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Experts suggest ways to see opportunities in times of crisis
Experts in the international real estate market predict that the global economic turmoil is likely to continue during the current year, but, even during these volatile times, there are attractive investment opportunities for those seeking to invest.
The Strategia Investment Company has organized a seminar at the Sheraton Hotel in Kuwait, which was the first of its kind. The seminar focused on global real estate investments, its current issues and outlook in the short and medium terms.
The one-day seminar saw the participation of several professionals from local and private real estate companies, and the individuals seeking to invest in real estate sector, apart from several bank officials from within and outside Kuwait.
The Seminar hosted three Senior Investment Managers, who were specialists in the global real estate sector, namely, Kim Redding from Brookfield Redding, Russel Bernard from Westport Capital and Peter Hobbs from RREEF, the real estate arm of Deutsche Bank.
The seminar discussed the current state of international real estate sector, the reasons for the current economic crisis, the future outlook of these markets in the short and medium terms.
Kim Redding of Brookfield Redding, revealed about the investment policy adopted by his company and the strategies followed by them for investment in real estate assets, including conventional and long-short hedged strategies. These strategies have helped in safeguarding the assets of clients’ from severe negative impacts of the current financial turmoil, he explained.
According to Redding, the turmoil and volatility in the financial and real estate markets are sure to continue at least till the end of the year. Due to credit crunch, access to liquidity will be severely affected during 2009, he predicted. However, the collaboration of the governments with central banks around the world, may solve the current financial issues, and marks a positive step ahead, which may contribute by reducing the damage caused to investors so far, around the world.
Redding’s advice to investors is to focus on real estate companies with strong balance sheets and good management teams, capable of sustaining and growing despite tough market conditions.
Thereafter, Peter Hobbs from RREEF also confirmed that the crisis is a global one, and the main reason behind such a scenario is the huge increase of leverage across all asset classes, including the real estate, and the weak regulation methods adopted by governing bodies of all countries across the globe.
The present situation is a serious and new one, never witnessed before. For the first time in history, the Central Banks around the world are working together swiftly, aiming to reduce the impact of the crisis, Hobbs pointed out.
Hobbs expects the sharp recession to continue even during 2009. He thinks that we will witness early signs of recovery in 2010, followed by full recovery during 2011 and 2012.
Russel Bernard from Westport Capital, whose company manages assets worth more than $700mn, said that this is the best time to focus on distressed opportunities, given the low valuation levels across all asset classes.
At the end of the Seminar, Sean Evers from Bloomberg, initiated a discussion panel amongst the three speakers, and spoke about matters of interest to real estate investors.
The Seminar is appropriately timed, when investors are keen to learn about the current state and outlook of real estate and financial markets.
The Strategia Investment Company plans to organize more such seminars in future and share its knowledge with local investors about the latest developments in local, regional and international financial markets.
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