EXPO 2014: Global RE coffers at record $408bn

 At the EXPO Real conference in Munich today, DTZ unveiled its Great Wall of Money report, in which it said the total available capital for investment globally grew by 15 percent in the first half of 2014.  

DTZ, the global property services firm, revealed today that newly available capital targeting commercial real estate grew in the first half of this year by 15 percent to what it called a “new record’ of $408 billion. The research, now in its tenth year, was unveiled today at the annual EXPO Real conference in Munich.

DTZ said the number represented an increase of capital flowing into the asset class in all regions, including the Americas, Europe and Asia. The firm also said it reflected the highest growth since the end of 2010. “This substantial capital targeting real estate reflects the continued attractiveness of property as an asset class in times when bond yields remain at a historic low,” the firm stated in its report.

DTZ, which last month was acquired by a private equity consortium led by TPG Capital, said there was a 21 percent increase in available capital from the Asia-Pacific region, the biggest increase of the three regions. Asia Pacific available capital now accounts for $117 billion.

The Americas, however, remains the biggest region for available capital for real estate investment with $149 billion of new capital. That figure represented an increase of 16 percent. Europe grew the least, by 11 percent, to $142 billion.

In terms of the type of new available capital for property investment, DTZ made a point of stating that capital emanating from the listed sector increased 36 percent, now accounting for $26 billion. “Still, unlisted funds continue to hold the bulk of the capital at 62 percent,” the firm stated.

Further, DTZ said it had tracked a 14 percent increase to $187 billion of available equity in the first six months of 2014, describing that as the “fastest increase since our records began in 2009.” Total equity was up in all regions but most so in Asia, where the total increased by 21 percent to $52 billion. The Americas, by contrast, was up 17 percent but to a bigger $63 billion. “This indicates that, over the past six months, investors increasingly were focusing on bringing fresh equity risings to a final close,” DTZ noted.

Leverage, on the other hand, remained flat across all regions. DTZ said that global average gearing was 54 percent, which is the same as at the start of the year. Drilling down, North American gearing was down, Asia was flat and Europe ‘notched up’ “This partly reflects increased debt availability from banks and partly growing confidence in taking on more debt by fund managers,” the firm stated.

The research was formed with DTZ adopting a bottom-up analysis, tracking the activity of 3,200 investment vehicles globally and drawing on data from more than 20 third-party sources.