The global property investment market is gaining momentum, with volumes expected to rise 10 to 15 percent in 2014 and back above US$1 trillion for the first time in seven years, according to a Cushman & Wakefield report.
This comes after an estimated 8.4 percent increase saw investment sales this year reach US$978 billion.
David Hutchings, Head of EMEA Research at Cushman & Wakefield, said: “The growing level of optimism and activity we are seeing in most regions has its roots in a belief that the global economy is set for calmer waters ahead and that financial imbalances are on the mend.”
“This is leading to an increase in risk appetites which is manifest in a push to invest across borders, a move towards second tier assets and a narrowing in the prime to secondary yield gap.”
In Asia Pacific, trading activity is expected to rise five to seven percent next year after recording a modest climb of one to two percent in 2013, “with growth tracking that of the economy and delivering slower but also less volatile performance than in recent years”, the report said.
However, trends within the region are going to be heavily polarized, noted John Stinson, Head of Capital Markets in Asia Pacific at Cushman & Wakefield.
“Investors in core markets are accepting that lower returns are the new normal but they are also looking forward to more stability and hence are happy to invest in core assets for the long term.”
“Those with shorter term or higher return horizon however are ready to make sales in the core to redeploy their capital to higher growth sectors and geographies. Emerging Asian markets are therefore likely to be busier next year with Manila, Jakarta and Bengaluru offering great potential according to our research,” he added.
He also expects the impact of Asian players on the global stage to grow exponentially, “with China and Japan both increasing their overseas spending and second and third tiers of institutional and private capital also set to flow faster from areas such as China, South Korea, Malaysia and Singapore”.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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