Investment Commercial Property Market And Equity

Investment: Commercial Property Market and Equity (Share) Market An investment can be said to be an asset or item purchased with the intention or the hope that it will create income or its value will increase in the future (Grabel, 2011). In an economic context, an investment is actually the purchase of goods for the future creation of wealth. In finance context, an investment is said to be a monetary asset that is purchased with an idea that the asset in future will generate income or it will be sold at a profit. In other words, the term investment is generally used to refer to any method used for the sole purpose of creating future income. In a financial context, investment includes the purchase of bonds, stocks or even real estate†¦show more content†¦This is because leases provide regular income stream, most importantly higher than the normal stock dividend yield (Grabel, 2011). 2. Efficient appreciation of asset value Historically, commercial property market investment has provided excellent appreciation in value (Brett, 2014). This appreciation has always met or even exceeded other types of investment. Actually, properties can increase in value due to some internal factors like proactive management and also external factors like supply and demand imbalance. 3. Accumulate significant equity through leverage Another significant feature of commercial property market investment is the ability it has to place debt on the asset, which in essence is several times the original equity. This enables you to purchase more assets using less money and more importantly increases your equity as the loans are also paid down. 4. Provides superior hedge against inflation In general, it has always been a norm that when inflation occurs, also the price of commercial properties, in particular, the multitenant assets that also have a high ration of labor and even replacement costs, will rise too. 5. Unique security advantage The commercial property market investment specifically real estate is one of the limited investment classes that are categorized as a hard asset that has significant intrinsic value. The properties, for instance, the land has value, same to the structures itself. By one selecting theShow MoreRelatedAnalysis Of The Global Market Capitalization Of Reits1696 Words   |  7 PagesDevelopment In a global context, the global market capitalisation of REITs stands at the US $1.7t by the year of 2016. Moreover, it has been reported that 66% percent of the global REIT market capitalisation could be found in the US by 2016 (EY, 2016). 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