Real estate has become a global asset class. Lenders have returned to the market and demand is up but the sector is not without risk.
Real estate has become a global asset class.
Banks are now returning to the real estate market, alongside insurance companies and pension funds – all looking for long-term, low-risk investments.
However, a supply shortage and consequential price rises are forcing investors to seek alternatives, while those determined to remain in the real estate sector are diversifying in terms of location and use. Student accommodation, residential developments, hotels, retail outlets and logistics developments are now seen as attractive opportunities. And, if investors cannot buy, they can build.
Risks such as regulation and taxation affect how real estate investment vehicles are structured and disclosure regimes are already having an impact. A shifting tax environment creates uncertainty, while increased regulation adds to operating and administrative costs, creating a drain on returns.
Political influence is also creating opportunities as well as challenges. Real estate investment through new building projects creates jobs, benefits local communities, and attracts overseas investment – all key to economic growth.
KPMG has built up extensive experience in the real estate sector, based on detailed knowledge and insights through its tax, assurance and advisory services delivered through an international network. Having such solid foundations on your side could prove essential amid the uncertainty of real estate investment.