Category: Real Estate

JLL Spark, a division of JLL, announced today the creation of JLL Spark Global Venture Fund, which plans to invest up to $100 million in companies focused on leveraging technology to improve everything from real estate development and management to leasing and investing, while enhancing the experience of those who occupy it.

The fund will also help entrepreneurs and their companies by connecting them with JLL’s business lines and clients for insightful feedback and distribution of their products.

“Having been entrepreneurs ourselves, we know how hard it is to bring a new product to market, especially in an industry that has been slow to adopt new technology.

That’s why our goal is to partner with entrepreneurs, and help them tap into the resources of JLL’s business lines so they can succeed in rapidly growing their companies while we also create value for JLL’s clients,”

said Mihir Shah, Co-CEO at JLL Spark.

The new fund will focus on seed and Series A investments, as well as select later stage rounds. Typical investment size will range from a few hundred thousand to several million dollars. JLL Spark will direct its efforts to technology startups with products that can help JLL investor and occupier clients, or that can be used by JLL businesses to better deliver their services.

The fund is also interested in companies that are inventing new technology-enabled business models in traditional JLL service areas or those that will help expand its services to new client segments.

“Creating this $100 million venture fund through JLL Spark allows us to continue to lead the real estate industry in bringing the best proptech ideas to reality. It complements and expands our substantial ongoing investments in innovative, cutting-edge digital solutions, which is a core part of our Beyond strategic vision and commitment to achieve ambitions for our clients,” said Christian Ulbrich, JLL’s Global CEO.

To learn more, please visit https://spark.jll.com.

Real estate investment trusts are growing in popularity around the world, as investors seek new ways to access an increasingly institutional market. REITs are listed as private funds which are tax-transparent, so investors are only taxed on their dividends.

This puts them on a level playing field with those who hold real estate directly. The Trusts are required to distribute the majority of taxable net income to shareholders and must adhere to certain restrictions on its operations, organisation and ownership.

The security of an institutional regime, low barriers to entry and more liquidity than direct property investment, offer an attractive option for investors. In Russia for example, REITs are attracting high levels of interest as the property market recovers, following a slump in 2014-2016.

Collective investment including REITs schemes have become more popular in Russia as macroeconomic conditions have improved, says Olesya Dzuba, Head of Research, Russia & CIS, at JLL.

“Their popularity is supported by declining bank deposit rates, which encourage savers – both individual and institutional – to seek alternative, higher yielding investment instruments.”

The market has seen rising interest from overseas investors and more equity deals in 2017 after two years of debt restructuring, according to JLL.

Why more property investors are looking to REITs | The Investor

Brand, intellectual property and real estate will be the key stores of wealth in the future. The question for investors is where and what to buy to store wealth for the next 10 years.

Rana Foroohar, from the Financial Times, gave that insight in her keynote speech at the ANREV conference late last year, causing a happy stir in the audience.  Institutional investors in real estate are well placed to provide a home for savings and incomes in the future.

In a world where the real US 10-year government bonds rates have delivered roughly 1% per annum over the last 10 years, Asia Pacific office total returns have averaged 9.6% per annum over the same period.  Although not directly comparable, it is pretty compelling.

The question for investors is where and what to buy to store wealth for the next 10 years.

At the start of 2018 we are observing a globalised economic recovery with all three regions growing. This year we should start to see a quickening of interest rate rises to a more normal nominal level following the global financial crisis.

However, interest rates are part of a longer global downward trajectory for which there are mixed opinions as to the cause[1].

Regardless of this 30-year cycle, central banks are signalling that rates may rise should inflation take hold. The potential for inflation to lift as growth continues means that even as nominal levels rise, the level of real rates is likely to be much lower than pre-GCF.

Low real rates and the prospect of inflation will continue to see investors allocate to real estate, either towards 10% of their portfolios or even greater for those well-versed in real estate investment.

The growing global economic recovery provides a broad swathe of real estate demand. You can find our short-term outlook for real estate markets in our quarterly Global Market Perspective

Here are some of the longer term secular shifts to watch in 2018 that will influence how real estate performs as a long-term store of wealth:

1 Winning cities with long-term demand for real estate

The cities with long-term demand for real estate and those with technology-based occupiers win as other tech occupiers co-locate to attract talent. Migration to winning cities will continue to be a global phenomenon.

