Real Estate in the Far East Dr. Karl Pilny STEP Conference Zurich 2 October 2015 1
Markets and Makers in Hong Kong, Mainland China and Singapore Markets Domestic market in Singapore reaching its peak. China s market entering an adjustment period! Chinese and Taiwanese insurance companies are likely to be more active in overseas real estate markets given lack of opportunities and low yield levels for prime core assets in their domestic market 25/09/2015 2
Markets and Makers in Hong Kong, Mainland China and Singapore Makers Public Equity REITs, e.g, First Reit, Mapletree Greater China Commercial Trust, Cambridge Industrial Trust, IREIT Global (33 REITs are listed in Singapore as of the end of March 2015); Sunlight Real Estate Investment Trust, GZI REIT (Hong Kong); first Chinese REIT listed in 2014 Pension funds, e.g. APG Investments Asia Ltd, CPP Investment Board Asia Inc, (Hong Kong), National Social Security (China), Central Provident Fund (Singapore) Insurance companies, e.g. Sunshine Insurance, Anbang Insurance Group, Ping An Life Insurance, China Life Insurance, Cathay Life Insurance (China) Institutional Investors, e.g. CIC, SAFE Investment Company (China), HKMA (Hong Kong), GIC, Temasek Holdings, Keppel Land (Singapore) 25/09/2015 3
Potentials and Structures of Property Transactions Asset Deals or Share Deal Tax-driven decision Also influenced by macroeconomic structures such as liquidity and market-cap REITs as special real estate investment structures 25/09/2015 4
Issues of Investments in Far East Real Estate Build and hold strategy by Asia construction companies As a Consequence: extremely difficult for investors to find investment opportunities in key locations in China, Japan, Singapore and South Korea Investors seeking second tier locations investment opportunities in domestic market (higher risk) or invest abroad European market (UK, Germany, Spain, France) in focus 25/09/2015 5
Main Investors and Vendors how they tick and how to deal with them Diversification Prefer low-risk products Gateway-cities are the focus of demand Commercial property investments in key locations are Asian's favorite Streamlining the procedures in investing in property abroad European Cities are seen undervalued! Also Euro is currently weak! Liberalization of domestic law allow to invest abroad Investor Real Estate Volume ( ) Year Country China Life Insurance Canary Wharf Tower 977 mill 2014 UK Samsung SRA Asset Management Silberturm Frankfurt 450 mill 2014 Germany Ping An Insurance Tower Place 420 mill 2014 UK IREIT Global Several Office Properties in Germany 224,5 mill 2014 Germany 25/09/2015 6
Contact Details Dr. Karl Pilny Of Counsel Real Estate, Private Equity D +49 30 2 64 73 946 E karl.pilny@dentons.com Dr. Karl Pilny is an Of Counsel in Dentons' Berlin office. He focuses on private equity and real estate transactions regarding German and Asian markets. Further to corporate and property finance, he has substantial experience in the IT, media, telecommunications and energy sectors. Experience Advising multinational clients on foreign direct investments, mergers and acquisitions and real estate projects in Asia Advising numerous Chinese, Japanese, Korean and Indian companies on several mergers and acquisition projects in Europe and Germany Advising a variety of foreign investors as well as financial institutions on the acquisition and re-financing of real estate acquisitions in Germany Representing numerous Anglo-Saxon and Asian investors on real estate investments in Germany, including large portfolio deals 25/09/2015 7
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