Australians help fuel London real estate boom

THE London housing market is defying global trends and experiencing a booming recovery and Australian buyers are partly to thank.

Three reports released in the UK this week show prime central property prices up by as much as 49 per cent since 2009, when the recession took a stronghold following a price peak the previous year.

While in Australia the property market remains subdued, it appears Aussie buyers are looking to countries like the UK to get a bigger bang for their buck and make the most of foreign, recession-wracked sales.

In the UK, the Knight Frank report found 41 per cent of buyers in London were from outside the UK. Buyers from Russia, India, Italy and the US topped the list, with Australians coming in seventh position.

It found in 2008 its agency sold prime London real estate to 36 nationalities while in 2011 it doubled to 62.

A Savills report also found a growing trend of foreign buyers of London properties over the past 12 months particularly after prices bottomed out. And London’s west was still a favourite with Aussies who were making the most of the exchange rate.

“There has never been a better time for Australians to look to purchase a London residential property from a currency perspective,” Savills Fulham agent Charlie Bubear said.

“There are certainly active buyers in the market and we have noticed an uplift in requirements from Australian buyers compared to five years ago.” He added that the biggest buyers were still from the eurozone as well as China and Russia.

EC Harris, a global built asset consultancy group, said London was still proving to be a magnet for investment particularly from pension funds looking for long term stable investment returns away from the volatile markets.

The foreign demand for property, particularly from the “Asian region” including Australia, was being credited with a $58.5 million development boom in the capital’s top suburbs.

Source: http://www.news.com.au/realestate/buying/australians-help-fuel-london-housing-boom/story-fndban6l-1226471438591 Read more: http://www.news.com.au/realestate/buying/australians-help-fuel-london-housing-boom/story-fndban6l-1226471438591#ixzz268iBOUqS

Abu Dhabi fund eyes Indian real estate sector

Abu Dhabi Investment Authority (ADIA), one of the world's biggest sovereign wealth funds, plans to invest directly in Indian real estate in an effort to diversify from its current strategy of ploughing money into the country through realty or private equity funds, sources familiar with the matter said.

ADIA's investments in Indian real estate to date total $400-$500m, largely through property and private equity funds, and the fund is now scouting for direct investment opportunities, one of the sources said.

The sovereign fund, whose assets range from Citigroup bonds to a stake in Britain's Gatwick airport, is close to hiring a country-dedicated fund manager from a large private equity firm to look for real estate opportunities in Asia's third-largest economy, the sources said.

ADIA recently invested $50m in an India-focused real estate private equity fund run by Red Fort Capital, one of the sources said. In January, Red Fort said it planned to raise $500m for its second India-dedicated property fund, of which it had already raised $80m.

Red Fort officials could not immediately be reached for comment.

The sources did not give the name of the person ADIA is hiring and spoke on condition of anonymity as the matter has not been made public yet.

A spokesman for ADIA in Abu Dhabi declined to comment.

Large sovereign wealth funds including Singapore's Government Investment Corp (GIC) are keen to invest in Indian property as the country's cash-strapped developers seek funds to kickstart development and reduce debt.

Debt held by Indian developers hit 1.8trn rupees ($35.74bn) as of September 2011, according to a report by Infrastructure Development Finance Corp.

International private equity firms, which have invested $13bn in the Indian real estate sector since 2005, are expected to exit from up to $5bn of investments over the next couple of years, according to property consultancy Jones Lang LaSalle.

This will widen the funding gap for developers at a time when home sales are low and banks are cautious about lending to the sector.

GIC has been in talks with several Indian developers, including oil-to-steel conglomerate Essar Group's real estate arm, Equinox Realty, and developer Godrej Properties, to invest in their projects.

ADIA has expressed "keen interest" in investing in the country, India's Trade Ministry said in a statement in January, adding that it had agreed to speed up the creation of a joint working group to facilitate the fund's investment.

Real estate investments constituted between 5 and 10 percent of ADIA's overall global portfolio, according to its 2010 annual review. The real estate division is run by Bill Schwab, who joined the fund in 2009 from JPMorgan Chase.

North America and Europe accounted for a major chunk of the ADIA's investments, with 60 percent to 85 percent poured into those regions. Emerging markets constituted about 15 percent.

The fund returned 7.6 percent on an annualised basis over a 20-year period as of December 31, 2010, it said in its review.

While the ADIA does not disclose its net worth, analysts estimate its assets to range between $400-$600bn.

Source: http://www.arabianbusiness.com/abu-dhabi-fund-eyes-indian-real-estate-sector-449155.html