by Brianna Crandall — May 18, 2015—Global real estate investors remain confident and their intentions are expansionary, with more than half planning to increase their acquisitions in 2015, according to global commercial real estate (CRE) services and investment firm CBRE Group’s Global Investor Intentions Survey 2015. The firm queried 700 real estate investors of all types around the world for the report.
Globally, 53% of investors plan to increase their purchases this year, according to the report. Investor appetite for cross-regional acquisitions has increased significantly, with 38% of respondents intending to invest outside their own region this year—up from 28% in 2014. Among these investors, 31% identified Western Europe as the top destination.
Locations
London retained its position as the top city for investment, while other gateway cities such as Tokyo, Sydney, New York and Paris remained in the top ten. Second-tier cities saw an increase in investor interest in 2015, with Madrid, Dallas and Seattle all making the top ten. This reportedly reflects investors’ search for more attractive yields, as well as greater knowledge and comfort with a larger number of global cities.
There is also a marked increase in appetite among investors from Europe/Middle East/Africa (EMEA) and North America for value-add and opportunistic investments. In contrast, Asia Pacific saw a significant jump in investors preferring prime core assets at 43% in 2015, compared to 29% last year.
Preferred asset classes
Office and industrial remain the preferred asset classes, selected by 33% and 29% of investors respectively. Investor interest in industrial and logistics assets is being driven by the structural change in the retail sector and the growth of e-commerce; however, there is a limited supply of assets in this sector available for sale, meaning that investors will continue to face challenges when sourcing deals.
Obstacles
Half of respondents identified asset pricing as the top obstacle to acquiring real estate assets. The tight availability of assets (21%) and competition from other investors (19%) were also identified as obstacles in all regions.
“The appetite for global real estate investment is increasing as more investors intend to deploy capital outside of their own region this year. Competition for assets is intensifying and many investors plan to move out the risk curve in search of higher yields—a trend that will result in a stronger focus on value-add and opportunistic investments. We believe that a low interest rate environment, economic expansion in an increasing number of markets, and corresponding improvement in real estate fundamentals will attract capital to commercial real estate,” said Chris Ludeman, global president, CBRE Capital Markets.
