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London, Apr 17, 2012 - (ACN Newswire) - "The secondary real estate markets in Australia are currently being overlooked by investors," says Matthew Gibb, Managing Director, Gibb Group. There are tremendous opportunities to acquire assets and add value by re-furbishing the asset, repositioning it in the marketplace and re-pricing it towards core returns, he adds.
From a property development and management company at the upcoming marcus evans APAC Investments Summit 2012, taking place in Macao, China, 16 - 18 April, Gibb discusses increasing investment yields and efficient asset management.
- How can investors prosper in the Australian real estate sector? What are the lucrative investment opportunities available?
The industrial sector is somewhat two-tiered, but fund managers and investors seem to be focusing only on new products, such as purpose built warehouses where a tenant may take a five to ten year or even longer lease term. The competition for good quality new products is so significant that we are seeing investment yields of effectively less than eight per cent, which is quite a sharpening for the market.
However, conversely the existing or secondary industrial property markets in Australia are being overlooked. There is a huge opportunity to acquire existing buildings with shorter leases that are fundamentally high-quality buildings in good locations at investment yields of up to 200bps greater than the prime pre-committed market. Investors can add value to existing secondary assets by re-leasing, re-furbishing the asset, repositioning it in the marketplace and re-pricing it towards core returns.
- What strategies for mitigating risks would you recommend?
The biggest risk when investing into any APAC country is the local market risk. Chief Investment Officers (CIOs) who are managing large portfolios must take the time to fully comprehend the local culture, markets and its key participants before making any decisions.
If it is intended that any investment acquisition be partially funded by local debt, then understanding both the accessibility and how readily available debt is in the local market is vital, and of course those variables affect on pricing.
- Is the real estate market continuing to grow in today's economy?
The movement of capital into Australia has been significant over the past year due to significant interest from offshore investors in the industrial real estate space. This interest from off-shore and an increasing interest in the sector from local funds is helping to underpin the bottom of the market, which augers well for the next few years. Looking over a ten year period, Australian commercial property is back to an average of ten per cent annual returns. Income typically makes up seven to eight per cent of that return and capital growth makes up the balance of two to three per cent.
- What mistakes should investors avoid when investing within this space?
At the end of the day, it comes back to due diligence of the local market and working with key local participants to understand the risks. Australia, like many Western markets, is transparent, with readily available data. CIOs can analyse the market to death, but only by visiting the asset in person and talking with the locals, can they get a real feel of the investment market.
About the APAC Investments Summit 2012
This unique forum will take place at The Venetian Macao, Macao, China, 16 - 18 April 2012. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The Summit includes presentations on growth despite the global downturn, fuelling investments across the region and increased urbanisation and its corresponding needs.
For more information please send an email to info@marcusevanscy.com or visit the event website at www.apacinvestmentssummit.com/MatthewGibbInterview
marcus evans group - investment sector portal: http://tiny.cc/4QCf2b
The Investment Network - marcus evans Summits group delivers peer-to-peer information on strategic matters, professional trends and breakthrough innovations.
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Please note that the Summit is a closed business event and the number of participants strictly limited.
About Gibb Group
Gibb Group is an Australian property development and asset management company specialising in industrial logistics property and suburban office and business park space. Founded by Matthew Gibb, a former senior international executive with Goodman Group, and Qanstruct Directors Mark Ruff and Andrew Percy, the group offers purpose built solutions for users of industrial and commercial property across Australia and prides itself on delivering innovative and practical solutions for its clients. www.gibbgroup.com.au.
Contact:
Stacey Melvin,
Journalist, marcus evans, Summits Division
Tel: + 357 22 849 400
Email: press@marcusevanscy.com
Topic: Press release summary
Source: marcus evans Summits
Sectors: Daily Finance
https://www.acnnewswire.com
From the Asia Corporate News Network
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