<!--QuoteBegin-Rambhai+Feb 12 2008, 09:07 PM-->QUOTE(Rambhai @ Feb 12 2008, 09:07 PM)<!--QuoteEBegin-->A potential concern is that property ownership is falling. Also known as capitalization rates, yields have dropped over the past three years to near-historic lows. While this is the natural outcome of higher prices capital rates are the ratio of a propertyâs yearly income to purchase it can also indicate that operating income hasnât kept pace with the higher prices. This can make real estate less attractive to investors primarily interested in the cash stream.
There was huge overbuilding in the late 1980s which really hurt the market when we had a recession. But for the most part Real Estate in Kerala did not get overbuilt before the last downturn. Nor do developersâ plans seem excessive. One reason is that banks have become more conservative in their lending, requiring developers to show that their buildings will be fully leased. Another is that the soaring price for concrete and steel has made new construction costly. While higher rates can dampen the real estate market by raising borrowing costs, rates remain at historic lows. Relative to historic pricing, real estate is pretty expensive, and thatâs something that should make everyone think hard. The Federal Reserve has signaled its intention to increase rates gradually; about a quarter points per quarter, but this may not be enough to ward off buyers.
Largely because of this comparatively attractive income stream, the institutional investors are unlikely to abandon the market. This may be true even if cap rates fall farther. Because institutional investors often pay with cash, they can accept lower cap rates without interest payments, their effective yields are higher that those of more leveraged buyers. Professor says that TIAA-CREF has no plans to reduce its exposure to real estate. âWe donât play the short game. For us, the question is, âWhat makes sense for our participants?â And the answer is to stay well diversified and active in all markets.â
Thereâs always the risk of some broader meltdown that would bring down the real estate market along with stocks and bonds. In this case, an investor would be wise to be in the asset thatâs the least overvalued to begin with i.e., commercial real estate.
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http://www.fatpitch.biz/cgi-bin/f.cgi/psp/...03838.1026.html
http://www.secinfo.com/dGSc.v6t.htm
http://www.economist.com/displayStory.cfm?...788936&fsrc=RSS
http://www.j3sg.com/Reports/Stock-Insider/...=1&sortBy=value
ICICI holding
Abu Dhabi recently picked up an 8.1% stake in US chip giant Advanced Micro Devices, while Dubai International Capital, which is owned by the ruler of that booming city-state, said yesterday that it had bought into electronics giant Sony. It has also taken stakes in HSBC Daimler, US hedge fund manager Och-Ziff Capital Managementthe Indian bank Icici and Airbus parent Eads.
2007 was the year sovereign wealth funds put themselves on the map. In order to understand the evolution of SWFs, itâs obligatory to take a critical look at some of the landmark events of that important year. Expect to see more 2007 reviews, commentaries, and analytical pieces in the comings weeks. To kick things off, a review of the most newsworthy SWF deals of 2007:
* Dec. 24, 2007: Merrill Lynch says it will sell a stake in itself of at least $4.4 billion, and up to $5 billion, to Singaporeâs state-run Temasek Holdings. Temasek will hold less than 10 percent of Merrill and have no voting control. Merrill also agreed to sell a $1.2 billion stake to domestic investors
* Dec. 10, 2007: UBS AG announces that the Government of Singapore Investment Corp., a sovereign-wealth fund, is investing $9.75 billion for a 9 percent stake in the Swiss banking giant, while an undisclosed strategic investor in the Middle East is contributing $1.77 billion in UBS AG.
* Nov. 26, 2007: Abu Dhabi Investment Authority, the sovereign investment fund of the Gulf Arab state, acquires a 4.9 percent stake in Citigroup Inc., the largest U.S. bank, for $7.5 billion.
* Nov. 7, 2007: Central Huijin Investment Co., Chinaâs largest state-owned investment arm, acquires 71 percent of Chinaâs joint-stock China Everbright Bank for $2.7 billion.
* Oct. 29, 2007: Dubai International Capital, owned by Dubai-ruler Sheikh Mohammed bin Rashid Al Maktoum, acquires 9.9 percent outstanding equity stake in Och-Ziff Capital Management Group, a U.S.-based hedge fund, for more than $1.1 billion. Och-Ziff goes public in November on the New York Stock Exchange.
* Oct. 22, 2007: Chinaâs government-controlled Citic Securities Co. and U.S. investment bank Bear Stearns Cos. agree to invest $1 billion in each other for minority stakes that could be expanded. They will also operate a 50-50 joint venture in Hong Kong to offer capital markets services across Asia.
* Sept. 20, 2007: The Qatar Investment Authority, Qatarâs sovereign investment fund, acquires a 20 percent stake in the London Stock Exchange and nearly 10 percent of Nordic bourse operator OMX AB.
* Sept. 20, 2007: Abu Dhabi-based Mubadala Development Co., an investment arm of the Abu Dhabi government, buys a 7.5 percent stake of the management operations of one of the worldâs largest private-equity firms, Carlyle Group, for $1.35 billion
* July 23, 2007: China Development Bank, a Chinese state agency, agrees to pay $3 billion for a 3.1 percent stake in British bank Barclays PLC, and Temasek Holdings, a sovereign wealth fund in Singapore, agrees to pay $2 billion for a 1.77 percent stake in Barclays.
* July 13, 2007: Dubai International Capital purchases a 2.87 percent stake in one of Indiaâs largest banks, ICICI Bank Ltd., for $750 million.
* May 20, 2007: Chinaâs state investment company agrees to pay $3 billion for a 10 percent stake in U.S. private equity firm Blackstone Group LP. The Chinese investment company agreed to buy nonvoting shares in Blackstone concurrent with Blackstoneâs initial public offering.
