Investment Strategy 2023-2025

The Current Market – Creating the Deals – Selling into the Future Market

Newly intensified investment in international real estate will emerge as a significant but as yet unquantifiable force in global real estate investment.

There are three crucial themes in the real estate investment market, namely specialization, globalisation and most importantly, imminent opportunity.

In today’s challenging market, extremely attractive future returns will come from acquiring available and perhaps heavily discounted real estate and, over time, its eventual transformation to a higher valuation, future selling price and resultant profitability.

Timing & Turn-Around

The best buying opportunities for international commercial real estate will commence from September 2023 and conclude later in 2025.

Commencing in early 2025 global pension funds, local investors and the immeasurable quantum of Chinese renewed interest will again re-enter the market to rapidly expand and consolidate their real estate portfolios. They will do so in a very competitive ‘buyer’s market’. This buyer activity will result in a rapid increase in prices, valuations and marketability of real estate – particularly that previously acquired by astute investors in the present market.

The best deals will be identified and negotiated outside the general market place. A number will be created and designed using the extensive capabilities, resources and industry contacts of First Cathay International Investments Group.

Time Frame - Mid 2023 to September 2025

Asset Selection Criteria

The principal selection criteria will include assets which can be purchased: -

Below Replacement Cost: At below replacement cost. Generally, well below previous year’s ‘inked’ prices and valuations. In the case of real estate-owning corporations we would seek to acquire the shares at a significant discount to the net backing of the underlying real estate assets.

Transfer of Existing Debt: With the transfer of existing current and renegotiated debt from existing lenders. In most cases the current indebtedness will be renegotiated at a discount to its current face value, the loan term extended, the ‘loan to value ratio’ ratio reduced, the loan interest rate reduced, and finally the security value of the ‘debt instrument’ expressed more in favour of the international investor.

Transfer on Owner’s Equity: Together with a transfer of the current Owner’s equity (if there is any) to the Investor’s purchasing corporation, or investment vehicle. This may apply in specific circumstances where a joint participation may become acceptable to particular investors.

The Real Estate Asset Class Defined

First Cathay’s essential and primary strategy will be to identify and undertake due diligence on international investment real estate within the following categories:

Single real estate assets – prime quality tenants and lease terms.

Portfolios of prime investment real estate – shopping centers, commercial office developments,

Real estate-owning corporations with a view to merger and/or takeover activity.