In this piece, we will take a look at the 12 most profitable real estate stocks now. For more real estate stocks, head on over to 5 Most Profitable Real Estate Stocks Now.
The real estate sector is one of the most lucrative industries in the world. Its importance is underscored by the fact that some of the largest economies in the world are inextricably linked to real estate development. The biggest example of the sector’s importance is the 2008 financial crisis. This crisis, the after effects of which we are dealing with even today, shook the real estate industry badly . Spurred by a policy of low interest rates, homeowners borrowed extravagantly to own their properties, and banks then used these loans as an asset to sell their interest payments to investors. However, once the interest rates went up, the mortgage owners started to default – kicking a vicious cycle that forced the Federal Reserve to pump billions of dollars into the economy to prevent an all out collapse. How much did the Fed spend to prevent disaster? Well, its latest balance shows that while before the crisis its balance sheet had roughly $0.9 trillion of assets, these swelled to $2.2 trillion by the end of 2008. Effectively, the central bank had to more than double its assets to bail out big banks and the economy, and it is still struggling to contain it, as the coronavirus pandemic further exacerbated the problem and led to the balance sheet swelling to $8.96 trillion.
Another more recent example of the perhaps outsized role that real estate plays come from the world’s second largest economy, China. Spurred by the financial difficulties of China Evergrande Group (OTCMKTS:EGRNF), the crisis continues to threaten not only the Chinese market but also the global economy due to the interlinking of large asset managers such as BlackRock with the Chinese stock market. In order to stimulate real estate, and by extension the broader economy, the Chinese government allowed low interest rates and increased bank lending to real estate companies to build properties and increase home ownership in the country. These stimuli led to the home prices in Shanghai rising by a whopping 150% between 2003 and 2010 and paved the way for excessive borrowing for big construction companies who then used these loans to pay other debts and take out more loans. The spiral led to the government making new laws, called the Three Red Arrows, which limited real estate developers’ ability to raise new funds. Steeped in debt, Evergrande found it difficult to raise working capital and missed bond payments.
In terms of market value, the real estate sector is one of the most valuable in the world. According to research from Allied Market, the global real estate market was worth a whopping $28 trillion in 2021. From then until 2031, the firm believes that it will grow at a compounded annual growth rate (CAGR) of 5.3% to sit at an estimated $48 trillion by the end of the forecast period. Cementing the importance of China in the industry, Allied Market Research points out that Asia Pacific is the world’s largest real estate sector, and that it accounts for more than two fifths of the global market. However, in terms of growth, the research firm believes that Latin America, the Middle East, and Africa (LAMEA) market will be the strongest growing region, as it outpaces the broader industry by posting a CAGR of 6.4%.
Today we’ll look at some of the biggest money makers in the real estate world, with the top performers being Longfor Group Holdings Limited (HKG:0960.HK), China Overseas Land & Investment Limited (HKG:0688.HK), and Prologis, Inc. (NYSE:PLD).
We sifted out the biggest real estate companies in the world in terms of their market capitalization and revenue. Then, their net income for the past twelve months was determined, and the top twelve performers are listed.
CBRE Group, Inc. (NYSE:CBRE) is a real estate services company that provides services such as building engineering, construction management, investment services to commercial real estate investors, and property sales and mortgage services.
CBRE Group, Inc. (NYSE:CBRE) received a Buy share price rating and a $100 price target from Citi in January 2023 as the bank outlined that the firm is slated to benefit from real estate outsourcing. By the end of September 2022, 47 of the 920 hedge funds polled by Insider Monkey had invested in the firm.
CBRE Group, Inc. (NYSE:CBRE)’s largest investor is Natixis Global Asset Management’s Harris Associates which owns 13.6 million shares that are worth $1 billion.
Along with Prologis, Inc. (NYSE:PLD), Longfor Group Holdings Limited (HKG:0960.HK), and China Overseas Land & Investment Limited (HKG:0688.HK), CBRE Group, Inc. (NYSE:CBRE) is a profitable real estate stock.
