Global realty market is likely to witness an investment of more than dollar 1 trillion this year, up 6 per cent from 2015, as investors continue to find real estate appealing on relatively higher returns, according to property consultant CBRE survey.
India’s real estate sector is also expected to get some benefit, though a small share, of the global real estate investment funds, the consultant said.
“Global real estate investors remain strongly expansionary in 2016, with more than USD 1 trillion of planned expenditures anticipated to enter global real estate markets – 6 per cent higher than in 2015,” CBRE said in a statement.
North America is the most popular destination for investment (48 per cent), ahead of Western Europe (26 per cent). London, Los Angeles and Sydney are top regional targets of investors.
The CBRE’s Global Investor Intentions Survey, conducted between January and early February, asked investors how much capital they would deploy in real estate purchases this year.
Majority of investors (82 per cent) indicated that their buying activity would increase or remain same as in 2015.
“The results reveal there is approximately dollar 1.16 trillion of capital targeting property investment in 2016 – an increase of 3 per cent from 2015 levels in local currency terms,” CBRE said.
Commenting on the survey findings, CBRE’s Global President Capital Markets Chris Ludeman said: “Investors continue to find real estate appealing, chiefly due to the relatively higher returns and stability on offer.”
“We believe that 2016 will be another active year for the global real estate investment market, with capital flows 6 per cent higher than in 2015. There is more than dollar 1 trillion of capital targeting real estate in 2016 and this volume of expenditure will maintain support for global real estate prices,” he added.
Stating that investment strategies are shifting amid concerns about the health of the global economy, Ludeman said 2016 looks likely to be a “risk-off” year, with investors more focused on core assets and less likely to seek secondary, value-added and alternative opportunities.
“Real estate remains an important asset class for domestic and overseas investors. The year 2016 promises to be a good one for the industry and it is expected that India’s real estate sector will get some benefit, albeit a small share, of the global real estate investment funds,” said Anshuman Magazine, Chairman & MD, CBRE South Asia.
In terms of asset classes, CBRE’s report said office (30
per cent) remains the most popular property type globally, though interest is down slightly compared to last year. “There is a notable uptick in interest for retail (21 per cent) and multifamily assets (20 per cent) from 2015”.