Global real estate investors plan to increase acquisitions in 2015: CBRE survey

MORE than half of the global real estate investors surveyed are planning to increase their acquisitions in 2015, says commercial real estate services and investment firm CBRE.

According to its Global Investor Intentions Survey 2015, 53 per cent of global investors plan to increase their purchases this year.

Investor appetite for cross-regional acquisitions rose significantly with 38 per cent of respondents intending to invest outside their own region this year - up from 28 per cent in 2014.

Of these, 31 per cent identified Western Europe as the top destination.

Despite the slowdown in China, 27 per cent of investors regarded Asia as their preferred investment destination, with economic growth in the region still outpacing other regions and continuing to offer significant long-term growth potential.

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 10.

The survey said second-tier cities saw an increase in investor interest in 2015, with Madrid, Dallas and Seattle all making the top 10.

There is also a marked increase in appetite among investors from Europe, Middle East and Africa (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 per cent in 2015, compared to 29 per cent last year.

Chris Ludeman, global president of CBRE Capital Markets, said 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."

Office and industrial assets remain the preferred asset classes, selected by 33 per cent and 29 per cent 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, said the report, adding that there is a limited supply of assets in this sector available for sale so 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 per cent) and competition from other investors (19 per cent) were also identified as obstacles in all regions.

The 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.