No wonder, then, that there is a battle to host Amazon’s next HQ, given the spillover effects to young millennial talent it’s likely to attract.

Across Asia Pacific, we found the primary reason for the choice of location for technology firms is access to talent.

If you can get your city/suburb/neighbourhood to be the next tech hotspot, agglomeration works and long-term demand will sustain.

Since demand has the potential to be global (smartphone access) and supply very local – specific locations in tech-focused cities will win.

2 Falling cost of technology to shift transaction costs

This will allow a shift in transaction costs. Information and search costs, bargaining costs, and monitoring and enforcement costs of any exchange have moved fundamentally over the last 10 years.

Airbnb is a case in point.

Hotels survived because, from a transaction cost viewpoint, they were cheaper than trying to find a room to rent on a short-term basis.

That was until the arrival of the smartphone. Now hotels have to compete on service; location is less of a hold. This will apply to other forms of real estate.

3 Rise of the ‘co’ economy

Curating communities of co-workers and co-occupants will be the new role in adding value to real estate. Technology reduces the costs of outsourcing and freelancing. In turn, that changes employment patterns and a desire for people to co-locate with like-minded people – whether co-working, co-living, or finding friends and having fun.

The genius of co-working companies is not the…

In the newly released biannual Global Real Estate Transparency Index (GRETI) 2018 by property consultancy firm JLL, Thailand is ranked 34th, an improvement from the 2016 edition of the Index where the country was ranked 38th.

Compared to the other six countries from Southeast Asia covered by the Index, Thailand is ranked the 3rd most transparent real estate market in the sub region followed by Indonesia, Philippines, Vietnam and Myanmar that were ranked globally 42nd, 48th, 61st and 73rd respectively.

This 10th edition of the Global Real Estate Transparency Index (GRETI) contains the most comprehensive country comparisons of data availability, governance, transaction processes, property rights and the regulatory/legal environment around the world.

The 2018 Index covers 100 countries and 158 city markets, and the number of individual factors covered has increased by 36% to 186 factors.

Mrs. Suphin Mechuchep, Managing Director of JLL, says “Transparency across Thailand’s real estate markets has continuously improved over the last decade thanks largely to increased availability of and access to market data. While the growth of listed companies and real estate investment vehicles has contributed a lot to improving financial disclosures, greater regulatory enforcement, the planned introduction of a new property tax system and steps to digitise its land registry will underpin the country’s improvement in real estate transparency further.”

“The improved level of transparency represents a sign of growing maturity of Thailand’s real estate market. It helps owners, investors and occupiers identify opportunities and anticipate challenges more accurately, and consequently make better real estate decisions,” Mrs. Suphin adds.

Biggest improvements in Asia Pacific

“Asia Pacific as a whole has made the strongest transparency improvements since 2016 compared to the other four regions covered by the study,” says Dr Megan Walters, Head of Research, Asia Pacific at JLL.

“This is supported by developments in Myanmar, Macau, Thailand, India and South Korea.”
Myanmar has registered the most significant improvement globally, moving up 15 places to join the ‘Low Transparency’ group.

According to the report, the country continues to open up its economy as increasing investor demand translates into greater market intelligence.

For the first time, South Korea has nudged into the ‘Transparent’ tier, with heightened investor activity pushing improvements in data coverage and a new carbon emissions trading scheme.

Macau has also advanced with a focus on anti-money laundering, resulting in increased monitoring by financial regulators

Dr Walters adds: “It’s also worth noting that India’s reform-driven government has made significant progress in its agenda to improve transparency and reduce corruption. The Real Estate Regulatory Act, which was passed in 2016 and implemented in 2017, is a regional highlight. The country joins China, Indonesia and Thailand at the top end of the ‘Semi-Transparent’ tier.”

Asia Pacific shows fastest progress in real estate transparency

Asia Pacific’s mature economies such as Singapore, Hong Kong and Japan, have a significant opportunity to advance real estate transparency through proptech adoption. These leading investment destinations are on the cusp of the ‘Highly Transparent’ tier, and are poised to join the top group, which includes countries such as Australia, New Zealand, the U.S. and the UK.

“The proptech sector is growing fast, especially in Asia, though adoption is still relatively low compared to North America and Europe,” says Jeremy Kelly, Director, Global Research, JLL.

“We believe the Singapore government could play a key role in promoting proptech adoption through open-data initiatives and…