, multi-family sector, senior living and student living, he added.
Stamm said the United States attracted the best talent from abroad and its economic performance was the best in the developed world, benefitting property investors who took a long-term view.
“We even have a president who stress tests our economy daily with his tweets,” he added.
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