DATE: November 1, 2017
TO: Russell Dixon, CEO Redhill Realty Investment Management
FROM: Jeff Kennedy (Chief Financial Adviser at Lloyds Consulting)
RE: Redhill investment plans for 2018-2025s
Thank you for providing us will the opportunity to work with your company in the current financial year. As requested, we have researched the ongoing trends in the real estate market in the West Coast of America and in the emerging markets of the Middle East and Southern Asia where the company has interest. Our analysis of these markets has shown that there will be a continued increase in demand for office premises and apartments mainly due to increased populations coupled with a rise in demand for office spaces. From our study, we have reached the following conclusions:
- The demand for office buildings and warehouses will rise in the South Asia market due to increased global trade.
- The demand for apartments and other residential buildings will increase in the West Coast area of the United States due to a rise in the population in this area.
- The demand for office buildings and residential houses will increase in the Middle East primarily due to increased trade and incomes in this region.
The current concentration of industries in South Asia will continue till 2025 mainly due to the low cost of labor and raw materials in these parts. As a result, there will be an increase in demand for office spaces. Consequently, the company should concentrate on building these type of buildings in this region.
The West Coast area will continue experiencing high levels of immigration as people look for well-paying jobs in this part of the country. The concentration of knowledge-based companies in this region has led to individuals in these part having more income than people in other areas of the country. The increased immigration will lead to a rise in the demand for houses in this region.
Finally, there will be an increase in demand for office blocks and apartments in the Middle East region. Countries in these part of the world will continue diversifying their trade to avoid over-reliance on oil exports. As a result, there will be increased demand for office buildings. Mainly, the increased income levels of most people in this region will lead to a rise in demand for apartments.
Conclusion and Recommendation
We recommend the company to increase its investment in apartments and residential buildings in the West Coast area of the country. However, it should reduce its investments in office buildings since there will be little demand for such units in the future. The company should also increase its investments in office buildings and warehouses in the South Asia market due to possible high demand for these premises in the future. Finally, Redhill should start making office buildings in the Middle East market since countries in this region are diversifying their trade and will start demanding more office spaces.