SECTOR REPORT
Real estate: Confident investment
investment decisions.
that will always be there, and whilst such quantum of wealth will
developments, but also student, industrial, care home, retail
been a preferred choice for numerous wealthy individuals from
across the world and across the faiths. Whilst investors into the
Middle East property need not worry themselves with the tax
investment advisers. Meanwhile, Dubai has been gaining from
its relative stability and international perspective and transport
established, tested and proven.
whilst memories of the Euro crisis of Summer 2012 dampened
enthusiasm for Continental Europe.
At the same time, the number of professionals able to cement
these transactions together has blossomed over the last decade
and tax advisers familiar with the requirements and structures to
advise the investment professionals delivering opportunities to
Malaysia is still at a relatively early stage, albeit with a number of
by those from the Middle East and Malaysia, seeking real estate
opportunities across the globe.
looking for opportunities in London and the key cities of the
2014 will see this flow rate
grow, with a wider number
of Malaysian participants looking
for opportunities in London and
the key cities of the US
alternative real estate asset classes and locations outside the
perhaps a move into infrastructure. Continental Europe, after
a period of relative economic stability, has also come back to
the attention of many investors, with Germany the most likely to
Meanwhile, my hope for 2014 is a stable regulatory and tax
environment that will continue to encourage such international
era of increasing and often burdensome regulation seems to
be reaching its peak, whilst tax systems work best when they
are stable and predictable. However, for the Islamic real estate
equity investors, but also with banks able and now willing to
participants both young and older. As a graduate myself, my
support for The Chartered Institute for Securities and Investment’s
inevitably led to some names withdrawing from the Shariah
market, 2013 saw many banks return to or discover the immense
Barring any unexpected economic surprises, 2014 should provide
However, investors remain cautious, and whilst “keen” they are
not “desperate” to invest. Blind fund initiatives remain largely
unsuccessful, with investors preferring individual transactions in
countries they are familiar with and where they trust the legal system.
I remain encouraged by the depth of questions asked by investors
on each and every transaction that we undertake. Such diligence
should ensure that only the most compelling of opportunities are
supported. Meanwhile, co-investment by the investment adviser
remains a key component of aligning interests for all involved.
investors to remain diligent and vigilant in their assessment of
investment advisers and the underlying transactions themselves.
Whilst global economic growth should improve prospects for
the real estate asset class as a whole, for me the joy of real
estate remains the ability to select individual transactions that will
outperform on the upside and protect wealth on the downside.
The foundations have been set. It’s time to start building the walls
consulting
and the roof.
www.IslamicFinanceConsulting.com
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www.REDmoneyBooks.com
He can be contacted at [email protected].
28
February 2014