Waste-to-Energy sites: A lucrative investment story

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Reallionaire strategy 1: Invest in recession proof assets like data centres!

Buildings that house corporate servers and back-up facilities in remote locations are vastly emerging as a gold rush property asset. Ironically, whilst the property market is still rife with falling property values, negative equity and repossessions, real estate cash-rich millionaires or reallionaires have single out data storage centres as one of the best performing property assets over the last five years. Yes, there are lots of statistics to support this. Evidently, the notion of a property crash is utter rubbish.

Nevertheless, as traditional property sectors continue to become obsolete, reallionaires have adopted certain strategies that will help them continue to make millions in cash from real estate investing. Investing in recession proof property sectors is one of many strategies used by reallionaires to grow their wealth. To date, there are around 20 real estate assets that are proving to be recession and providing their owners with excellent equity growth, double digit rental yield and superb returns on investment. Sadly, residential, retail, hotel and office properties does not make it into the G20 league.

The reason why data centres are proving to recession proof are as follows:

Firstly, the world has rapidly grown in demand for IT services (especially for the internet, coupled with a surging demand in emerging economies). Yet there is still considerable room for more IT functions within the public, private and social-enterprise sectors. The biggest driver of growth is the vast emerging demand for video content from the entertainment industry via the internet.

Secondly, the number of internet users has jumped in the last five years from 1.043 billion users (16% of the world’s population, June 2006) to 2.11 billion (30%, June 2011) (source: Internet World Stats).

Thirdly, according to the International Telecommunications Union the number of smart-phones is projected to rise from 500 million in 2011 to 2 billion by 2015. More and more people will be access rich content via the internet stored on cloud servers.

As reallionaires find new ways of developing data storage centres more cost-effectivey, the cost of content storage will drop and the volume of tenants and occupancy rates will double, thus giving owners of data centres real estate steady income streams for decades to come.

Why Reallionaires Are Chasing Green Real Estate?

Property investors who have successfully survived periods of economic downturns know its hard work to stay afloat in a down economy. Whereas, investors who have been financially battered have become increasing frustrated with buying traditional property assets. Generally, in times of economic hardship, traditional property assets tend to lose their appeal. However, it is only the average investors who tend to sit back and wait for the next boom economy, whilst the money making property investors switch to new real estate sectors.

Amidst the recent financial and economic chaos, reallionaires have been doing just that; switching their focus to new property sectors, in particular, green real estate. The green real estate sector can be defined as a convergence between green technology and the reinvention of ageing property assets, such as car parks reinvented into solar car park or EV re-charging stations. The green real estate sector consists of property assets, such as, solar farms, agro-fuel estates, landfill gas sites, energy from waste facilities, solar car parks and bio-fuel plantations to name a few. An astonishing US$211 billion was invested in green tech and green real estate in 2010, up by US$51b on 2009 figures. As a result, green real estate is the most highly sort after real estate asset among real estate millionaires and there are some excellent reasons for this.

Firstly, reallionaires are putting their money in green real estate because it has pulling power when it comes to attracting capital. Not only are the World Bank and Sovereign wealth funds lending millions to developers and owners of green real estate projects, but many financial institutions and private equity firms are also very keen to throw cash at such assets. As reported in the UK's Independent Newspapers, property tycoon, Vincent Tchenquiz through his acquisition vehicle, Consensus Group, raised over £71 million from sovereign wealth funds and institutional investors to acquire and develop solar farms, wind farms and bio-fuel refineries in South Africa. Likewise, in 2010, Vattenfall secure £150m from the European Investment Bank to develop a wind farm in Thurness Point, Kent UK.

Another reason why reallionaires are adding green real estate assets to their property portfolio is due to the knowledge that it attracts near zero taxes and other types of investment incentives. Under Governments' legislation in the UK and Europe, investors operating in the green real estate sector pay less taxes, in comparison to their counterparts investing in mainstream commercial property. Green property assets, such as, recycling centres is almost a tax free investment. In other cases, investors benefit from other incentives, such as, tax rebate, tax credit, government loan guarantees, grants and feed-in-tariffs. Such incentives and promotional policies helped in making this sector recession proof over the last five years.

Third, but not last, reallionaies are in love with green real estate assets because, unlike other property assets, it offers investors three to four sources of income. Generally most property assets give investors a rental income. However, green real estate provides investors with carbon credit income, feed in tariff income plus rental income. Reallionaires become mega rich by acquiring high performing assets that provide them with multiple streams of income.

To date, most of the richest real estate investors have bought into to the green real estate phenomenon. Reallionaires, such as, Samuel Zell, Vincent Tchenquiz, The Duke of Westmister and John Whittaker have all invested millions in this fast growing lucrative sector. To find out how you can get into the green property sector, email us for more details.

Are you the next reallionaire?

As the western financial crisis enters it fifth consecutive year and continues to erode traditional asset values, rendering them obsolete, most real estate investors are struggling to revive their ailing fortunes. In fact, they are becoming poorer and poorer by keeping dying property assets in their portfolio. Mind you, it is bloody hard work surviving and thriving in a rubble economy (as opposed to the bubble economy of pre 2007). Thus, it has become a law of economics that cash is king in this economy.

In this new decade, being rich is no longer about how much assets you accumulate, but rather, how much cash you can accumulate from owning new assets. Consequently, a new breed of super rich real estate investors are emerging, owning specific types of property assets that brings them millions in cash. This new breed of property investors are referred to as, “Reallionaires”. A reallionaire is someone who has accumulated a million dollars or more in cash (not assets) from real estate investing. In short, a reallionaire is a Real Estate Cash Millionaire.

Recently, the Estate Gazette published its EG Rich List 2011, which included the names of the UK's top 250 super rich property investors or reallionaires. An equivalent publication in the US is the Forbes Magazine rich list, which published; 'America's Richest Real Estate Billionaires'. Only property investors who have accumulated millions in cash from real estate investing over the years are featured in these illustrious publications. Investors, such as, the Reuben brothers, Samuel Zell, Donald Trump, Donald Bren and Guy Hands have all made it onto these rich list.

To a reallionaire, there is no such thing as a property market crash. In fact, the idea of a property crash is completely false and misleading. Instead, what the super rich real estate cash millionaires and billionaires believe is taking place is a “property market shift”.A shift away from investing in traditional property assets, and a move towards investing in emerging goldmine property assets. Sadly, those investors who continue to invest in traditional property assets will continue to get poorer and poorer. Whereas, those who invest in emerging goldmine property assets will accumulate millions in cash. What distinguishes a reallionaire from other property investors is that they understand the importance of acquiring emerging gold rush assets that produce quadruple returns. [For a list of the Top 20 emerging gold rush property assets, google: “Surviving Amid the Rubble” by KT Cunningham].

Reallionaires are innovative, philanthropic, savvy trend spotters. Take for example, Samuel Zell, the American real estate billionaire who has been acquiring recycling centres and making them energy-from-waste-facilities (EFW) in the US and Europe. Guy Hands, who bought around 135 landfill sites, is creating landfill gas field sites that produce green electricity and bio-gas. (see further: http://www.terrafirma.com/infinis-wrg.html)

The question this article seeks to address, is whether today's property investors' goal is to become the next reallionaire.