{"id":1004257991,"date":"2018-08-15T11:47:43","date_gmt":"2018-08-15T19:47:43","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004257991"},"modified":"2022-12-08T14:44:59","modified_gmt":"2022-12-08T22:44:59","slug":"global-guidebook-to-reit-investing","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/global-guidebook-to-reit-investing\/","title":{"rendered":"Global Guide to REIT Investing"},"content":{"rendered":"<p>By Stuart Eisenberg<\/p>\n<div id=\"attachment_1004134313\" style=\"width: 510px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1004134313\" data-attachment-id=\"1004134313\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/reit-column-no-alarm-bells-after-minimal-interest-rate-hike\/eisenberg-stuart-assr-mgn-ptr-nyc-4\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/01\/stuart-eisenberg2.jpg\" data-orig-size=\"800,632\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;8&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;Canon EOS 5D Mark II&quot;,&quot;caption&quot;:&quot;Eisenberg, Stuart.assr mgn ptr.NYC&quot;,&quot;created_timestamp&quot;:&quot;1411369468&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;85&quot;,&quot;iso&quot;:&quot;100&quot;,&quot;shutter_speed&quot;:&quot;0.008&quot;,&quot;title&quot;:&quot;Eisenberg, Stuart.assr mgn ptr.NYC&quot;,&quot;orientation&quot;:&quot;1&quot;}\" data-image-title=\"Eisenberg, Stuart.assr mgn ptr.NYC\" data-image-description=\"\" data-image-caption=\"&lt;p&gt;Stuart Eisenberg&lt;\/p&gt;\n\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/01\/stuart-eisenberg2.jpg?w=800\" class=\"wp-image-1004134313\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/01\/stuart-eisenberg2.jpg\" alt=\"\" width=\"500\" height=\"395\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/01\/stuart-eisenberg2.jpg 800w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/01\/stuart-eisenberg2.jpg?resize=300,237 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2016\/01\/stuart-eisenberg2.jpg?resize=768,607 768w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><p id=\"caption-attachment-1004134313\" class=\"wp-caption-text\">Stuart Eisenberg<\/p><\/div>\n<p>Whether a U.S. REIT is courting international investors or investors are seeking acquisitions abroad, the landscape for foreign direct investment (FDI) is rapidly evolving.<\/p>\n<h2><strong>State of FDI in U.S. real estate<\/strong><\/h2>\n<p>Within the domestic market, the most notable shift is the decline in Chinese investment, historically the largest source of FDI. Chinese investors made $54.1 billion worth of acquisitions and $5.3 billion in dispositions since 2007, according to Real Capital Analytics. While China still accounted for the largest group of foreign buyers last year, Chinese investment in U.S. commercial real estate fell 30 percent.<\/p>\n<p>This year, Chinese investors became net sellers of U.S. commercial real estate, selling off $1.3 billion worth of properties, which Real Capital Analytics notes is more than any single year before. The disposition trend is partly driven by Chinese investors\u2019 financial distress, but it is also partly a consequence of China\u2019s capital control restrictions on outbound investment.<\/p>\n<h2><strong>Rules of the road for international investors<\/strong><\/h2>\n<p>As U.S. commercial real estate and its investor pool continue to shift, <a href=\"https:\/\/www.commercialsearch.com\/news\/global-reits-confident-theyll-weather-economic-storm\/\">global markets are changing<\/a> just as quickly. For U.S. investors eyeing international properties, it\u2019s critical to keep in mind the diverse rules, regulations and nuances of a new market. BDO\u2019s Foreign Property Ownership report offers an in-depth regulatory primer for foreign investors.<\/p>\n<p>Here\u2019s a look at a few notable markets:<\/p>\n<p><strong>Canada<\/strong><\/p>\n<p>Canada has seen substantial activity in recent years by foreigners looking to invest in residential and commercial real estate. Canadian REITs are performing well, with their total market capitalization increasing from CAD $42.3 billion in 2012 to CAD $57.7 billion in 2017, according to S&amp;P Dow Jones.<\/p>\n<p>Canada generally encourages foreign ownership of real estate, and most provinces treat foreign purchasers of residential and commercial real estate the same as residents. Some change is likely on the horizon, however. Canada announced plans to introduce an annual speculation tax to discourage foreign and domestic speculators from removing properties from the \u201clong-term housing stock,\u201d meaning the properties are not owner-occupied or qualifying long-term rental properties.<\/p>\n<p><strong>Singapore<\/strong><\/p>\n<p>DBS Group Research predicted Singapore REITs were at the start of a multi-year upturn at the end of 2017. An analyst note states, \u201c<em>We remain bulls in the Singapore property market as we believe that most real estate sub-sectors have turned the corner on the back of improving demand-supply dynamics. Supporting a more buoyant outlook for landlords (REITs) and developers is abating supply risk, which will drive prices and rentals higher as the year goes by.<\/em>\u201d<\/p>\n<p>With a rapidly expanding population and tight supply, the Singapore government has taken steps to control inbound investment. All foreign investors are required to apply for approval before purchasing properties.<\/p>\n<p><strong>Malaysia<\/strong><\/p>\n<p>In Malaysia, which adopted the REIT approach in 2005, CBRE recently noted that the pursuit of megaprojects and high-value economy should continue to catalyze business activities and bring about new growth drivers and opportunities.<\/p>\n<p>The country\u2019s regulatory environment is also somewhat lenient when it comes to foreign investors, as long as minimum requirements are met.<\/p>\n<h2><strong>What the future holds<\/strong><\/h2>\n<p>A real estate fund\u2019s most valuable asset is in-depth knowledge of its target real estate markets. This leads to geographic concentration in REITs\u2019 portfolios, with many specializing in certain regions and the majority staying within U.S. borders. To bridge the knowledge gap in a new market, investors often establish joint ventures with local real estate groups. As foreign real estate sectors heat up and <a href=\"https:\/\/www.commercialsearch.com\/news\/reit-results-3\/\">REITs continue to search for yield<\/a>, U.S. REITs are likely to adopt the joint venture model and become more active international investors.<\/p>\n<p><em>Disclaimer: Information in BDO\u2019s Foreign Property Ownership publication is for reference only. Taxpayers should consult with BDO prior to making foreign investments, as several jurisdictions have tax legislation pending.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stuart Eisenberg, assurance partner and leader of BDO\u2019s Real Estate &amp; Construction practice, delves into the diverse rules, regulations and nuances of investing abroad.<\/p>\n","protected":false},"author":1263,"featured_media":1004134313,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21825,21783,23891,21684],"tags":[33206],"class_list":["post-1004257991","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","category-investment","category-national","category-viewpoint","tag-bdo-usa"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - 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