This is the first of a 7-part series on Value-add investing based on the strategic plan of A&R Development. Through this series A&R will cover the key factors when looking for a value-add investment. While there is no silver bullet for investing, following this list helps A&R cover its bases to make the smartest investments possible.

When it comes to investing in emerging markets, understanding the indicators of a city on the rise is crucial. Before delving into the advantages, let’s first define what constitutes an emerging market economy.

An emerging market economy typically refers to a fast-growing economy with a low to middle per capita income. A&R follows the data and several key indicators can signal the potential for an emerging economy:

• Growing Middle Class: The presence of a growing middle class is a promising indicator of future economic growth. As the middle class expands, it brings with it increased purchasing power, driving consumption and fueling economic expansion.
• Rapid GDP Growth: Emerging economies often start from a lower GDP base, giving them significant room for growth. This provides an opportunity for investors to capitalize on the upward trajectory and benefit from the expansion of these economies.
• Increasing Access to Debt and Equity Liquidity: The rise in debt and equity liquidity within an emerging market signifies new investment opportunities. It allows businesses and entrepreneurs to access capital beyond traditional bank loans, fostering innovation, expansion, and economic development.

Investing in hotels in emerging markets positions you as an early entrant to the party. By getting in before a market has fully matured, A&R can potentially enjoy substantial returns as the market continues to develop. Emerging markets, with their lower starting GDP, often experience higher growth rates compared to established economies, offering a greater upside for investors.

In summary, investing in emerging markets presents exciting opportunities for those willing to embrace the potential of fast-growing economies. By recognizing the indicators of an emerging economy and seizing the early advantage, investors can position themselves for lucrative returns in the long run. Stay tuned for part two of the series to see how a high barrier to entry can protect A&R’s investments.