Investment

Key trends that will shape global real estate investment – Investment Executive

Published

3 years ago

December 8, 2021

“Social and environmental trends are a clear priority, increasingly woven into long-term investment strategies and performance targets,” the report stated. “We expect environmental attributes and asset performance to drive market turnover as investors re-calibrate their assets under management.”

Among the more than 300 global investors surveyed for the report — of which 41.6% were reportedly investment managers — three quarters said they’re taking action when it comes to “investing with intent.” Further, at least 25% were in the “advanced planning stages” regarding whether to hold onto or dispose of assets.

Specifically environmental-related ESG considerations were prominent for the investors polled, with the report noting that three quarters were integrating environmental factors into their strategies.

Implementation was varied, however, with 21% of respondents saying they were still in the ESG consideration stage.

When asked whether they expected ESG-compliant assets to achieve a value premium within the next three years in various sectors, the most common answers from respondents were “0% to 5%,” “no difference” and “I don’t know.”

Of those who didn’t know, 28% said there was a lack of “clear guidelines” for determining what is and isn’t an ESG-compliant asset, while 25% blamed the lack of “effective benchmarking.”

In the social and governance realms, the report results similarly suggested that investment professionals are still in the midst of implementation.

While nearly half (48%) said current benchmarks and reporting help them manage governance factors, 43% were still deciding on what to use. On the social front, 17% had established ways to consider the “health and wellness” of their assets, while 38% and 35%, respectively, were only in the beginning and consideration phases.

Yet, looking at possible market picks, the report said, “Social trends point to affordable housing as a significant growth opportunity globally when expertly managed.”

About core and core-plus office spaces — defined as quality office assets in major cities, in a release — the report said they are the top global strategy picks, with 60% of investors having stated this as their preference (up 50% over last year).

Top cities of choice include London, New York, Tokyo and Paris, the report said.

In the Americas region, office real estate remains attractive in various markets such as New York and Boston in the U.S., as well as in Toronto and Vancouver in Canada.

“As competition for core assets heat up, investors should not be surprised to be outbid,” the report noted.

What remains to be seen is how much prices will be discounted, among other factors. Said the report, “Large bid-ask spreads is likely to diminish market activity short-term, but we expect markets to reconcile on pricing by 2023.”

The rising cost of construction was also a major concern for the real estate sector, with 80% of investors citing the issue. This was tied to strong demand for development, for example, leading to construction costs “clearing weighing heavily” on respondents’ minds.

What might help is “tightening supply side conditions” that reinforce existing values, as well as innovation in methods of construction that aim to solve bottlenecks and support sustainability.

The Colliers research also noted how investors were looking for more ways to strengthen and diversify their portfolios, looking at specialized real estate areas such as data centres, life science facilities, and affordable and student housing.

“The path to success for investors will come from effective joint ventures with partners that have operational knowledge, local expertise and skills in related sectors and assets,” the report said.

This was the second edition of Colliers annual global outlook for property investors. Alongside the survey, regional capital markets experts were interviewed.

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

3 days ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

4 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

4 weeks ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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