C&W: Global Property Investment Volumes to Hit $1.3T in 2014

The global property investment market delivered $1.2 trillion of transactions in 2013, a 23 percent increase from 2012 and the highest total since 2007, according to Cushman & Wakefield's latest International Investment Atlas report.
David Hutchings

David Hutchings, EMEA

The global property investment market delivered  $1.2 trillion of transactions in  2013, a 22.6 percent increase from 2012 and the highest total since 2007, according to Cushman & Wakefield’s latest International Investment Atlas report.

Global real estate investment owes this rebirth to market activity and values picking up in 2013 as recessions came to an end and business sentiment resurged, ergo increased liquidity affected most global markets.

Now looking ahead into 2014, the commercial real estate services firm is forecasting a 13 percent increase in investment globally to $1.3 trillion, with the United States and Western Europe seen as the major drivers of the increase in activity.

The report lists key points:

  • Momentum is building as confidence returns
  • Demand is broadening to new areas and sectors
  • A rapid but front-loaded recovery is now underway
  • Change, not growth, is set to drive medium-term demand and performance
  • Investors are well-advised to buy the stock, not the market

“The uplift will be driven by an even stronger weight of capital but critical to the growth is a modest increase in supply from profit taking, the start of new development, a move up the risk curve and notably in Europe, as distressed assets are sold be restructuring banks,” David Hutchings, head of  EMEA investment strategy, and the lead analyst on the C&W report, told Commercial Property Executive. “The increased demand meanwhile stems from rising pension and institutional allocations as well as individual demand for a real asset, which offers a relative real yield but an ability to see that grow over time as economies recover.”

In the report, Hutchings added that core markets continue to be in high demand, but a search for stock, for yield and for performance has rapidly led investors to look further afield, in such emerging markets as Asia and second-tier U.S. cities along with Southern Europe, promoting a deeper recovery this year. He concluded that if investors can see past the politics, the U.S. market  must be strongly placed to outperform in 2014. All fundamentals point to good growth and the U.S. market will be increasingly a target for international capital.

To view the full C&W report, click here