Public Storage (NYSE:PSA) is an American company that is headquartered in Glendale, California. The firm is a real estate investment trust (REIT) that buys, builds, and operates storage units. It has thousands of facilities all over the U.S., alongside interests in a European storage company that also provides it with a global footprint.
Public Storage (NYSE:PSA) faced a setback in February 2023 when another storage company rejected the firm’s massive $11 billion buyout offer, sharing that it believes the offer is paying too little. 34 of the 920 hedge funds polled by Insider Monkey in Q3 2022 had held a stake in the company. The trailing twelve month net income removes the effect of a security sale on the firm’s profit.
Public Storage (NYSE:PSA)’s largest investor in our database is Jeffrey Furber’s AEW Capital Management which owns 457,800 shares that are worth $128 million.
Simon Property Group, Inc. (NYSE:SPG) focuses on developing and operating hospitality properties such as restaurants and entertainment centers alongside also focusing on high end shopping malls. The firm is headquartered in Indianapolis, Indiana.
Simon Property Group, Inc. (NYSE:SPG) is the largest shopping mall operator in the United States, but despite this, the firm missed a rather large $295 million loan maturity in February 2023. By the end of last year’s third quarter, 35 of the 920 hedge funds surveyed by Insider Monkey had bought the firm’s shares.
Out of these, Israel Englander’s Millennium Management is Simon Property Group, Inc. (NYSE:SPG)’s largest investor. It owns 569,619 shares that are worth $66 million.
10. China Evergrande Group (OTCMKTS:EGRNF)
Trailing Twelve Month Net Income: $2.32 billion (1HKD = 0.13USD)
Number of Hedge Fund Holders in Q3 2022: N/A
China Evergrande Group (OTCMKTS:EGRNF) is a diversified Chinese property company that operates in the development, investment, management, and consumer sales segments. The firm also has finance, healthcare, and internet divisions.
China Evergrande Group (OTCMKTS:EGRNF) is busy investigating matters of financial impropriety, with an investigation revealing in February 2023 that its directors had acted improperly in redirecting loans from its property services division to the group as a whole.
9. Goodman Group (ASX:GMG.AX)
Trailing Twelve Month Net Income: $2.34 billion (1AUD = 0.69USD)
Number of Hedge Fund Holders in Q3 2022: N/A
Goodman Group (ASX:GMG.AX) is an Australian company headquartered in Rosebery, New South Wales. The firm has a global operational footprint, with a presence in lucrative markets such as the United Kingdom, Brazil, North America, Asia, and Europe.
Goodman Group (ASX:GMG.AX)’s first fiscal half of 2022 financial results shared in February 2023 revealed that the firm had raked in AUD1 billion in revenue, which marked a 1.5% drop. At the same time, its operating profit of AUD877 million marked an 11.5% annual increase.
American Tower Corporation (NYSE:AMT) is a specialty real estate company that focuses on operating telecommunications towers. The firm has hundreds of thousands of communications sites all over the world.
American Tower Corporation (NYSE:AMT) is busy expanding its global footprint, as a report in February 2023 speculated that the firm is interested in buying out a Spanish mobile tower operator. Insider Monkey dug through 920 hedge fund portfolios for last year’s third quarter to determine that 42 had held a stake in American Tower Corporation (NYSE:AMT).
American Tower Corporation (NYSE:AMT)’s largest investor is Charles Akre’s Akre Capital Management which owns 6.9 million shares that are worth $1.4 billion.
7. Vonovia SE (ETR:VNA.DE)
Trailing Twelve Month Net Income: $3 billion (1EUR = 1.07USD)
Number of Hedge Fund Holders in Q3 2022: N/A
Vonovia SE (ETR:VNA.DE) is a German real estate company that focuses its attention on the residential sector. The firm has more than half a million residential units in its portfolio that are spread across several European countries such as Germany and Sweden.
Vonovia SE (ETR:VNA.DE) is interested in the sustainable real estate development industry, as it is leading a 100 million funding round for an Austrian sustainable homes developer.
