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CBRE: 67% of Americas investors to be net buyers

More than half of all institutions plan to deploy more than $1bn of capital in the Americas this year, according to the firm’s annual survey.

Americas-focused investors intend to remain active in the region’s commercial real estate market, with the vast majority planning to be net buyers in 2017.

About two-thirds of investors expect to do more acquisitions than dispositions, according to the CBRE Americas Investor Intentions Survey 2017. The percentage of net buyers increased from 60 percent in 2015 and 65 percent in 2016, the survey said.

Although more than half of respondents anticipated deploying less than $500 million in the Americas this year, institutional investors – comprising sovereign wealth funds, insurance and pension funds – planned to deploy more than $1 billion of capital. In fact, 21 percent of institutions are projecting volumes between $2 billion and $5 billion, 19 percent between $1 billion and $2 billion and 14 percent are anticipating more than $5 billion. Institutional investors comprised about 10 percent of the 1,000 Americas-focused survey respondents.

Separately, the annual report, released last week, revealed that about 39 percent of the investors surveyed chose value-added strategies as the most attractive asset type for 2017 – similar to the previous year’s preferences. “Good secondary,” or non-core, assets, accounted for 25 percent of respondents’ preferences – up from 17 percent in 2016 – displacing core as the second most attractive asset type.

“This ties in with the key driver for investing in real estate – the search for elusive yield and income – and is the only asset category showing a dramatic increase in preference,” the report said.

Core, meanwhile, was the favorite asset type for 20 percent of respondents – down from 29 percent in 2016 – and opportunistic was the top choice for 14 percent of survey participants.

Los Angeles-based CBRE noted that institutional investors’ had a stronger preference for core assets than did the larger respondent group – which also included REITs, private real estate companies and fund or asset managers.

“Echoing concerns raised at the beginning of 2015, investors perceive global economic shocks and rising interest rates as the greatest threats to property markets,” the report said. “They also continue to have concerns about asset pricing.”

Regionally, Los Angeles kept its top ranking for most-favored property investment spot, followed by Dallas/Fort Worth and New York. Washington, DC moved up the rankings to fourth place, from eighth in 2016.

US growth expectations and record levels of capital allocation will drive strong inbound capital flows in 2017, the survey predicted. About three-quarters of investors picked North America as the most attractive global region for purchases in 2017, though CBRE noted a home bias among survey respondents.