the world's largest real estate investment market
By Sophie Elliott

U.S. Dominates Global Investment Market

According to Cushman & Wakefield report, the U.S. has surpassed China and is now home to the world's largest real estate investment market.

With improved relative economic growth, QE and low interest rates all working together towards encouraging investors to spread their interest in property, U.S. real estate investment performance looks set for continued improvement throughout the year.

In Cushman & Wakefield's annual global capital markets report International Investment Atlas released today at MIPIM, it's forecasted that global investment volumes will increase by 11% in 2015 to US$1.34 trillion, steered by Europe and the U.S.

The Americas experienced strong investment market performance last year with yields dipping to historic lows in several markets and volumes rising 11.4% to stand at 71% of their 2007 peak.

North America in particular is dominating the global market, with the region's economy a growing focus for international growth and its property market profiting from high levels of domestic and international liquidity in addition to a recovering occupational sector.

Throughout this year, the Americas are expected to continue to perform well, with continued increase in activity driven by the U.S., rising values from yield compression and rental growth. Latin America is predicted to see a gain in volumes (albeit slow) as investors look further afield for opportunities, however occupier performance in some markets will continue to be low. Volume growth of 15% is expected for North America and 8% in Latin America.

Janice Stanton, a senior managing director in Cushman & Wakefield's U.S. capital markets group, said: "In the U.S., leasing markets were slower to respond to the Fed's stimulus than investment and finance, but they too are now rising and with supply tightening, growth pressures and development opportunities are emerging in a range of cities and sectors. The initial investment rush for core product in gateway cities has now long since been followed by a second and third wave of capital looking to develop in these same top markets or to spread towards second-tier, decentralized or higher risk markets."

Cushman and Wakefield predict high prices and a slowing economy weighed on the Canadian market in 2014, will lead to mixed conditions again this year, but the low relative risk and long-term potential of the market in enough to attract more foreign investment assisted by a more competitive currency.

In terms of Latin America; Brazil offers good long-term potential but Mexico is currently looking like the leading major emerging market, with "a big concentration of younger workers, good education levels and one of the best live/work/play quotients in the region." Reforms are taking effect and foreign investment is increasingly welcome, but there's no doubt that the economy will benefit from growth in the U.S.

 

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