Global property investment to exceed $1 trillion
Investment in the global property market saw a modest 6 percent increase during 2012 reaching close to $1 trillion and signaling what experts believe could be a return to confidence in the international property sector.
According to the latest International Investment Atlas by global agency Cushman & Wakefield, 2013 could see global investment volumes rise by 14 percent taking them to their highest levels since 2007, when $1.25 trillion was exchanged in property deals. The increase will be driven by the North American and Asian markets with America and China proving to be the two key areas of strong growth.
However this growth isn’t just limited to these two global powerhouses as a number of other regions saw fourth quarter rallies in 2012 including Poland, Norway, Switzerland, Thailand, India, Australia and most notably Spain.
Last year in the Americas the USA and Mexico were the biggest gainers, while Malaysia, Vietnam, Australia and New Zealand enjoyed the strongest growth rates in Asia and Oceania. In Europe, Finland, Norway, Ireland and Switzerland witnessed the highest growth. Modest increases in big markets like China, Germany and Hong Kong were also instrumental in delivering growth at a global level.
So what can we expect next year? Well, North America should be a favoured market in 2013 despite ongoing fiscal and political difficulties. An improving economy and debt market coupled with low vacancy and high liquidity bodes well for investment demand and as a result Cushman & Wakefield are forecasting a 15-20 percent increase in investment activity.
The Asia Pacific region will also see improved economic conditions, which should lead to sustainable investment growth of around 15-20 percent. Investment demand is likely to increase in China as urbanisation continues, but also in Australia and Japan, while India and Indonesia will also see a rise in demand.
John Stinson, Head of Capital Markets in Asia Pacific for Cushman & Wakefield believes there are opportunities across all sectors. He said: “In office we expect global banks to follow regional banks in expansion plans fuelling office demand and generating steady rent growth in the major gateway markets of Tokyo, Shanghai, Hong Kong, Singapore and Sydney.”
“Retail will be boosted by strong retail turnover growth off the back of buoyant GDP forecasts this year with Kuala Lumpur, Bangkok, Beijing and Jakarta likely to benefit the most. Overall the hottest sector this year will be logistics with major hubs of Osaka, Tokyo, Shanghai, Hong Kong and Singapore with strong demand and investment activity anticipated,” Stinson added.
Even Europe should see modest rises of five percent investment growth. The report says that in the short term European investment activity is likely to remain subdued thanks to a lack of quality product and affordable financing. However, there are signs that more stock released by the banks, the public sector and corporate owners should at least produce some form of increase in activity in 2013. Germany is likely to remain a top pick for investors in addition to the Nordics, London and Paris.
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