Market Outlook

The private equity (‘PE’) landscape is of significant importance to the UK economy, with PE investment in the UK exceeding €27 billion in 2017, nearly double the figure we saw deployed in 2016.

Consistent feedback from investors, as evidenced by the successes and failures of recent years is that the strength of the management team behind a business is key to what a portfolio company actually achieves.

So how do you attract and motivate a management team in a private equity portfolio company? We regularly see headlines about executive pay in listed companies, and there is readily accessible information in PLC remuneration reports, but less information and less disclosure is available in the context of privately owned and private equity backed businesses.

In response to this, KPMG have…

The private equity (‘PE’) landscape is of significant importance to the UK economy, with PE investment in the UK exceeding €27 billion in 2017, nearly double the figure we saw deployed in 2016.

Consistent feedback from investors, as evidenced by the successes and failures of recent years is that the strength of the management team behind a business is key to what a portfolio company actually achieves.

So how do you attract and motivate a management team in a private equity portfolio company? We regularly see headlines about executive pay in listed companies, and there is readily accessible information in PLC remuneration reports, but less information and less disclosure is available in the context of privately owned and private equity backed businesses.

In response to this, KPMG have undertaken a survey of both PE investors and management teams to ask them some of the questions we thought you would like to know about the role of reward in a PE portfolio company. Our findings and insights coming from them are contained in this report.

Real estate sector in India has traditionally been lagging behind other sunrise sectors in adopting new technologies. However, due to major government reforms such as RERA and GST there has been consolidation in the sector and reputed developers sense an opportunity to expand their scale of operations. This expansion needs to be backed by various technological interventions to ensure improved efficiency and transparency, which will help in achieving the ultimate goal – customer satisfaction. We are already witnessing a sea change in the way our industry is embracing and adapting to innovative designs, planning tools, software and technologies that provide better control over construction progress and ensure quality within defined budget. We are also using analytics to track and understand customer preferences. I am personally very delighted to be on the cusp of a digital revolution in our sector which will potentially transform the way we operate. – Vikas Oberoi Chairman & Managing Director, Oberoi Realt

2018 is proving to be a turning point for the Indian real estate sector in many ways. With the current government’s renewed focus on affordable housing, game changing regulatory reforms, and infrastructure status to warehousing, business sentiment has been positive.

 2018 is proving to be a turning point for the Indian real estate sector in many ways. With the current government’s renewed focus on affordable housing, game changing regulatory reforms, and infrastructure status to warehousing, business sentiment has been positive.

The private equity investments in Indian real estate improved 15 per cent year-on-year in JanuaryMarch 2018 reaching USD3 billion1 billion and are estimated to grow to USD100 billion by 20262 with tier 1 and 2 cities benefiting the most in future.

The GPR/APREA AsiaPac Performance Snapshot tracks the dynamics of listed real estate securities (including REITs) across 12 AsiaPac countries/regions and eight sectors, over multiple time horizons.

• August results revealed a clean sweep for Asia Pac REITs, which outscored rival asset classes over all time horizons.

The GPR/APREA AsiaPac Performance Snapshot tracks the dynamics of listed real estate securities (including REITs) across 12 AsiaPac countries/regions and eight sectors, over multiple time horizons.

• All asset classes posted positive total returns in July – REITs were the strongest performers.
• Listed real estate, equities and bonds posted positive returns of 0.8%, 0.9% and 0.1% respectively verse REITs at 1.6%.

This quarterly briefing offers you a roundup of the private equity and venture capital deals along with capital activities across major sectors in the quarter and trends that are shaping investment decisions today.

It distills the perspectives of our teams of subject-matter professionals in the region into pertinent insights to keep you ahead in navigating the private equity landscape.

Hong Kong’s retail sector had an impressive start into 2018 with retail sales growing 13.9% YOY so far this year, and reaching record levels comparable to the last market peak. Millennials and Generation Z have been driving the retail market towards more lifestyle consumption and experiential shopping. Premium, leading fashion, and health and beauty are creating robust expansion needs for prime space.

Nonetheless, the retail rental should only see a moderate recovery in 2018 with the overall highstreet rents growing by 1-3% YOY in 2018 and 3-5% YOY in 2019.

The GPR/APREA AsiaPac Performance Snapshot tracks the dynamics of listed real estate securities (including REITs) across 12 AsiaPac countries/regions and eight sectors, over multiple time horizons. 

The GPR/APREA AsiaPac Performance Snapshot tracks the dynamics of listed real estate securities (including REITs) across 12 AsiaPac countries/regions and eight sectors, over multiple time horizons. 

• REITs were the top total return performer in June 2018.
• Equities and REITs were the strongest performers over the past five years.
• On a ten-year basis, REITs outpaced rival asset classes, followed by listed real estate.

Business sentiment firmed amidst Singapore’s solid economic growth of 4.4% y-o-y in 1Q2018. The finance & insurance sector expanded by 9.1% y-o-y, while the information & communications sector grew by 5.7% y-o-y. Office-using employment increased by 7,100 workers in 1Q2018. Private economists now expect 2018 GDP growth to exceed 3%.

PRC co-working operators continue to move into the Hong Kong office market.

Office

Leasing activity in the overal market picked up in May, with net absorption int the overall market amounting to 153,400 sq ft. Demand was mainly focused on new and upcoming Grade A offices, accounting for about 48% of all new lettings, in terms of floor area. At One Hennessy, a new Grade A office being built in Wanchai, Shanghai Pudong Development Bank reportedly leased eight floors (85,400 sq ft) for their first centre in Hong Kong, KR Space is also reportedly negotiating additional locations around the city.