April 27, 2012 by Thomas Su

The REITs and Property Funds are major investors in the real estate opportunities; many new institutions are also looking to invest into residential properties and land-bank deals.

This article summarizes some types of REITs and Property Funds you can approach.

American and Canadian REITs

The Real Estate Investment Trusts (REITs) market is a very significant capital market in Canada and United States.

Canadian REITs have participated in some of the large deals in the United States recently, especially in the commercial properties sectors, and the trend is likely to continue for many more years.

The US REITs had consolidated in 2009-2011, with the surviving REITs in much better shape and well funded. These REITs had been busy acquiring more assets or taking over smaller property funds as well. Some REITs are also diversifying and now investing into other assets including residential, education, medical or IT facilities.

European REITs and Property Funds

European REITs and Property Funds were busy investing in American properties for a while, but most of them are now more focused in investing in European opportunities because of the availability of many quality properties at discounted priced.

Russian investors have been particularly active in European markets as well the Middle Eastern investors acquiring commercial and retail assets.

Australian REITs and Property Funds

Australian property investors were once ranked as one of the top 10 investors in the US commercial properties. The financial crisis had impacted on the Australian REITs, and some of them had been forced to sell properties to reduce their loan portfolio.

Australian real estate investors are now coming back, many institutions have launched international property funds to acquire commercial and retail assets; as well as some industrial assets. Australian individual investors are also actively acquiring US residential properties, as US residential properties are substantially cheaper than Australian properties.

Pension Funds and Superannuation Funds

Two types of funds are leading investments – individual pension funds that invest in real estate opportunities; they often like to include real estate in their investment portfolio because of the predictable income nature.

Sovereign or state/provincial pension funds are also investing into various large-scale properties; such as those from Canada, or Korea and the Middle East. Korean sovereign wealth funds have invested in several prestigious office buildings worldwide as the rental yield is much higher than in Asia.

Asian REITs / Property Funds

The REITs market is still at a relatively early stage in Asia, apart from Japan. Asian REITs and property funds are increasingly looking to invest in international opportunities.

Chinese investors are concerned about continuing softness in China’s overheating real estate market, and many investors are switching their investments into offshore opportunities.

Some Asian real estate developers or construction firms are also setting up their own investment funds to acquire and develop international opportunities – particularly hotels & resorts in South East Asia, United States and some parts of European markets.

Why raising capital from REITs is a good idea?

REITs are listed entities, when they identify suitable acquisition or development projects, they can raise additional capital from investors, this means, there is always an element of liquid capital available from investors, if the opportunity is a good opportunity and if the timing is right – then they can also announce placements to raise capital to make acquisitions or reduce debt.

Their investment mandate and assessment criteria are also relatively more flexible compared to the banks, REITs can provide you equity investments or through debt-financing as well.

There are hundreds of REITs listed in US & Canada, and thousands if you include international markets. Some markets have REITs that invest in international opportunities and should be considered by North American property developers.

Some Tips to find these REITs and Property Funds

The following are good starting points to find REITs and property funds for your opportunities:

1. Check out public listed REITs around the world.
2. Check out various property groups, construction groups, property developers – many of them have their own property investment subsidiaries or funds.
3. Check out real estate private equity funds – some invest in Fund-of-Funds, some also invest in projects directly.
4. Check out stockbroking firms – as some firms have specialized funds for high-net wealth investors to participate in private real estate projects.
5. Connect with executives of real estate groups – many have their own family funds investing in real estate projects or as developers.
6. Connect with potential investors with business immigrants – this is particularly a good strategy for the United States, connecting with EB-5 investors, as investment capital and project are the criteria to qualify for immigration.
7. Check out on various pension funds and sovereign wealth funds if they invest in real estate opportunities.
8. There are many private property syndicates – these are the hardest funds to identify as information are often not public available. The best way would be to use social media networks to find these funds.
9. Local accounting firms or financial planning firms sometimes have private investment groups that are looking for real estate opportunities, some of these funds can build up to $5m or $10m in funds under management.

Useful Information

The following are useful resources for real estate professionals.

Global Real Estate Investors Guide

Global Real Estate Investors Guide is our report specifically designed for companies seeking for capital relating to real estate developments, expansion, acquisitions.

This Guide contains 2 parts:

(1) Global Property Companies which include major real estate companies in American region, Europe and Asia Pacific

(2) Financial Institutions that provide funding to real estate projects. The guide includes company description, key contact people, contact details.

Asia Pacific Capital Providers Guide

Asia Pacific is a fast emerging market for capital. In this guide, we have compiled a large number of venture capital and private equity firms from the Asia Pacific region.