Top tycoons: Silicon Valley tycoons are busy hoarding land; Buffett is optimistic about Dubai real estate market

category:Finance
 Top tycoons: Silicon Valley tycoons are busy hoarding land; Buffett is optimistic about Dubai real estate market


In addition to the rich man in the clothing industry, the new Silicon Valley tycoons on the other side of the ocean are also hard to resist the temptation of fixed assets. Even Buffett, an old investor, expressed his willingness to enter the Dubai real estate market this year. Despite the slowdown of global economic growth, the enthusiasm of the rich peoples real estate group has not subsided.

California real estate group

Despite Silicon Valleys reputation for technology, hoarding is still an important option for companies to grow.

According to the annual form10-k report released by Apple last year, Apple had about 30 square kilometers of land by the end of 2018, compared with just 2 square kilometers in 2011.

Apple is more likely to buy land directly than lease. In Iowa, Nevada and North Carolina, which are far away from Silicon Valley, Apple has invested billions of dollars in building data centers to set up servers for IMessage, Appstore, applemosic or icloud.

Coincidentally, at the beginning of this year, Google CEO Sundar Pichai said that he planned to spend at least $13 billion this year to build new data centers and offices in 14 states across the United States, and expand several existing core offices, which is expected to create tens of thousands of construction jobs.

On this basis, Google can expand its business to Nevada, Ohio, Texas and Nebraska.

In July, lend lease, an Australian construction company, announced it had won a contract from Google to jointly develop $15 billion worth of real estate projects in California. Lendlease said the two sides will jointly undertake the overall planning, land development rights and development of the three major areas of the San Francisco Bay area.

As the residence of technology capital, California is also the state with the largest number of people on the 400 rich list of the United States. According to the 2019 list, the total wealth of 99 California billionaires is 690.9 billion dollars, a record. Although diversified industries continue to drive the rapid economic growth, the proliferation of technology giants is also pushing up the price of housing, which also gave birth to the house rental company airbnb. When the company was born in 2008, the average monthly rent for an apartment in San Francisco was still $2368, but now it has climbed 86% to $4404.

The idea of renting houses also inspired the millennial generation of young rich people. According to the global luxury and wealth engine report released by Covey international real estate this year, almost half of these young people are concentrated in California, accounting for 44%. Currently, 93% of millennial millionaires have a net worth between $1 million and $2.5 million. Nearly 60% of millennial millionaires live in California or New York State, and they live in the real estate sector It also outstrips the older millionaires, who have an average portfolio of $1.4 million and $919000.

The report also points out that these young rich people attach great importance to housing ownership and believe that real estate is the key to wealth accumulation in the long run. Even young millionaires in their twenties know that their lives will change, and they may only plan to live in their own properties for two to three years and then convert them into rental properties.

Buffett likes Dubai

According to the 2018 Global Wealth Report released by Credit Suisse Research Institute, only real estate investment increased by 2.8% compared with 2017.

The temptation of the house, even believe in the value of investment is not immune to the gods.

After this years general meeting of Berkshire Hathaways shareholders, its real estate subsidiary announced plans to open an office in Dubai, the United Arab Emirates, to expand its brokerage business to the Middle East market - Dubai has always been the focus of our global network expansion, a representative of the worlds leading innovation, and a global trade, logistics, tourism and financial center.

According to bayut, the Dubai real estate trading portal, house prices in the United Arab Emirates topped 1900 dirhams / square foot (about 19500 yuan / square meter) in 2014, and then fell to the bottom. In February this year, the S & P rating said that due to the continuous higher supply than demand, the price of Dibai housing will fall 5-10% this year, and is expected to bottom in 2020.

According to the world wealth report released by Capgemini management consultants, Dubai ranks first in the Middle East region and fourth in the world in terms of attracting investment in two real estate, second only to New York, London and Hong Kong.

This also aroused Buffetts interest. Phil Sheridan, chief executive of Berkshire Hathaway home services Gulf properties, said many high net worth customers began to think that the Dubai real estate market has extraordinary value after several years of consecutive house price declines.

In August 2019, the United Arab Emirates based ibcgroup announced on Wednesday that it plans to acquire 10000 properties in Dubai for the decoration and management of holiday homes.

The company said it had entered into an exclusive agreement with Berkshire Hathaway to act as an Advisory broker in the property services in the Gulf region to assist in the identification, acquisition and financing of properties. The deal, worth $5 billion, could expand to buy 1 million homes in more than 100 cities around the world.

Success or failure

The big guys enthusiasm for the real estate market has also brought many social problems.

In San Francisco, for example, when unicorns are springing up, the gap between the rich and the poor is becoming more and more serious. As house prices soar, homeless people can only sleep in warm steam vents. In San Francisco, a family of four earns $117400 a year, which is classified as a low-income group in San Francisco, and about 7500 people wander in the city every night.

The natives point their finger at these Silicon Valley upstarts, who have also made compromises.

In June, Google CEO sandar Pichai sent a message that he would invest $1 billion in 20000 homes in San Jose, Dawan District, the United States. The plan is not aimed at the welfare housing of his own employees, but an affordable housing project for low-income groups in the bay area.

Facebook has spent more than $18 million in Silicon Valley on affordable and multi-purpose housing. CEO Zuckerbergs wifes Chen Zuckerberg foundation has also co founded a $500 million new fund with other agencies, which plans to build or renovate more than 8000 affordable housing units in five counties of the Bay Area in the next five to 10 years.

Apple announced a $2.5 billion plan, including a $1 billion affordable housing investment fund, a $1 billion mortgage aid for first-time home buyers, and the opening of some $300 million of Apples own land for development. The remaining $200 million will go to the San Francisco housing fund and support vulnerable groups.

However, on the day after the announcement of Apples plan, Bernie Sanders, a Vermont senator and presidential candidate in 2020, attacked that Apple would not solve the growing housing crisis in California, but only increase its real estate investment - Apple announced that it would enter the real estate loan business, in order to disperse it and help create the housing crisis in California We also received $800 million in taxpayer subsidies and kept a quarter of our overseas revenue to avoid paying billions of dollars in taxes.

Of course, there are many cases of rollovers, such as the IPO farce of Wework this year.

After years of savage expansion in a tech company suit, former CEO Neumann paid for his craziness. During that time, he bought at least five luxury homes, including a $10.5 million townhouse; in 2017, he spent another $35 million on four apartments in a Manhattan building.

When people carefully examined the prospectus, they found that Neumann owned the ownership of four buildings rented by Wework, which he borrowed money from the company at a very low interest rate.

In the same way, he rented his property to the company, but Neumann was far from as watertight as Ortega did - INDITEXs brand is the biggest tenant of Ortega, and he has no difficulty in collecting the rent. Although the outside world once questioned whether INDITEX intentionally paid the rent higher than the market price to help pontegadea obtain more income in disguise, he rented it to the competition including H & M The price is the same when competing against each other.

Source: time weekly Author: Xie Yang, editor in charge: Zhong Qiming, nf5619