* May 2, 2007: Dubai International Capital buys a undisclosed stake in British bank HSBC Holdings PLC.
http://sovereignwealthfunds.wordpress.com/...tional-capital/
There was huge overbuilding in the late 1980s which really hurt the market when we had a recession. But for the most part Real Estate in Kerala did not get overbuilt before the last downturn. Nor do developersâ plans seem excessive. One reason is that banks have become more conservative in their lending, requiring developers to show that their buildings will be fully leased. Another is that the soaring price for concrete and steel has made new construction costly. While higher rates can dampen the real estate market by raising borrowing costs, rates remain at historic lows. Relative to historic pricing, real estate is pretty expensive, and thatâs something that should make everyone think hard. The Federal Reserve has signaled its intention to increase rates gradually; about a quarter points per quarter, but this may not be enough to ward off buyers.
Largely because of this comparatively attractive income stream, the institutional investors are unlikely to abandon the market. This may be true even if cap rates fall farther. Because institutional investors often pay with cash, they can accept lower cap rates without interest payments, their effective yields are higher that those of more leveraged buyers. Professor says that TIAA-CREF has no plans to reduce its exposure to real estate. âWe donât play the short game. For us, the question is, âWhat makes sense for our participants?â And the answer is to stay well diversified and active in all markets.â
Thereâs always the risk of some broader meltdown that would bring down the real estate market along with stocks and bonds. In this case, an investor would be wise to be in the asset thatâs the least overvalued to begin with i.e., commercial real estate.
[right][snapback]78446[/snapback][/right]
<!--QuoteEnd--><!--QuoteEEnd-->
http://www.fatpitch.biz/cgi-bin/f.cgi/psp/...03838.1026.html
http://www.secinfo.com/dGSc.v6t.htm
http://www.economist.com/displayStory.cfm?...788936&fsrc=RSS
http://www.j3sg.com/Reports/Stock-Insider/...=1&sortBy=value
ICICI holding
Abu Dhabi recently picked up an 8.1% stake in US chip giant Advanced Micro Devices, while Dubai International Capital, which is owned by the ruler of that booming city-state, said yesterday that it had bought into electronics giant Sony. It has also taken stakes in HSBC Daimler, US hedge fund manager Och-Ziff Capital Managementthe Indian bank Icici and Airbus parent Eads.
2007 was the year sovereign wealth funds put themselves on the map. In order to understand the evolution of SWFs, itâs obligatory to take a critical look at some of the landmark events of that important year. Expect to see more 2007 reviews, commentaries, and analytical pieces in the comings weeks. To kick things off, a review of the most newsworthy SWF deals of 2007:
* Dec. 24, 2007: Merrill Lynch says it will sell a stake in itself of at least $4.4 billion, and up to $5 billion, to Singaporeâs state-run Temasek Holdings. Temasek will hold less than 10 percent of Merrill and have no voting control. Merrill also agreed to sell a $1.2 billion stake to domestic investors
* Dec. 10, 2007: UBS AG announces that the Government of Singapore Investment Corp., a sovereign-wealth fund, is investing $9.75 billion for a 9 percent stake in the Swiss banking giant, while an undisclosed strategic investor in the Middle East is contributing $1.77 billion in UBS AG.
* Nov. 26, 2007: Abu Dhabi Investment Authority, the sovereign investment fund of the Gulf Arab state, acquires a 4.9 percent stake in Citigroup Inc., the largest U.S. bank, for $7.5 billion.
* Nov. 7, 2007: Central Huijin Investment Co., Chinaâs largest state-owned investment arm, acquires 71 percent of Chinaâs joint-stock China Everbright Bank for $2.7 billion.
* Oct. 29, 2007: Dubai International Capital, owned by Dubai-ruler Sheikh Mohammed bin Rashid Al Maktoum, acquires 9.9 percent outstanding equity stake in Och-Ziff Capital Management Group, a U.S.-based hedge fund, for more than $1.1 billion. Och-Ziff goes public in November on the New York Stock Exchange.
* Oct. 22, 2007: Chinaâs government-controlled Citic Securities Co. and U.S. investment bank Bear Stearns Cos. agree to invest $1 billion in each other for minority stakes that could be expanded. They will also operate a 50-50 joint venture in Hong Kong to offer capital markets services across Asia.
* Sept. 20, 2007: The Qatar Investment Authority, Qatarâs sovereign investment fund, acquires a 20 percent stake in the London Stock Exchange and nearly 10 percent of Nordic bourse operator OMX AB.
* Sept. 20, 2007: Abu Dhabi-based Mubadala Development Co., an investment arm of the Abu Dhabi government, buys a 7.5 percent stake of the management operations of one of the worldâs largest private-equity firms, Carlyle Group, for $1.35 billion
* July 23, 2007: China Development Bank, a Chinese state agency, agrees to pay $3 billion for a 3.1 percent stake in British bank Barclays PLC, and Temasek Holdings, a sovereign wealth fund in Singapore, agrees to pay $2 billion for a 1.77 percent stake in Barclays.
* July 13, 2007: Dubai International Capital purchases a 2.87 percent stake in one of Indiaâs largest banks, ICICI Bank Ltd., for $750 million.
* May 20, 2007: Chinaâs state investment company agrees to pay $3 billion for a 10 percent stake in U.S. private equity firm Blackstone Group LP. The Chinese investment company agreed to buy nonvoting shares in Blackstone concurrent with Blackstoneâs initial public offering.
* May 2, 2007: Dubai International Capital buys a undisclosed stake in British bank HSBC Holdings PLC.
http://sovereignwealthfunds.wordpress.com/...tional-capital/