Property Investment, Our Core Business
Property investment is our core business. In line with this, we continuously extend the group's portfolio.
Long term sustainability is the prime consideration for our investments. We focus on properties with medium term growth that fulfill our criteria for location and structure. The synergy between our different business segments allows us to make strategic decisions for the medium term development of a property. These are decided during the course of negotiations and consequently pursued upon purchase.
A high-level of competence in retail and hotel properties forms an important element in our investment decisions.
Strategically, Land Union follows the growth potential within our five office locations. For long term sustainability of our portfolio, we also weigh risk factors such that the significance of a particular location as a percentage of the entire portfolio is not solely related to the location's overall growth potential. We are convinced that our portfolio represents a healthy balance between growth potential and risk diversification.
The Portfolio Structure
The structure of Land Union’s investment portfolio is purposefully spread throughout a wide international base within their office locations. However, location and property structure are fundamental to any of the company’s investments. Land Union maintains a close distance to its investment locations, and the focal point within each location is usually narrowed down to a small radius. This proximity allows the group to have extensive local knowledge with respect to achievable rents, real demand, price structures, as well as enabling the company to maintain positive relations with the local authorities.
The Property Portfolio
Land Union’s property portfolio includes retail stores, residential homes and apartments, hotels, offices, and inner city parking spaces. Each property division is affected by a different set of risks and
opportunities. Retail and hotel investments, for example, are predictably more cyclical than residential or parking investments. Therefore, logically, for the portfolio as a whole, the emphasis is on achieving a balanced mix of the different property divisions. The importance of timing is also considered as having a significant impact in calculating risk probabilities.
Retail properties make up a significant portion of our portfolio, due in a large part to our historical roots.
Hence, we are confident in our capability to substantially expand in this segment. Our focus is centred on the prime locations within each metropolis in which we are present.
Land Union invests in hotel properties and operates them through its sister company Ming Hotels. The experience gained from hotel operations is invaluable in providing sound judgement for the acquisition and development of new hotels, increasing the probability for sustainable, long term income.
Land Union specialises in city hotels in the 3-star category ranging from 70 to 150 rooms. Only prime locations are considered. As a family-run business operating in a niche market, our hotels differentiate clearly from sterile large hotel chains; instead, we aim to offer thoughtful comfort, individuality, service, and experience.
The property segment with traditionally the lowest risk potential contributes to the group's portfolio by adding a balanced risk versus opportunity profile and comprises a stable portion of our total portfolio. The residential portfolio consists of existing buildings as well as new built and larger compounds. Land Union regularly purchases and develops residential properties to add to its existing stock. New residential developments are preferred to redevelopment of old buildings for their efficient layouts and reduced operating costs.
Due to the intense management needs, Land Union sets a minimum size of 25 units per building. With more than 1000 residential units in its portfolio, Land Union has plenty of experience in this segment which is characterised by its low risk and stable returns.
The group focuses on the higher market segment and frequently invests in its properties in order to maintain high standards and serve the long term continuity of returns. Tenants can trust a professional management team supporting their property.
The preferred segment of large business institutions also enjoys a firm place in Land Union's portfolio. Land Union concentrates on prime central locations. However, in contrast to most institutional investors, we accept smaller unit sizes and medium standards.
Newly constructed office buildings are also considered. Credit rating and structure of tenants is secondary upon acquisition. Stress is solely on the potential achievable rents due to the office property's location and particular situation in the market. This approach allows our tenants a high flexibility and the possibility to react to a changed circumstance in demand.
Parking is a niche segment the group specialises on in Calgary, Canada's booming oil-rich city. Its downtown is crowded with high rise office buildings, and as a result, it is one of the best cities in North America for parking investments. Calgary has the second highest parking rates in North America, surpassed only by Manhattan in New York City.
With a variety of single and multi-level parking buildings, and over 2,000 parking stalls in top city locations, Land Union is well-represented in this segment. Our parking spaces are managed in cooperation with some of the world's leading parking operators.
The segment is ideal with its low operational costs and steady cash flow. With prices of up to $100,000.00 per stall, the current possibilities for new acquisitions are limited.
Land Union acquires existing properties, as well as development projects and available land. Purchase criteria are mainly location, property structure, and medium term potential. Only the prime central locations of the cities in which we are present are considered. However, no two cities are alike; therefore, depending on the city our criteria may vary slightly for each property segment.
For investment properties, the key focus is on long term sustainable rents viewed in conjunction with the city's economic outlook. In contrast to most private and institutional investors, Land Union is willing and able to value complex developmental potentials which enable us to offer vendors an optimised sale.
For retail, all properties in A-rated locations or the established neighbourhood areas are considered. Land Union acquires existing hotels having 50 to 150 rooms with developmental potential, or alternatively, development sites.
If you are interested in offering to us your property for sale, please refer to our local offices to discuss the details of our acquisition criteria for our various property segments.