Residential Property Investment Industry Profile

Companies in this industry invest in residential properties to generate wealth, primarily through rental income and capital appreciation. Major US-based companies include Equity Residential, AvalonBay Communities, and Essex Property Trust. Outside the US, major companies include Sun Hung Kai Properties (Hong Kong), Leoplace 21 (Japan), LEG Immobilien (Germany), Kerry Properties (Hong Kong), and CapitaLand (Singapore).

International residential real estate investment is popular in markets with high population growth, rising wealth, and limited housing supply. The world's strongest housing markets include Hong Kong, Ireland, Netherlands, Macau, and Mexico, according to a recent global house price survey from Global Property Guide.

The US residential property investment industry includes about 68,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $112 billion. Residential real estate investment trusts (REITs) are included in this industry and are further discussed in a separate REITs industry profile.

COMPETITIVE LANDSCAPE

Demand is driven by the supply of investment capital and demand for rental property. The profitability of individual companies depends on property values and rental rates, which are tied to the general health of the economy. Large companies have advantages in financial resources, while small companies can compete effectively by developing expertise in local markets. The US industry is fragmented: the top 50 companies account for about 30% of revenue.

Residential property investment companies may compete with mutual fund management and securities brokerages for investment dollars. Leasing ...