Vonovia SE (ETR:VNA.DE) joins our list of profitable real estate stocks, alongside others such as Longfor Group Holdings Limited (HKG:0960.HK), China Overseas Land & Investment Limited (HKG:0688.HK), and Prologis, Inc. (NYSE:PLD).
5. CK Asset Holdings Limited (HKG:1113.HK)
Trailing Twelve Month Net Income: $3.01 billion (1HKD = 0.13USD)
Number of Hedge Fund Holders in Q3 2022: N/A
CK Asset Holdings Limited (HKG:1113.HK) is an Asian property developer with a global footprint. It is headquartered in Central Hong Kong and primarily concerns itself with operating hospitality locations, developing residential properties, and leasing commercial properties such as offices and warehouses. CK Asset Holdings Limited (HKG:1113.HK) has operations in the U.S., China, Hong Kong, the U.K., Singapore, and several other countries.
CK Asset Holdings Limited (HKG:1113.HK) scored a big win in the Hong Kong property scene in February 2023 when it was able to buy 1.42 million square feet of land for a bargain price of $1.1 billion. The purchase came as property prices were dropping, and CK Asset Holdings Limited (HKG:1113.HK) is also required to build a nursing home and a childcare facility as part of the deal.
4. Sun Hung Kai Properties Limited (HKG:0016.HK)
Trailing Twelve Month Net Income: $3.25 billion (1HKD = 0.13USD)
Number of Hedge Fund Holders in Q3 2022: N/A
Sun Hung Kai Properties Limited (HKG:0016.HK) is a Chinese real estate company that develops and sells a wide variety of properties such as shopping malls, residential properties, office spaces, hotels, and more. It has more than a hundred million square feet of property in Mainland China and Hong Kong and is headquartered in Wan Chai, Hong Kong.
Sun Hung Kai Properties Limited (HKG:0016.HK) is one of the leading Hong Kong property developers when it comes to selling eco friendly properties – a feature that has let it generate over a billion dollars in revenue in Mai Po wetlands.
Prologis, Inc. (NYSE:PLD) is an American real estate company that is based in San Francisco, California. The firm has almost a billion square feet of ventures, properties, and projects in more than a dozen countries.
One crucial market that Prologis, Inc. (NYSE:PLD) operates in is Japan, where its properties help with disaster relief operations. The firm expanded this recently by signing agreements with 11 cities for disaster relief. Insider Monkey’s Q3 2022 survey of 920 hedge funds revealed that 59 had held a stake in the company.
Prologis, Inc. (NYSE:PLD)’s largest investor is Jeffrey Furber’s AEW Capital Management which owns 2.8 million shares that are worth $316 million.
2. Longfor Group Holdings Limited (HKG:0960.HK)
Trailing Twelve Month Net Income: $3.49 billion (1HKD = 0.13USD)
Number of Hedge Fund Holders in Q3 2022: N/A
Longfor Group Holdings Limited (HKG:0960.HK) is a diversified Chinese investment holding company that has several real estate divisions that develop, invest in, and manage properties. The firm concerns itself with developing and selling residential, corporate, and commercial properties.
Longfor Group Holdings Limited (HKG:0960.HK) is a rare Chinese property developer that has received funding from government banks to pay off foreign debts. The firm received a $100 million loan for this purpose by keeping its Chinese properties as collateral in December 2022.
1. China Overseas Land & Investment Limited (HKG:0688.HK)
Trailing Twelve Month Net Income: $5.26 billion (1HKD = 0.13USD)
Number of Hedge Fund Holders in Q3 2022: N/A
China Overseas Land & Investment Limited (HKG:0688.HK) is a holding company with real estate interests in China and the U.K. The firm builds and rents residential and commercial properties, alongside providing design consultancy services. It is headquartered in Central Hong Kong.
China Overseas Land & Investment Limited (HKG:0688.HK) won a major reprieve in February 2023 when Fitch reiterated the company’s debt rating to A- at a time when the Chinese real estate segment is suffering from a crisis of confidence.
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OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
