Type of assets (real estate)
It is the most common real estate investment sector, many individuals usually operate. It is a well-known market for both professionals and non-professionals. Also, institutional or equity investors usually invest in this segment, since it is considered quite stable in the long term. However, also it is considered as a low profitability sector. It usually ranges between 2 and 3%.
The vacation rental - or short term - has a higher profitability that usually ranges between 5 and 8%. But beware! The profitability must be studied very well over a period of 2 to 3 years. It is essential to consider vacant periods —without reservations—, the greatest wear and tear on the property or furniture, recurring expenses —cleaning and maintenance— and other possible expenses such as management fees.
The sector retail It is in the midst of a revolution and the price of rents is increasingly difficult to define. Difficult because the positioning and image criteria related to the sale are increasingly influencing online. As a general rule, brands are concentrated in certain streets. These tend to have fewer but larger and more representative stores, which, they are transformed into formidable showcases focused on selling in your store online. The rest of the premises of the city center will be related to activities of local businesses. The value of the operation will depend on the neighborhood, the profile of the street and the profile of the operator that starts operating a place with certain characteristics. At the locations Prime , the assets are considered unique due to their rarity. So the returns range between 2 and 3%. For the rest of the streets we could establish a range of 4-6%.
The common investor in this sector is usually medium or large with a wealth profile. On many occasions acting on behalf of insurance companies, investment funds, family office...
The operations usually have a large volume and include entire buildings. This is due to the regulations that prevent the establishment of offices above the first floors in mixed-use or residential buildings. It is a market more prone to variation. The profitability ranges between 3 and 6%.
The owner is usually responsible for the maintenance of the facilities. Therefore, it is very important to include in the investment strategy the specific conditioning expenses, linked to the entrances and exits of tenants. Keep in mind that most offices are rented "ready to go". Additionally, management and investment expenses also have an impact on profitability, so they must be considered before purchasing.
Industrial and logistics
In industrial investment, it is common to find the operators themselves. But depending on the volume, we also find individuals, family office, institutional and investment funds. Logistics, a trend today, is usually occupied by investment funds. It is closely linked to the change in consumption habits due to sales online. The volume of operations is usually high. Although the average profitability is higher than the other sectors, we must take into special consideration the maintenance and the specificities of each operator.
This sector is divided into multiple groups depending on the type of property. Simplifying we can list 6 types of hotels: Urban, airport, beach, of Mountain, rural y Themed. Investing is complex and similar to retail: the value of the property depends a lot on the quality of the operator, and of course, on its situation. Opportunities in this sector involve a complicated combination of variables. Thorough knowledge is necessary, so investors are usually the operators themselves, or investors used to this type of asset. In any case, they always enjoy a good lung financial.
They are soils, farms - farm, hunting or livestock - and wine cellars. It is an opaque market where the information does not extend beyond certain investment circles. These are usually companies related to private banking and large law firms. They can act more agile by having information from direct sources.