Cushman & Wakefield’s international investment atlas outlook
According to Cushman & Wakefield’s latest International Investment Atlas released today, the global property investment market saw a modest 6% rise in activity during 2012 with volumes reaching €714bn.
In what was a difficult year in most markets, investment volumes rallied in Q4 signalling the beginning of real momentum and a return of confidence in the market which could see volumes this year increase 14% to exceed €815bn for the first time since 2007.
According to Cushman & Wakefield, the increase in activity this year will be led by North America and Asian markets and driven by increased allocations to property by institutions and high net worth individuals/families plus increased stock on coming to the market.
“2012 proved to be a miserable year for the investment market with volumes down 75% on the previous year. However, we have seen a great start to the investment market in the Czech Republic during the first quarter of 2013. We expect approximately €300 million of transactions complete in the first quarter which is already over half of the volume for the whole of 2012”, says James Chapman, head of Capital Markets at Cushman & Wakefield Czech Republic and Slovakia.
“Investors are clearly returning to the market as sellers have become more realistic about pricing so we are confident of seeing over €1 billion of deals in 2013”, says James Chapman.
In terms of market performance Asia remained the largest global trading block in 2012, accounting for 47% of market activity. The Americas saw stronger investment activity (32% of global trading) with EMEA clearly taking the biggest hit from the market slowdown (21%). By country , Finland, Norway, Switzerland and Ireland saw the highest growth in Europe.
Outlook and regional investment opportunities and strategies in 2013
David Hutchings, head of EMEA research at Cushman & Wakefield said: “There is a growing consensus that we are past the worse for the risk cycle and that 2013 risks are weighted towards the earlier part of the year which if proven true will support a more marked pick up in confidence and hence activity later this year. There will be a very polarised landscape in terms of risk and performance: by country, city and sector, and a key theme of the year will be about finding value in second tier markets as investor yield demand grows and as cost sensitive occupier interest grows.”
Stronger trading forecast for European markets 2013 but in an increasingly diverse market
European investment activity is likely to remain subdued in the short term by the lack of quality product and affordable financing but the signs are that more stock released by the banks, the public sector and corporate owners should produce greater activity in 2013 generating a modest 5% increase. Germany in particular will remain a top pick for most investors.
“The Czech market is set to benefit from an increasingly sophisticated and diverse domestic investor base as well as greater focus from international investors”, says James Chapman.