Global real estate investment volumes to hit USD1.39 trillion in 2017
Asia Pacific accounts for 44% of total global investment volume, followed by 34% in North America and 22% in EMEA
April 2017 – Global real estate investment volumes are expected to hit USD1.39 trillion in 2017, according to Cushman & Wakefield’s The Atlas Summary 2017.
Of this amount, Asia Pacific accounts for 44% (USD611 billion), followed by North America (34%; USD470 billion) and EMEA (22%; USD307 billion).
The annual report, which analyzes and predicts future trends in real estate investment activity across the world states that investment demand for real estate will continue to be active in 2017, driven by new capital sources and more investors seeking global diversification. In addition, demand is expected to outstrip supply of real estate available for investment, a dynamic that is likely to keep pricing elevated well into the foreseeable future.
David Hutchings, Head of Investment Strategy for Capital Markets, EMEA said, “The real estate investment market will be even more dynamic in 2017/18, with capital sources changing and targets evolving as opportunities emerge across the world. Many investors continue to chase income and a return on their capital, but for some others, it is simply a return of their capital which is of greater concern in an uncertain and changing world. Perceptions of risk and attitudes towards pricing are very different between these two groups but given the uncertain economic environment, global diversification in real estate will remain a favored strategy.”
The Atlas Summary 2017 report also highlighted the following:
- Many investors will remain heavily focused on core cities in 2017 as they seek to ride out risk and build liquidity and longevity into their portfolios.
- For investors seeking growth or higher returns, new areas will be in demand and this may include new risks in core markets.
- Stronger interest in new segments and styles of investing in all regions is set to grow as the typical investment portfolio becomes more diversified to reflect changing trends in demographics, technology, mobility and urban function. Some of these new asset classes include those with a residential focus (e.g. retirement homes), data centers, urban logistics and leisure.
Marc-Antoine Buysschaert, Partner and Head of Capital Markets Office BeLux “When looking at Continental Europe, we experience a shift from the UK towards the Benelux, Spain and CEE countries. The Brexit especially increased the appetite from foreign and overseas investors for Continental Europe. In Belgium, and Brussels especially, traditional and local investors are more and more competing with new sources of capital (mainly coming from Asia and the Middle-east) in their quest for core assets in our city.
As a result, invested volumes should continue to increase in 2017 and yields would consequently remain on a slight downward movement, especially given the lack of core products on the market. Cash flow and/or location remain key for investors.”