beyond the cycle - cbre/media/files/events/multifamily conference... · moderator: colleen pentland...
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M o d e r a t o r : C o l l e e n P e n t l a n d L a l l y, C B R E John German, Invesco
Stafford Lancaster, Delancey Konstant in Luet tger, CBRE Frankfur t
Tim MacMahon, CBRE Dubl in
WORLD TOUR OF EMERGING MULTIFAMILY MARKETS
DIFFERENTIATED MARKETS AND OPPORTUNITIES UK residential investment market Immature but developing quickly Demand from domestic and institutional
investors Transparent legal framework with low
levels of regulation
Spanish residential investment market Market in recovery from GFC shocks Culture of ownership rather than renting Heterogeneous with a lack of transparency
German residential investment market Established and steady growth Recognised and dependable Transparent and tradable Stable
Ireland residential investment market Immature but developing quickly Demand from non-domestic
institutional investors Market in recovery from GFC shocks Transparent legal framework
UNITED KINGDOM DEMAND DRIVERS
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
0
50
100
150
200
250
300
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2008
- 09
2009
- 10
2010
- 11
2011
- 12
2012
- 13
2013
-14
2014
-15
Num
ber o
f PR
S H
ouse
hold
s (B
ar)
Num
ber o
f Hou
seho
lds
(Inde
xed
100
= 19
91)
(line
)
Number of Private Renters (RHS)Owner OccupiedSocial RentedPrivate Rented
Demographics – UK population has increased 8% over the past 10 years (4.7 million people)
Shortfall of new housing delivery
Affordability constraints to buying a home
Shift in lifestyle preferences
Source: British Property Federation
69,824 UNITS • 13,277 Completed • 16,506 Under Construction • 40,041 In Planning
UNITED KINGDOM HOW REAL IS IT?
DUBLIN DEMAND DRIVERS
WHY DUBLIN
?
Sentiment Swing from
Buyer market to Rental Market
Multi-National Employer base
Transient Population
Growth in Population
6.7% unemployment
Lack of private, affordable and social housing
Largest proportion of
25-40 year olds in Europe
Rising Rents & Low Capital
Values
DUBLIN GROWTH & FORECAST OF DUBLIN’S POPULATION
0
0.5
1
1.5
2
2.5
1996 2002 2006 2011 2016 2026(f)
1.4 Million 1.5 Million
1.66 Million 1.8 Million
1.9 Million
2.4 Million
Source: Central Statistics Office
EAST VILLAGE, LONDON THE UK’S FIRST PRS NEIGHBOURHOOD • 67 acre Freehold District in Zone 2/3
• Move-ins from 2013
• More than 6,000 residents now living in 2,818 homes:
– 1,439 homes for market rent – managed by Get Living
– 1,379 ‘affordable’ homes
• Further 1,850 consented homes
• 51% Estate Management Company
• 1,800 pupil ‘Outstanding’ academy school
• Health & Wellbeing Centre
• Unrivalled transport connections
• 1.9m sqft Westfield Stratford City shopping centre
• On doorstep of Queen Elizabeth Olympic Park - 500 acre parkland and sporting venues
GLOBAL RESPONSE INVESCO EU RESIDENTIAL INVESTORS
14
7
3
1 1
1 1
Germany
UK
Denmark
Canada
Netherlands
Australia
US
EUROPEAN RESIDENTIAL EXPERIENCE
Currently committed: - US$540 million - 15 investments (1,766 units) - Forward funding developments - Investments in Germany, UK and Spain
U.S. $540 million; 15 investments
ASIAN RESIDENTIAL EXPERIENCE
Currently manage: - US$472 million - 2 investments (2,607 units) Sold: - US$851 million - 10 Investments (1,380 units)
U.S. $1,323 million; 12 investments
U.S. RESIDENTIAL EXPERIENCE
Currently manage: - US$9.0 billion - 107 investments (36,278 units) Sold: - US$7.6 billion - 262 investments (75,447 units)
U.S. $16.6 billion; 369 investments
SOURCE: INVESCO REAL ESTATE AS OF 31 DECEMBER 2016. FOR ILLUSTRATIVE PURPOSE ONLY. PHOTOGRAPHS SHOWN ABOVE REPRESENT ACQUIRED ASSETS. IMAGES ARE ONLY RENDERINGS. IRE HAS PERMISSION TO USE PHOTOGRAPHS.
GLOBAL EXPERTISE, LOCAL IMPLEMENTATION INVESCO GLOBAL RESIDENTIAL
GERMANY • 41M residential units (17.5M owner-occupied; 23.5
rental apartments) • Vacancy rate decreased from 3.6% (2010) to 3.0
(2015) • Top 7 market vacancy rates under 1.5%; Munich
just 0.2% • Berlin most liquid residential market with an overall
residential volume of approx. €4bn – Berlin current annual population growth:
+50,000 – Vacancy rate 2015: 1.2% – Average market rent 2016: EUR 9.00 (+6%
compared to 2015 and +55% compared to 2009)
– Average condominium price 2016: €3,300 (+10% compared to 2015 and +105% compared to 2009)
GERMANY INVESTMENT ACTIVITY
0
50
100
150
200
250
300
350
400
02468
1012141618202224
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q12016
Q12017
Cou
nt re
side
ntia
l uni
ts (x
1,00
0)
Tran
sact
ion
volu
me
(€ b
illion
)
Transaction volume (€) Average transaction volume 1999-2016
Number of residential units Average number of residential units 1999-2016
Portfolio transaction volume and number of residential units
RESIDENTIAL ACROSS THE RISK SPECTRUM
Germany
UK
Spain
5
6
7
8
9
10
11
12
13
14
15
Total return expectations (%)
Core/stabilized (5-8%)
Ret
urn
Core+ (8-12%)
Value added/enhanced (12-15%)
Risk
IRR FROM RESIDENTIAL INVESTMENTS
SOURCE: IPD MULTINATIONAL INDEX AS OF 31 DECEMBER 2015.
10.1
0%
11.1
0%
13.2
0%
8.30
% 9.80
%
9.00
%
9.30
% 11
.60%
11.4
0%
8.40
%
8.60
%
11.0
0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
USA Japan Switzerland Netherlands France Germany Sweden UK Canada Finland
1 year 3 year 5 year
Residential real estate total returns over 1, 3 and 5 years to end 2015
FIRST MOVERS U.S PLAYERS IN GLOBAL MARKETS
IRELAND • AIG • Ares • Hines • BlackRock Capital • CapREIT • CBRE Global Investors • Heitman • Kennedy Wilson • Lone Star • Marathon Asset
Management
GERMANY • Angelo Gordon • GI Partners • Greystar • Heitman • Hines • Invesco • Lincoln Equities • PGIM • Tristan
UNITED KINGDOM • AIG • Akelius • Apollo • Atlas Residential • Blackstone • Brookfield • Deutsche Asset
Management
• Goldman Sachs • Greystar • Invesco • LaSalle Investment
Management • Lone Star • Related • TH Real Estate