Brokers push real estate trusts

TURMOIL in overseas economies has turned the spotlight on the Australian real estate investment trust sector with leading brokers now recommending it to clients.

The average institutional fund has about 6 per cent allocated to the Australian REIT. This is tipped to rise as overseas players look for a haven away from Europe.

John Kim, property analyst at CLSA Asia-Pacific Markets, has recommended the sector given its attractive dividend yields, relative earnings resiliency and improved capital management.

In his report Australia Real World (Buy this, not that), he says that with interest rates falling, the yields, of 6.2 per cent are attractive compared to the 10-year bonds of 2.9 per cent. Mr Kim says he prefers the retail sector over the office market, as demand has slowed for offices, and foreign investors are now penalised with a surprising doubling of their withholding taxes to 15 per cent.

''This will affect Sydney offices [55 per cent of 2011 buyers were foreign], as buyers renegotiate to maintain their internal rates of return,'' Mr Kim said. ''While Australia remains attractive due in part to lower interest rates, confidence has been impaired.'' He says that despite the weaker outlook for offices and the generally parlous state of the construction sector, the trusts are still better options than overseas markets.

This was backed up by ratings agency Moody's Investors Service, which maintained a stable outlook for Australia's REIT sector.

The credit ratings agency says its decision is based on the expectation of a steady operating environment in the next 12-18 months.

Its new report says that the underlying drivers for commercial property are expected growth in net operating income arising from fixed contractual rent increases and the generally restrained supply of new properties.

But it added that countering these supportive factors are subdued business confidence, patchy demand for white-collar workers, particularly finance sector-related, and a difficult retail environment.

Melbourne's CBD vacancy rate of 5.3 per cent is low by historical standards. Its relatively small supply is reversing, with about 7 per cent of the market for completion in 2012 and 2013.

Source: http://www.theage.com.au/business/property/brokers-push-real-estate-trusts-20120601-1zmzv.html

How to pick a real estate agent that suits your needs

Many factors contribute to the experience and success of buying and selling homes, but even in the digital age of a more transparent real estate market, working with a good real estate agent continues to be one of biggest impacts on either side of the transaction.

But how do you pick the right person to represent you or your home?

Before you just start asking your friends or digging through the fliers in your mailbox or hunting online, here are a few dos and don'ts you should seriously consider when selecting an agent.

Do:

Ask people you trust for agent recommendations, but take what they say with a grain of salt. Did they recently buy a home in your same price range? Have they had a successful time selling their home? Just because this agent worked out well for them does not guarantee the same experience for you.

Research. Most real estate websites, including Zillow, have online agent reviews. This can be a good starting place.

Find an agent that specializes in what you're trying to do. Don't select an agent who sells $2 million homes to help you find a $200,000 home. Check out current home listings. Do you like the photos, the description? Try contacting the agent to see if they're available for you.

Interview the agent. What is their specific marketing plan for your home? How will they negotiate so that you can be the winning bidder on your dream home? Why are they the best option for you? Can you call some of their past clients?

Set up expectations. What do you want from them? Outline your needs from the get-go so there won't be any surprises down the road.

Make sure you get along with the agent. You don't need to be best friends, but ultimately there should be some sort of rapport that allows for a successful business relationship.

Don't:

Pick friends or family. You don't want to jeopardize a friendship if the buying or selling process gets difficult. Also, be wary of hiring even a friend of a friend, or someone recommended. If you're serious about real estate, find someone that you can be honest and professional with. Unfortunately, that may not include your cousin or your best friend's spouse.

Pick someone who dually represents the buyer and the seller of the property you're looking at. They may not be able to fully transparent with you.

Be afraid to break up with your agent. Be honest and simply tell the agent it's not working out. List your reasons and be respectful.

If you're not quite ready to be tied down to a particular agent, it's better not to engage one until you've made a formal decision. You can communicate with an agent and ask for advice, but be clear upfront where you stand.

Source: http://www.mercurynews.com/real-estate/ci_20260470/how-pick-real-estate-agent-that-suits-your

Global real-estate markets continue promising trend

While economic uncertainty still affects the main commercial real-estate centres around the world, global real-estate markets are showing steady improvements, according to Jones Lang LaSalle's new suite of global forecasting reports.

The firm's Global Office Index reveals the fourth quarter of 2011 marked the eighth consecutive quarter where prime office rents have risen, up a further 0.8 per cent over the previous quarter and representing 6-per-cent growth over the fourth quarter of 2010. Global vacancy is edging down to the lowest point for the past two years at 13.6 per cent.

"The majority of global leasing markets are holding firm, and many are showing remarkable resilience, especially among the BRIC countries [Brazil, Russia, India and China], as well as robust showings from Canada, Australia, Germany and the Nordics," said Jeremy Kelly, director of Jones Lang LaSalle's Global Research team and author of the firm's Global Market Perspective. "While leasing markets in the major financial centres are softening, the limited supply pipeline should ensure that they do not move significantly out of balance."

Jones Lang LaSalle's Global Office Index tracks the rental performance of prime office space across 81 major markets in the Americas, Asia Pacific and Europe. Key findings of the Jones Lang LaSalle's Fourth Quarter 2011 Global Office Index include:

_ Rental growth rose the most in the Americas at 1.2 per cent in the fourth quarter over the third quarter of 2011, as landlord leverage gradually increased in the majority of markets.

_ Asia-Pacific markets saw rental growth decelerate from 2.5 per cent in the third quarter to just 0.9 per cent in the fourth quarter as corporate demand began to slow.

_ Despite the negative economic backdrop, Europe's office markets showed some improvement over the fourth quarter with growth picking up to 0.4 per cent from a virtual halt in third quarter 2011.

_ Leasing volumes will be steady in 2012 with positive rental growth expected in most major office markets. Beijing, Toronto and San Francisco are expected to top the charts with potential double-digit increases.

Investors, already wise to the resilient fundamentals in the commercial real-estate sector,

continue to choose real estate given its attractive investment status compared with alternative investments.

The Global Market Perspective shows robust capital market investment volumes in the fourth quarter 2011. A total of US$411 billion (Bt12.68 trillion) was transacted in full-year 2011, up 28 per cent on 2010. 2012 transaction levels are set to match 2011, with upside potential in the Americas.

Arthur de Haast, lead director of the International Capital Group at Jones Lang LaSalle, added that the markets are witnessing a "flight-to-quality", traditional in times of uncertainty, as investors pivot towards core assets in those major cities with strong economic fundamentals and/or with "safe-haven" characteristics. While there is capital available for commercial real estate, debt financing around the global will be more constrained in 2012. We're seeing capital appreciation slowing as yields flatten, and spreads between core and secondary assets widen.

While commercial real-estate expectations for 2012 have been tempered, barring significant financial system shocks, commercial real estate investment and leasing volumes are likely to be maintained at 2011 levels.

Source: http://www.nationmultimedia.com/business/Global-real-estate-markets-continue-promising-tren-30175734.html