The Global Investment Atlas 2018, produced by Cushman & Wakefield, shows the highest level of real estate investment on record with a total of $1.62 trillion in 2017 compared with $1.43 trillion in 2016, and the firm anticipates a further increase in 2018.
Asian investors were the major driving force behind these record levels of real estate investment, with money from the region accounting for more than half of all capital deployed and 46 percent of all cross-border activity. What is more, with the range of sources of capital within the region still increasing, this is likely to signal a period of sustained dominance.
According to the report, global investors from APAC increased their exposure to most markets, with the United States being a notable exception as a range of factors including the stage of the market cycle, uncertainty over U.S. policies and domestic capital controls in China, all combined to deliver a fall in activity.
North America’s loss was Europe’s gain, however, as investment from Asian sources grew by 96 percent year-over-year, primarily a result of several very large-scale transactions, including platform acquisitions marking steps toward the implementation of China’s Belt and Road Initiative.
Contrary to the conviction of some that European and American populism would result in a less adventurous investment community and a strengthening of domestic purchasing, local buying in both Europe and North America decreased in 2017 with the global increase in domestic investment driven exclusively by home buyers in Asia Pacific (+39.9 percent year-over-year).
The United States remains the main target for international investors but its lead has fallen, and regionally, Europe was ahead, attracting 50 percent of all cross-border spending. At a city level, London persisted as the most sought after destination for international capital as concerns over Brexit were mollified by faith in the city’s long-term appeal as well as a decline in sterling, with affordability in the city proving too tempting for many cross-border investors.
Within Asia, China remained dominant with Beijing outperforming Shanghai, which had been 2016’s preferred market, with volumes in the former increasing by 105 percent year-over-year. Outside of China, transactions across emerging Asia painted a positive picture, with flows into Indonesia and Malaysia magnified and India seeing record volumes for standing investments despite the dampening economic impact of demonetization.
To read the report, click here.
