Real Estate Crowdfunding

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Real Estate Crowdfunding, ,Alternative Finance Sector Report - October 2014 5
REAL ESTATE CROWDFUNDING
ALTERNATIVE FINANCE SECTOR REPORT
PUBLISHED
October 14
AUTHOR
Samantha Goins
Investment Case & Risks of Real Estate
The real estate market offers a very wide range of options. Properties are located all over the world covering mainstream commercial
and residential sectors and more esoteric opportunities such as car parks, care homes and student accommodation. Of course,
the location, property type and the stage of development all impact the risks and returns for investors. This section looks at the
investment case for real estate, considers the different types of opportunities available and the advantages that crowdfunding has for
both investors and developers.
Commercial Property
Commercial property includes retail, office and industrial space. The sector took a big hit during the 2008 financial crisis but
confidence is beginning to grow in several cities across the world. The chart below shows the top 20 cities for direct commercial
property investment during 2013.
Direct Commercial Real Estate Investment - Top 20 Cities in 2013
London
New York
Tokyo
Paris
Los Angeles
Chicago
Sinapore
Shanghai
Washington DC
Seoul
Hong Kong
Boston
Dallas
Houston
Silicon Valley
Seattle
Sydney
Munich
San Fransisco
Moscow
0 40 20 10 30 35 25 15 5
Source: Jones LAng LaSalle, January 2014
U.S.$ Billions
Americas
EMEA
Asia Pacific
Commercial property has a wide range
of investment benefits. It can provide
steady annual returns from rental
income secured on long-term contracts
and capital growth at least in line with,
and often above inflation. Commercial
property is also a source of portfolio
diversification as it is less volatile than
mainstream assets such as equities and
bonds. Returns from commercial property
are relatively strong and investment
interest is now improving across the
globe.
Management fees are a big consideration,
it is important to have an experienced