Logistics
: India


By 2015, annual revenues from India’s logistics industry will hit €300bn, three times the earnings for 2008. Fuelled by growth in retail and manufacturing, a build programme is badly needed, with Mumbai, Kolkata and Chennai expected to be home to new logistics parks, says Cushman & Wakefield. Gurgaon, Vizag and Nagpur are also promising locations. But there are challenges: India’s logistics system is “fraught with inefficiencies” says Cushman, with cargo taking 19 days to clear ports compared with three in Singapore.


Offices: 
South Korea


South Korea looks a good prospect for short-term profits, as foreigners rush to unload commercial real estate holdings, to secure cash during the ongoing credit crunch. A number of Western banks are selling up and analysts believe distress sales may offer some bargains. However, this is a volatile and high risk market.


Hotel and leisure
: Albania


Europe’s poorest state offers enormous potential as a holiday destination says Michala Holm, senior associate at the hotel and leisure team of agent King Sturge: “It has a beautiful coastline, it’s close to Italy and it‘s completely unspoilt.” Holm believes Albania should start with resorts and spas to give it a destination feel 
and marketing angle. “But don’t forget Europe’s east,” she says. “Uzbekistan, Kazakhstan 
and Azerbaijan all have a desperate need for business hotels.”

Infrastructure: 
North-west England


“If I was looking for an investment I’d go for the public sector,” says Noel Manns, principal at European property fund manager Europa Capital. “After all, government money is the one safe call at the moment.” Just such an opportunity for equity backers and infrastructure funds might soon become available if Peel Holdings — owner of Manchester and Liverpool airports and Manchester’s mega-mall The Trafford Centre — gets its way. At the beginning of September, John Whittaker, the chairman of Peel Holdings, announced his €63.5bn Ocean Gateway vision: a phased, 30-year master plan to regenerate vast swathes of north-west England. The western end of the Ocean Gateway would be anchored by Peel’s €12.7bn Liverpool Waters and Wirral Waters proposals to provide Liverpool with a waterfront to rival a city like Vancouver. MediaCityUK, Salford Quays and Trafford Quays would be situated at the eastern end of the master plan, which will also encompass the Manchester Ship Canal.

Finance: Debt buying


If you thought that the days of complex financial manoeuvres was over in the post-2008-banking-collapse era then think again. With credit in such short supply alternative lenders are entering the market, taking over the debts owed to investors rather than buying into property directly. For example, GE Real Estate has spent more than €4.6bn on pan-European loan books and Michael Rowan, managing director of GE Real Estate UK, says the company sees “value in this type of transaction”. Indeed, the likes of GE are keen on these deals because it allows them to take their pick of that debt backed by the strongest covenants while reducing their direct exposure to capital depreciation of property. Morgan Stanley estimates that around €25bn of commercial property loans will have been refinanced by the end of the year.

Europe: Russia 


Russia’s 11 Millioniki — the cities in addition to Moscow and St Petersburg with populations of over a million — continue to offer opportunities. However, investing in Russia is not for the faint-hearted, says Robin Goodchild, international director and head of European strategy, LaSalle Investment Management. “The weight of money chasing higher returns has misunderstood and underpriced risks such as liquidity, political uncertainty, transparency, and application of the rule of law over and above traditional real estate investment risks. We believe pricing has not yet adjusted sufficiently to compensate.”

Investment: 
Sub-Saharan Africa

Property values in Angolan capital Luanda have skyrocketed amid an oil-fuelled economic boom following the end of a 27-year civil war in 2002. A shortage of modern buildings coupled with a a growing demand for housing from foreign workers will bolster prices, while the Bay of Luanda is getting a €2bn facelift that will spawn hotels and apartments. Funds have been attracted elsewhere in the region, too: last year, South Africa’s Actis invested €25m to open Ghana’s first shopping mall; Capitalworks Investment Partners is creating a €630m fund, which will start by buying eight retail and office properties in South Africa, Zambia, Mozambique and Mauritius; and Rutley Capital Partners, Knight Frank’s fund management division, has set up the first fund for commercial, targeting property in Kenya, Tanzania, Botswana, Zambia and Uganda.

Upmarket residential: Mumbai


London-based Galliard Homes managing director Stephen Conway made his money in London’s Docklands during the early 1990s recession when he invested just as everyone else was bailing out. He might be about to do just the same all over again in Mumbai. House prices in the Indian city are falling following a directive from Reserve Bank of India to restrict bank lending. Local estimates are for a 20%—30% fall in the Mumbai metropolitan region until April 2009. Conway, believes there is a market for upscale residential development for affluent European Indians looking for Western class second homes back in their native country and has teamed up with octogenarian property entrepreneur Jack Petchey to develop their first scheme in Mumbai. Should it get off the ground Galliard and other Western house builders would offer the sort of guaranteed rental income, buy-to-let deals missing in the local investment environment, which currently lacks transparency. Conversely, UK house builder Berkeley Group has been promoting its London projects in India following advice from Jones Lang LaSalle, which predicts that €12bn—€18bn could be spent by Indians on UK residential property in the next decade. 


New investment: IREITs


In July, Singapore-based Cambridge Industrial Trust announced its intention to become the first sharia-compliant real estate investment trust (REIT) and the world’s first listed industrial Islamic-REIT. A REIT wraps up a portfolio of properties into a tax-efficient bundle, with investors receiving profits from rent and capital appreciation. Sharia-compliance enables Middle Eastern investors to put money in without worrying whether the investments go against the Islamic code of ethical business conduct. Consequently, the IREIT will gain access to capital from some of the most cash-rich countries in the world, which might otherwise feel unable to invest. Once listed, private investors can buy shares in an IREIT, with the value of the IREIT largely reflecting the market’s perception of the value and desirability of its property portfolio.

Latin America: Panama


While the impact of the US crisis is spreading through Latin America and is threatening to derail the modest gains in many of its emerging economies, Panama remains bullish. Despite tumbling global stock markets, the Panama Canal raised €1.8bn for its expansion and the IMF expects Panama to become Latin America’s fastest-growing economy next year. Residential real estate demand is strong thanks to Venezuelan interest, while Panama City’s hotels are full of Latin Americans fed up with tight travel security in the US.