Data centers, infrastructure REITs return 22% in first half of 2017 | China Investment Corp. discloses 15.5% stake in TPG | The benefits of adding real estate equities to a portfolio
July 25, 2017
The daily source on REITs and real estate investment
The rise of e-commerce is fueling growth in REITs that own cell towers and data centers, as evidenced by Crown Castle International's proposed $7.1 billion acquisition of Lightower Fibre Networks and Digital Realty Trust's planned acquisition of DuPont Fabros Technology in a $7.6 billion transaction. Share prices are reflective of this trend, with total returns from data centers and infrastructure REITs both rising 22% in the first half of this year, according to NAREIT.
Sovereign wealth fund China Investment Corp. has disclosed that it owns a 15.5% stake in a commercial real estate lender formed by TPG. CIC is increasing its exposure to private equity and real estate, as illustrated by last month's $13.8 billion deal to acquire Logicor.
Investments following socially responsible or sustainable strategies have reached $23 trillion, with the strategy especially attracting proponents in Japan, China, New Zealand and Australia. While growth is continuing, the pace of growth has slowed over the past two years.
With short-term interest rates rising, businesses are asking banks to raise the rates on their deposit accounts -- requests that banks are accommodating. The average interest the largest banks paid in the second quarter rose to 0.34% compared to 0.26% a year ago, according to Autonomous Research -- the highest level in four years and an increase that bankers say is due to business depositors.
Continued, moderate job growth has kept the real estate cycle in a growth phase, says Glenn Mueller, a professor at the Burns School of Real Estate and Construction Management at the University of Denver. "I don't really want a boom, and I don't think we're going to get one," he says.
Large inflows into French retail funds investing in commercial real estate are causing property prices in Europe to rise to unsustainable levels, according to Fidelity International.
The increase of office trophy product in the Washington, D.C., area is skewing the market's supply-demand equilibrium, according to JLL's Skyline report. The market has recorded 122,000 square feet of occupancy gains over the past year, an annual decline of 71%.
Some high-profile companies have rolled back remote-work arrangements as they seek greater collaboration among employees. The transition back to an office environment can be a difficult adjustment for workers who are used to telecommuting.
You are not here merely to make a living. You are here in order to enable the world to live more amply, with greater vision, with a finer spirit of hope and achievement. You are here to enrich the world, and you impoverish yourself if you forget the errand.
