Jersey – a strong platform for international Real Estate investment
In March 2020, the global Real Estate sector was severely impacted by COVID-19 and the repercussions are still being felt today. Offices quickly emptied as we had to change our style of working and resort to working from home, making us a more flexible workforce.
Despite these unprecedented challenges the market continued to grow in 2020 to $10.5 trillion – 160% more than the size of the market in 2010 – and is expected to continue on a growth trajectory over the next few years. As the global asset management industry looked to create smart investment decisions for their Real Estate investors during the pandemic, Jersey consistently played a key role in structuring and servicing offshore Real Estate funds.
“Jersey has become a leading hub in the establishment, financing and administration of Real Estate vehicles with a truly international client list,” says Nigel Hill, Senior Vice President – Corporate Solutions, Apex Group. “Politically and financially stable, with a tax neutral environment, the fact that Jersey is not in the EU is not seen as prohibitive to managers structuring here. The easy and cost-effective marketing offering through the National Private Placement Regime (“NPPR”) provides an attractive alternative to the AIFMD passport regime.”
Jersey’s fund industry now surpasses $500bn in assets and continues to rise despite COVID headwinds. The Jersey Property Unit Trust (“JPUT”) has been a long-term structure of choice for international investors and institutional, tax-exempt investors, such as pensions funds and sovereign wealth funds looking to hold commercial, residential or industrial Real Estate assets.
For a corporate entity, a Jersey company qualifying as a UK Real Estate Investment Trust (“REIT”) provides a long term, secure and stable income stream for investors and income and gains can be tax-exempt (subject to certain qualifying conditions
Over the years, some of the world’s top managers, pensions funds, insurers and sovereign wealth funds have structured their funds in Jersey. This deep collective knowledge of lawyers, administrators, accountants and the local regulator makes Jersey a very compelling proposition.
At Apex Group, we are no stranger to the Real Estate sector and well versed with all the structuring and technology demands of our international client base. This gives us a unique insight into industry trends and how we as a global administrator can offer solutions.
ESG is now seen as a value driver for Real Estate, and although many years ago Real Estate embodied the epitome of capitalism, the trend, however, is growing quite the opposite way. The application of ESG standards is seen as vital for investors and the community, not forgetting that the United Nations have outlined 17 sustainable development goals in the UN 2030 Agenda for Sustainable Development. Investing in greener Real Estate has become a necessity.
Apex Group has been at the forefront of ESG and can help with simple health checks through to detailed asset level ESG data reporting. Similarly, the technology and reporting requirements for managers as they navigate an ever-demanding regulatory landscape means their focus can swing away from asset selection and investing, to dealing with investor queries and internal reporting.
The structure of Real Estate investments and the funds themselves can be complex. Pulling data at the tenant level (property manager) through a myriad of property companies, holding companies, master holding companies, the fund through to Limited Partners or Unit Holders on a multi-jurisdictional level requires a high level of consolidation, multi-currency and multi-gap entity accounting as well as the ability to offer investor reporting in a safe, cloud-based environment.
“Apex Group’s ‘hub & spoke’ Business Acceleration Services (“BASE”), allows us to be a strategic partner with our Real Estate clients as they expand into new locations and strategies, mitigating their risk while achieving efficiencies for their investors,” adds Nigel Hill. “Asset managers are looking for their administrators to provide bundled solutions with seamless connectivity, cloud-based technology and the ability to be innovative and grow with them.”
To find out more about how Apex Group can help with your Real Estate investments, please contact the team.