London is Number One Global Target; Secondary Markets Gain in Popularity
Global real estate investors remain confident and their intentions are expansionary, with more than half planning to increase their acquisitions in 2015, according to CBRE’s Global Investor Intentions Survey 2015.
Globally, 53 percent of investors plan to increase their purchases this year. Investor appetite for cross-regional acquisitions has increased significantly with 38 percent of respondents intending to invest outside their own region this year–up from 28 percent in 2014. Among these investors, 31 percent identified Western Europe as the top destination.
London retained its position as the top city for investment, while other gateway cities such as Tokyo, Sydney, New York and Paris remained in the top ten. Second-tier cities saw an increase in investor interest in 2015, with Madrid, Dallas and Seattle all making the top ten. This reflects investors’ search for more attractive yields, as well as greater knowledge and comfort with a larger number of global cities. There is also a marked increase in appetite among investors from EMEA and North America for value-add and opportunistic investments. In contrast, Asia Pacific saw a significant jump in investors preferring prime core assets at 43 percent in 2015, compared to 29 percent last year.
Office and industrial remain the preferred asset classes, selected by 33 percent and 29 percent of investors respectively. Investor interest in industrial and logistics assets is being driven by the structural change in the retail sector and the growth of e-commerce; however, there is a limited supply of assets in this sector available for sale, meaning that investors will continue to face challenges when sourcing deals.
Half of respondents identified asset pricing as the top obstacle to acquiring real estate assets. The tight availability of assets (21 percent) and competition from other investors (19 percent) were also identified as obstacles in all regions.
“The appetite for global real estate investment is increasing as more investors intend to deploy capital outside of their own region this year. Competition for assets is intensifying and many investors plan to move out the risk curve in search of higher yields–a trend that will result in a stronger focus on value-add and opportunistic investments. We believe that a low interest rate environment, economic expansion in an increasing number of markets, and corresponding improvement in real estate fundamentals will attract capital to commercial real estate,” said Chris Ludeman, Global President, CBRE Capital Markets.
To request a copy of CBRE’s Global Investor Intentions Survey 2015 or to speak with a CBRE expert, please contact Aaron Richardson (212.984.7126 or email@example.com) or Ayana Miller (212.984.6506 or firstname.lastname@example.org).
About the survey
The 2015 CBRE Global Investor Intentions Survey was conducted using an online questionnaire in January 2015. Responses were obtained from more than 700 real estate investors in the Americas, EMEA and Asia Pacific from a broad range of investor types including asset managers; property companies; institutional investors; REITs; private investors and banks. 317 responses were obtained in Asia Pacific; 290 in EMEA; and 85 in the Americas. The global survey results were formulated by weighting the survey responses according to global capital flows in all three regions.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 52,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 370 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.