Making the most of property investment

With foreign purchasers dominating the commercial property market in Australia in 2015, Yardi has some ideas for overseas owners and managers wanting to keep up with the latest in property software tools.

Late last year, PricewaterhouseCoopers and the Urban Land Institute (ULI) released their annual report, Emerging Trends in Real Estate Asia Pacific. With an eye towards predicting real estate trends for 2016, the report’s authors collected opinions and analysis from over 300 industry experts, including investors, fund managers, brokers and consultants.

In Australia, commercial real estate continues to benefit from low interest rates, high competition for prime assets, and the influx of foreign money. The report’s authors point out that Sydney and Melbourne “are now the biggest real estate markets in Asia after Tokyo, with some US$10.2 billion in new capital invested in the first half of 2015”.

For buyers from overseas, commercial property investments in Australia are looking like a better option, especially in light of recent controversy over purchases of residential properties by foreign investors

In fact, some Australian brokers are already seeing a recalibration of foreign investment into commercial property. As one interviewee explains in the report, some Chinese private investors are “buying an old warehouse and getting it rezoned, then converting it to mixed-use apartments with a bit of ground-floor retail.” 

The report also points to “the strong inflows of Chinese tourists, particularly in Sydney and Melbourne” as the main reason the hospitality industry is seen as a safe haven for investment.

Industrial property is also receiving attention from overseas buyers, particularly the burgeoning logistics sector.  

One powerful way for foreign investors to make the most of their Australian and Asian property assets is to make sure that their property software tools are up to the job. Yardi has extensive experience in these types of software in the United States and is looking to introduce them to the Asia Pacific.

For investors choosing to push funds towards commercial property investments like hotels and mixed-use space, one key concern is the management of property services and associations.

With Yardi’s VendorCafe, vendor risk can be proactively assessed, and vendors can communicate with buyers via a web-based portal that allows users to upload insurance certificates, receive expiration alerts, view ledgers and upload and monitor invoices.

In the industrial sector, building managers, suppliers and manufacturers require fast, responsive software solutions to manage products, supplies, and all manner of procurement activities.

Yardi Marketplace provides streamlined procurement and A/P processing for real estate and industry and offers robust procurement solutions for owners and operators.

While adoption of sustainability protocols and green building has been slow throughout the Asia Pacific region, the tide seems to be turning as more and more developers and investors begin to understand the benefits of an environmentally friendly strategy. In addition, pressure from foreign investors – especially those from Europe – is influencing how investment funds value green attributes when assessing potential investments.

As one fund manager explains in the report, “We’re seeing more motivation to invest in environmental technology in our buildings because the economies are more attractive over the long term, but you have to take a long-term view, so it only applies if you’re willing to hold the buildings for 10 to 15 years.”

One way to make the most of this growing acceptance of sustainability practices is by adopting more products and services designed to reduce energy use and manage resource demand efficiently and effectively.

Yardi subsidiary Enerliance produces Load Based Optimization System (LOBOS) software, designed to operate on top of existing HVAC control systems to “dramatically reduce energy consumption in large buildings and campuses”. With automated energy efficient reset controls and real-time demand response functionality compatible with the “Smart Grid,” the LOBOS system provides fault detection and diagnostics for continuous commissioning, reduced energy consumption, and lower CO2 emissions.

For more information about Yardi, visit www.yardi.com.