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US$57.3b expected to be invested in global real estate: Investment Intentions Survey

Wednesday, January 18, 2017 - 10:10

A minimum of US$57.3 billion of capital is expected to be invested in global real estate in 2017, according to the global Investment Intentions Survey 2017, a joint project by the European Association for Investors in Non-Listed Real Estate Vehicles (INREV), Asian Association for Investors in Non-Listed Real Estate Vehicles (ANREV) and Pension Real Estate Association (PREA).

This represents a total average target allocation of 11.5 per cent for investors, a gain of 1.5 per cent from current allocations. The results indicate a continuing appetite for real estate among institutional investors, despite global economic and geopolitical uncertainty.

More than half of investors in the survey plan to increase their global real estate allocations over the next two years.

Around half of the expected investment capital (49 per cent) will come from European investors, with 36.3 per cent from North American investors and 13.8 per cent from investors from the Asia-Pacific region.

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Within the Asia-Pacific, the top three real estate investment destinations continue to be Sydney, Melbourne and Tokyo.

Tokyo fell from first place in 2016 to third this year and was replaced by Sydney. For the second consecutive year, China Tier 1 cities of Shanghai, Beijing, Shenzhen and Guangzhou came in fourth place.

Singapore and Seoul came in joint sixth place, while Hong Kong and Macau came in eighth, down from fifth place previously.

In the Asia-Pacific region, the office market remains the preferred sector with 89.6 per cent of respondents intending to invest in this sector, consistent with the past four years' results.

A total of 76.3 per cent of the respondents who invest in the Asia-Pacific are invested in non-listed real estate funds.

Non-listed property funds remain the preferred route to increase real estate allocations for the majority of investors in the region (41.3 per cent), followed by joint ventures and club deals at 33.7 per cent.

The survey attracted 314 respondents in total, representing a minimum combined total value of US$2.3 trillion in assets under management.

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