CBRE: Americas Takes Top Spot for Global Investments

According to a report by CBRE Group Inc., the Americas was the world’s best-performing region for real estate investment value, according to the Q1 2012 CBRE Capital Value Index. The result shifted the focus from the Asia-Pacific region, which led the world during most of 2011.

Noting that the Americas saw a year-over-year gain of 9.6 percent in the first quarter of 2012, Raymond Torto, CBRE’s global chief economist, said that “there has been a marked increase in investor interest in the Americas’ prime properties over the last year. Last year at this time, the Americas was showing respectable gains, but were far behind the 19 percent annual performance witnessed by the Asia-Pacific Capital Value Index.”

The CBRE Indices measure both office capital values and rents for prime office properties globally and in the three major regions — the Americas, Asia-Pacific and EMEA. Over the last year, the Global Capital Value Index rose 5.7 percent while the Global Rent Index rose 3.4 percent. However, most of the gains were in the early part of the one-year period as both capital values and rents lost upward momentum as the year wore on. The company was quick to note, though, that the indices measure capital-value growth for prime office properties. In general, investors remain risk adverse and highly selective and are most willing to divert capital to high-quality, prime assets.

The Americas Capital Value Index showed the strongest improvement in the first quarter of 2012, leading on the basis of both quarterly and year-over-year gains. While expanding noticeably, the index still stands 17.4 percent below its pre-recession peak. EMEA’s index fell by 99 basis points in the first quarter, but remains 0.7 percent higher than its reading one year ago. By contrast, Asia-Pacific has been seeing capital values recover for the past several years. Relative to its pre-recession peak, the first-quarter 2012 results stand 1.1 percent above the top reading and has recovered 31 percent from the pre-recession trough in the third quarter of 2009.

The Global Office Rent Index is comprised of data from 123 cities around the world. The Global Capital Value Index uses the same sample for EMEA and Asia Pacific, while the Americas data is derived from the National Council of Real Estate Investment Fiduciaries. The base period for the indices is the first quarter of 2001.