Research - JUNE 17, 2014

International investors drive liquidity in global real estate

by Andrea Waitrovich

Global invested property stock set a new record level of $12.9 trillion at year-end 2013, driven by improving sentiment and capital value recovery, according to the 40th edition of the Money into Property 2014 report by DTZ. This is up 4 percent from a year ago, with growth across all three regions. Globally, growth was led by 9 percent in Asia Pacific, followed by 3 percent in North America and 2 percent in Europe in U.S. dollar terms.

Real estate stock growth was caused by equity growth of 9 percent, while debt posted a 3 percent increase. For the first time since the onset of the global financial crisis, growth was recorded across all four debt/equity and public/private quadrants. But Europe continues to lag due to continued bank deleveraging. With debt up less than equity, leverage levels continue to come down in each region.

Asia Pacific has replaced Europe as the region with the largest stock in 2013, driven by strong growth in China.

Transaction volumes recovered to near-2006 levels in 2013, up 22 percent to reach $518 billion. Cross-border investors have been the key force in driving volume up globally. They now represent a post-crisis record 23 percent of volume. Despite this positive trend on volumes, capital values remain mixed.

The DTZ report covers 36 markets globally and is divided into three main sections. The first section provides a detailed update of invested stock both globally and in each of the three main regions. The second section is focused on the results of the firm’s investor and lender surveys, which were undertaken between March and April 2014. In the third section, the report provides an update on investment transaction volumes and the latest results from DTZ’s transaction-based index.  

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