Cross-border real estate investments have taken a hit as international investors continue to eye domestic markets for deals, according to a report by Colliers International.
Globally seven out of 10 investors said they would look to their home markets for transactions in 2011, with 91 percent of Asian investors and 85 percent of US investors expected to buy domestic properties in the coming year.
Only European investors bucked the trend against cross-border deals, with 62 percent planning to look outside their domestic property markets in 2011 – up from just 30 percent in the first quarter.
Collier’s third quarter investment sentiment survey questioned 216 investors representing portfolios worth $710 billion.
It also confirmed that a majority of investors were looking to reduce their risk appetite over the next 12 months, with 82 percent of US investors expected to reduce their risk profile or maintain their risk portfolio. That compares with 68 percent and 69 percent of Asian and European investors, respectively, who were planning to diversify their real estate holdings or keep their risk profile unchanged.
Yet when it comes to investors willing to take greater risks in today’s distressed markets, Asian investors lead the way. According to the report, 23 percent of Asian investors were willing to increase their risk profile compared to 18 percent of US investors and 15 percent of European investors.
US investors largely agreed real estate sectors had reached the bottom, with Dylan Taylor, Colliers chief executive officer saying in a statement: “There is plenty of pent up demand and the survey suggests investors are ready to get off the sidelines and back into the game.”