First-year Wisconsin Real Estate MBA students will travel to Cannes, France next week to attend MIPIM. To prepare for one of the most anticipated international real estate events of the year, our students have been doing research and hearing from leading professionals in the industry on how to get the most out of the trip. In this entry in our series Meet Our Current Students, Julia Xia shares her preparations:
It’s only one week away from MIPIM - the world's premier real estate event. All of the first-year Wisconsin Real Estate MBA students are going, and we are busy getting prepared for this important event. One bit of homework that we’ve done is research current hot topics in global real estate, and then present the research to our classmates and share our findings. These topics include, but are not limited to, China’s real estate capital, the emerging real estate market in Middle East, open-ended and close-ended funds in Germany, and sovereign wealth funds.
One particularly interesting topic is the real estate capital flows from China to Europe and the U.S. (The Many Ways Chinese Capital Is Entering US Property Markets, WSJ.com (subscription), 10/12/10) Chinese capital has been very active and powerful in the global real estate market in recent years. (Chinese Investors, Lenders, Quietly Penetrate Foreign Markets, Investment & Pension Funds Europe (login required), 12/7/10) The major sources of capital are the government (sovereign wealth funds like China Investment Corp.), institutional investors and wealthy individuals. For example, $62.6 billion of Chinese investment occurred in U.S. commercial real estate during 2010. The forms of investment include equity investment, debt investment, buying property, buying real estate financial products such as loan portfolios and direct real estate development. The large amount of foreign currency reserves, the domestic inflation pressure and the appreciation potential of RMB are the major forces driving Chinese capital to invest in the global real estate market. Recently, the policy loosening capital exchange restrictions will bring more Chinese capital to the global real estate market.
Another topic I found very interesting is the real estate market in the Middle East. The region can be categorized into three types of markets: stable and more open markets such as Turkey, UAE and Qatar; markets in revolution and conflict such as Tunisia, Egypt and Libya; and government-controlled investment markets such as Saudi Arabia and Iran. Out of these markets, Turkey seems to be the most emerging and booming real estate market. Istanbul ranked as the number 1 city for economic growth in 2010. (Istanbul Favorite European City for Property, Bloomberg, 2/3/11) The economy and the employment rate increased 5.5% and 7.3% respectively in 2010, making it an attractive market for global real estate investment.
MIPIM will be great, just to get connected with the most influential real estate professionals. We are trying our best to get ready to learn, to share and to connect at the event. Hope to see you there!
Julia Xia is a first-year MBA student in the James A. Graaskamp Center for Real Estate. Formerly a real estate consultant and asset manager in Beijing, Julia graduated from Peking University with a bachelor's degree in finance and banking.
The Wisconsin Real Estate Viewpoint will be reporting from MIPIM next week! Check back for updates and key takeaways from all the sessions! You can also follow us on Twitter @UW_GraaskampCtr and on Facebook.
Also, be sure to stick around for the wrap-up keynote presentation at MIPIM on Friday March 11 at 10:00 am (local time). Prof. François Ortalo-Magné, Robert E. Wangard Chair in Real Estate, and Philippe Tannebaum, IEIF, will deliver an overview on Real Estate Investment Post-Crisis: What Have We Learned? What Next?