Exclusive: Property investors keen on U.S., Turkey; China stumbles: survey

NEW YORK Mon Jan 7, 2013 12:03am EST

A man photographs the skyline of Lower Manhattan in New York from a park along the Hudson River in Hoboken, New Jersey, December 28, 2012. REUTERS/Gary Hershorn

A man photographs the skyline of Lower Manhattan in New York from a park along the Hudson River in Hoboken, New Jersey, December 28, 2012.

Credit: Reuters/Gary Hershorn

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NEW YORK (Reuters) - The United States dominates the list of places that global commercial real estate investors would prefer to put their money this year, while China has lost some luster and Turkey has added sparkle, according to a survey of international investors.

For the first time since 2001, four of the top five cities that investors said they favor were in the United States, according to an annual survey that the Association of Foreign Investors in Real Estate (AFIRE) released Monday.

The survey reflected a sharply more optimistic view of the U.S. economy and property market for this year. Last year, 33 percent held a pessimistic view but 81 percent said they planned to increase their U.S. holdings this year.

In the ranking of global cities in which to invest, New York and London came in Nos. 1 and 2 respectively, as they did last year. But San Francisco rose to third from fifth and Houston, unranked last year, climbed to No. 5.

"Houston was a surprise to us," James Fetgatter, AFIRE chief executive, told Reuters. "San Francisco and Houston being in the top five global cities, it shows that this is where our people think the economy is going to revive. They believe these are where the drivers of the economy are going to be - in energy and tech."

Washington, D.C., while still a favorite, slipped to No. 4 from No. 3, reflecting investors' concerns about how federal budget reductions would affect employment, and therefore the demand for space, in that city.

The survey of the association's nearly 200 members was conducted in the fourth quarter 2012 by the James A Graaskamp Center for Real Estate, Wisconsin School of Business. AFIRE members have an estimated $2 trillion or more in real estate assets under management. Forty-two percent of the investors and 26 percent of the advisers are from the United States.

According to the AFIRE survey, the United States also held its spot as the country investors said provides the most stable and secure real estate investment. Canada, Germany, Australia and the UK followed in the same order as they did last year. Sweden, which was unranked in last year's survey, tied with the UK for fifth place.

The United States also held its spot as the country providing the best opportunity for real estate price appreciation, grabbing 55 percent of the vote. Second-ranked Brazil came in a distant second with 17 percent. The UK moved up to No. 3 from last year's No. 4. Turkey, which was ranked No. 9 last year, flew into fourth place.

CHINA FALTERS, EUROPE ALL BUT DISAPPEARS

China, which had been ranked No. 3 for price appreciation globally, was unranked this year, failing to receive one vote. Its cities also took a hit. Shanghai, ranked No. 5 last year, fell to 12th this year. Hong Kong, No. 8 last year, fell to 19th.

"Everybody is concerned about China's economy slowing, and there's a little uncertainty about the change in leadership," Fetgatter said.

Europe also did not fare well. About 80 percent of the respondents said they believed Europe would likely be in recession this year.

Within the United States, New York remained the No. 1 choice among investors. San Francisco displaced Washington, D.C., in No. 2 as the U.S. capital slipped to third, San Francisco's former spot. Houston was No. 4, up from seventh. Boston, last year's No. 4, was fifth.

Among emerging markets, Brazil once again was ranked No. 1. China repeated in No. 2. However, Turkey moved up to No. 3 from No. 7 last year. India, which had been third, slipped to No. 4 to tie with Mexico, which moved up from fifth.

(Reporting by Ilaina Jonas; Editing by Gary Hill)

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Comments (1)
AdamSmith wrote:
Excellent article.

This has been happening in the America for quite some time, and on very large scale. There is great inequality of wealth in most of the world. There, outside America, the wealth is usually obtained by connections to corrupt goverment, often family connections.

Thus the richest man in the world is not American, but rather Mexican. Thus the wealthiest people are found in the most corrupt countries. Thus the highest number of billionaires occur in Russia, who grabbed the public wealth through corruption as communism fell.

And the middle east oil countries have vast family networks of corruption, and some of the wealthiest in the world.

All those wealthy people have been buying up American real estate, through anonymous shell companies, as quickly as they can.

They are now landlords to many, many Americans.

In the United States wealthy Americans easily hide the trail of their black, ill-gotten money by using anonymous shell companies, managed by the most well known law firms on Wall Street or Main Street. Legal? Well, everybody does it.

The entire organized wealthy class, criminal and not criminal, hide their large-scale continuing operations with anonymous shell companies, usually LLCs (limited liability companies), or corporations. It’s amazingly easy.

The stakes are not millions of dollars, but rather trillions of dollars.

And it’s not just corrupt foreign families. It’s also large criminal organizations from Russia, China, Sicily, the Philippines, Brazil, Venezuela — you name it.

American law firms of even the largest size cater to anybody and everybody that has money, so you can be sure that any law requiring transparency of these anonymous companies will be fought tooth and nail by law firms. This is black money in America. The scale is huge. It is pervasive.

And, of course, it must be remembered that most members of congress are lawyers, and they can and do accept contributions from people acting through shell companies.

Excellent article. American real estate is truly the best investment for wealthy foreigners who want to hide their hot cash.

In the tax roll of every American city the evidence can be found. It is happening in all regions of America.

Jan 07, 2013 2:34am EST  --  Report as abuse
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