Foreign investors to increase US real estate spending by 73%

Foreign real estate investors plan to spend up to 73 percent more on US property investments in 2009 than they did in 2008, a survey has found.

The survey of 200 Association of Foreign Real Estate Investors (AFIRE) members, conducted in October 2008, revealed that investors plan to increase their global investment activities by 40 percent and their US investment spending by three-quarters. Real estate lenders expected to increase lending by around half worldwide.

Last year, the survey revealed a more “measured” tone among those questioned, however, in 2009, four out of 10 investors said the US now offered the best market for capital appreciation globally, followed by Brazil and China. Last year, Brazil was in 12th position and China in second.

Arcapita executive director and AFIRE chairman MacLaine Kenan, said there was “muted concern” regarding the real estate markets globally during 2008. But as investors “expect more favourable investment fundamentals to return in 2009, [they] are poised to move more aggressively on acquisitions”.

Mirroring the preference for US real estate, Washington DC clinched the top spot as the most preferred city for foreign investors' dollars worldwide, followed by London and New York in second and third place. Last year, the survey found that five of the top 10 cities were in Asia. In 2009, five of the top 10 cities were in the US.

Multifamily was the most preferred property sector in the US, followed by office, industrial, retail and hospitality. For the past two years, AFIRE members have placed multifamily in second position behind office.