A global perspective
In 2015, E&Y reported that traditional bricks and mortar was being disrupted by new economic and social influences
In the world of retail, shoppers expect giant distribution centres to provide convenient and immediate access to their products
In residential areas, millennials want live, work and play enivroenmnts rather than the traditional idea of a home with a garden and garage
Investors themselves are demanding more and more access to information
Outsourcing
Another disruptive influence is cost management, with fund managers being forced to re-evalaute that what they bring to the table and focusing on that
For many fund managers their role is becoming more and more streamlined towards the real value creating which rests solely with them placing a shift towards outsourcing non core functions
Fund admins ar a beneficiary of this shift, as back and middle office functions become more natural areas for fund managers to outsource to others
Fundraising
Despite the proliferation of large scale real estate projects in recent years, the fundraising environement continues to prove challenging
For many, traditional sources of investors are either reducing or are not able to meet the demands of ramping activityy
Instead third part placement advisers are being turned to in order to assist in building new investor relationships
In order for fund managers to successfully raise capital, they must demonstrtae
A defined investment strategy
An experienced team
A demonstrable track record in this relevant field
Strong alignment of interest with investors
Clear capital raising strategy
Tax
Taxation measures have a clear effect on real estate propositions
Global tax authorities have itesnefiied efforts to combat tax evasion leading to the BEPS programme by the OECD which aims to ensure that businesses adhere to tax regimes where they are based
In terms of investment funds, the effects of BEPS will be one of substance broadly meaning that there are sufficient business activities to demonstrate that those activities are occurring in a particular country (eg country of the fund0 rather than the investment fund being established in a particular country for the sole purpose of claiming tax treaty benefits
The main challenge of this changing taxation environemnt is to ensure that investment is not stifled by seeking to enforce tax policies