Alternative is a broad term, taking in whatever is different from the conventional. In investments, that means anything that isn’t stocks, bonds or cash. It’s a large playing field that is attracting an increasing number of investors, including some of the wealthiest in the world. Returns can be high, but so can risks; what are some of these diverse investment opportunities and of what should the shrewd investor be cautious?
Over the past 30 plus years, Barbados has built a reputation for luxury second homes comparable to those of the most sought-after destinations in the world. Historically known as “The Jewel in the Crown” with its riches from sugar and rum, this British colony could boast of the second-oldest parliament outside of Britain.
Northern California, with its pleasing climate and bountiful natural resources, is home to everything from delicious wines to technological breakthroughs. And also some of the priciest real estate on the planet. Here’s a peek at some of the top trending areas for those seeking to dwell in luxury as close to the action as possible. Although inventories are tight, there are still opportunities for the savvy homebuyer.
Abu Dhabi, capital of the UAE, is rich in oil but suffers from underuse of its own human resources. Abu Dhabi’s commitment to rebalancing away from oil will be underpinned by improvements in financial education, exemplified by a new academy launched by Abu Dhabi Global Market in partnership with the London Institute of Banking & Finance.
Marbella, a city in southern Spain strategically located on the Mediterranean Sea, hosts a luxury real-estate market that is virtually recession-proof. Having survived the last financial crisis relatively unscathed, unlike other markets in the country, Marbella is giving rise to new-look and high-tech luxury properties with values that appreciate on average by 10 percent annually, with those priced above €20 million qualifying as “super properties”.
As the Muslim population grows worldwide so does the demand for Sharia-compliant finance. Even in areas in which Muslims do not yet make up the majority, there is a strong demand for this type of niche financing, particularly for real-estate investment; understanding the main structures of Islamic finance that are integral to real-estate transactions are guaranteed to grow in relevance.
Real estate continues to attract investors, especially when other investment options are shaky at best. In Europe, non-listed real estate funds offer an alternative to direct investment, involving much less capital and greater diversification. But how do these funds respond to applicable risk factors compared to the direct investments?
To say that London is a global hub for business, culture and education would be an understatement. Residential real estate in England’s capital continues to be in high demand, despite recent housing reforms and Brexit—as Lodha UK’s new Lincoln Square development, rich in amenities and with easy access to the best London has to offer, testifies.
Real estate investment trusts, which pool resources to invest in rental-income properties, have led as the top-performing asset class and been the ideal response to low interest rates. Recently the GICS recognized this success by introducing a new equity market sector category for real estate companies, guaranteed to attract investors.
Hong Kong’s property prices have soared, due mainly to demand from the world’s wealthiest investors, especially Chinese. The Hong Kong government has taken measures to ward off international buyers, but there are still plenty of opportunities to snag a luxury property in this global hub, in exchange for a few million dollars.