Real Estate: Are you invested correctly?

Real Estate: Are you invested correctly?

This question is frequently asked by real estate owners and investors.

Shifting your real estate investment portfolio away from traditional portfolio-structures, towards emerging assets can assist you to protect and enhance its value.

  • Our research team has conducted an in-depth analysis of over 50 real estate portfolios and has found that the portfolio which has a wide unfocused structure, with a leaning towards innovation and PropTech has been able to retain its value during downturns and has grown during economic upturns.
  • Yield-hungry investors and owners understand the need to including emerging segments in their portfolios. We have found that around 80% of investors are reluctant to changing their real estate investment focus. Those that did make deliberate counter-investment shifts were rewarded with consistently higher returns and their capital was protected against tough times.

Why? Because as market conditions changed, so did they.

  • We find that active investors enjoy higher investment yields than passive investors; we find that investors that actively pursue new real estate segments reap higher returns too.
  • We see merit in active investors working with advisors who understand the real estate market and its vagaries and dynamics.

We suggest the following five learnings in order to create a high performing real estate-rich investment portfolio:

  1. Keep the portfolio moving. Real Estate investors needs to keep adjusting their their portfolio-mix based on market trends.
  2. Understand prevailing market trends. One needs to understand the underlying market trends before constructing a contrarian portfolio.
  3. Buy and Sell. Transaction speed matters; decisiveness is important; so is the research needed to support transactions.
  4. Brownfield over Greenfield. consider repurposing, renovation and repair over building from scratch; consider climate change and the environment in your decision making.
  5. You cannot beat the market. You are your own competitor unless you have set measurable benchmarks.

Change is always difficult.

We suggest that Investors actively seek value from the market, through research and in consultation with Meraqi who understand real estate investment dynamics.

About Meraqi's Developer Transformation Services:

Meraqi's Developer Transformation Advisory is a strategy & program implementation service which helps real estate developers understand and adapt to rapidly changing trends across market influences, buyer preferences, smart design, technology integration with built environment & asset management.

The core objective of this service is to help developers take business direction decisions and implement them in a sound manner through understanding trends and their responses. Driven by experts in real estate research, development strategy, behavioural sciences, asset management and program implementation, the Developer Transformation Advisory services is structured to act as a key resource to help real estate developers maximize the value of their assets and portfolio of assets.

About the Author

Gorakh Jhunjhunwala, MRICS

Gorakh Jhunjhunwala, MRICS

Gorakh spearheads Meraqi's overall operations, direction, strategy and growth.
He is a veteran real estate professional and has multidisciplinary experience across advisory, valuations, capital markets and investment management. He has advised over 50 clients on numerous consulting assignments and executed investment transactions valued at USD 100 million.
Gorakh holds a B. Arch from RVCE, Bangalore and M. Tech from IIT Delhi. Prior to founding Meraqi, he has spent over 15 years in key roles with leading multi-national real estate service providers.