EXPO: Global RE investment hits post-GFC high

Global property investment rose 16 percent in the past year through June and now stands at its highest level since 2008, according to a report from Cushman & Wakefield.

Real estate investment across the globe reached $942.8 billion in the past year through June, growing by 16 percent from the previous 12-month period, according to research from Cushman & Wakefield. The figure marked the highest global real estate investment volume since 2008, just 13 percent below the pre-crisis peak, the firm said.

Released at the real estate conference Expo Real in Munich today, the report said that despite increased stock market volatility, uncertainty of events in China and the Middle East, as well as the approaching return of US monetary tightening, real estate investors have delivered another robust year of rising volumes and values.

Yet, the market is far from uniform, with results varying across regions and capital flows reverting to the most liquid and accessible markets. The report shows that top 25 gateway cities in terms of real estate investment saw their market share rise from 51 percent to 53 percent.

“Despite the strong overall growth and the major gateway cities remaining largely unmoved, change is more evident at regional levels,” said report author David Hutchings, head of EMEA investment strategy, Cushman & Wakefield. “Europe is still a magnet for capital from all regions but North America has actually been the fastest growing target for foreign capital.”

Fourteen of the top 25 cities are in the US, while Germany, the second most popular country by number, has just three cities making the list. Investment into the 14 US cities grew by 32 percent compared to just 7 percent growth for non-US cities in the top 25.

The US is also dominating outward global capital flows, accounting for 42 percent of all foreign investment between regions in the past year and growing by 25 percent from the previous year. Asian investment globally comes in at number two, with a 25 percent market share.

“Investors’ search for greater global diversification has, if anything, been accelerated by fears of a regional slowdown but has also become more focused with the US a notable winner,” added Hutchings.

The report also anticipates that 2016 will be another stellar year for global real estate investment and forecasts global volumes to rise 17 percent over the year to mid-2016. The firm predicts that global investment volumes will reach a new record high of $1.1 trillion led again by growth in Europe and North America.

“Looking ahead, while increased global uncertainty will continue to affect investors, corporate confidence is still generally high and, allied to the changes in demand being wrought by new living and working practices, this underpins a fundamentally robust outlook for good quality real estate,” said Carlo Barel di Sant’Albano, chief executive, global capital markets, Cushman & Wakefield.