MIPIM 2014: Investment volumes to surge 13% this year

After surpassing pre-global financial crisis volumes last year, the world’s property markets are set to surge again in 2014, according to Cushman & Wakefield.

According to the latest findings by global property services firm Cushman & Wakefield, real estate investment in Europe and the US should drive global transaction volumes upwards by 13 percent in 2014. The firm noted that 2013 saw $1.18 trillion in transactions globally, a 22.6 percent increase on 2012 and the highest total since 2007.

David Hutchings, Cushman & Wakefield’s head of EMEA, said: “The real estate market ended 2013 on a high on the back of greater confidence and rising liquidity, and that momentum is building further this year with signs of a firmer occupier market as well as greater investment demand and new sources of debt to drive investment activity and property pricing higher.”

In terms of regional trends, Cushman & Wakefield noted how Asia saw the most growth in 2013 as investment volumes in China, Japan and Australia offset declining volumes in Taiwan, India, South Korea, Hong Kong and Thailand. The Asia-Pacific region also saw the fastest growth in investment volumes of any region in 2013 with a 25 percent increase, leading to a year-end total of $568.5 billion. That reflected 48 percent of the global market, although the firm noted that $397 billion of that were land sales in China.

In Europe, the UK and Germany were the most active investment markets in the region, although Russia, Italy, Spain, the Netherlands and Belgium saw upticks as well. There was less activity in France, Sweden and Poland, while Norway, Switzerland and Denmark saw even less.

For the first time since 2009, the Americas failed to be the driver behind global growth. It was another sign that the relative values elsewhere are attracting capital, both domestic and international, away from the world’s largest property market.

In keeping with that theme, cross-border investment volumes rose as investors gained confidence about placing their capital outside of their own jurisdictions. Indeed, cross-border investors accounted for 24.3 percent of transactions in the year.

Hutchings said: “Core markets remain in high demand, but a search for stock, yield and performance has rapidly led investors to look further afield.”

This year, Cushman & Wakefield predicted Asia volumes to increase by 7 percent to 8 percent – the lowest growth prediction of the three regions as quantitative easing in the West adversely affects sentiment in emerging Asia. That trails Europe, where the firm expects to see 12 percent to 13 percent more transactions, supported by greater debt supply. Finally, it predicted the US would again be the growth engine in terms of deal volumes, surging 20 percent amid a wider economic recovery and greater job creation.