In 2017, there was over $1.7 trillion in "dry powder" available for global property investment.

For global real estate investors, North America is the preferred region. Jimmy johns

 

Stronger economic growth, the availability of debt capital, and a more positive outlook from investors are expected to drive global capital flows in 2017, according to CBRE's new Global Investor Intentions Survey for 2017, with $1.7 trillion of 'dry powder' available to deploy in real estate this year.

 

Because of the relatively high income yield, investors have adequate resources and a strong motive to engage in real estate, according to the 2017 global survey. Investors choose North America, with London, Los Angeles, and Sydney being the most favoured cities in each of the major areas. The most popular asset sector is office, followed by logistics, which grew substantially in 2017 and is a close second.

 

Investors have projected $1.7 trillion in real estate capital expenditures, according to the study results. In comparison to 2016, the majority of investors expect their buying activity to increase or stay the same. By a large margin, those investors who want to spend more (40 percent) outnumber those who want to spend less (16 percent), demonstrating that real estate as an asset class remains popular.

 

Despite a tumultuous global political environment and important European elections in France and Germany, investors remain unconcerned with global or local politics. The top fears of investors include an undefined "global economic shock" (22%), as well as "faster than expected interest rate rises" (21 percent). This year, the latter issue is felt considerably more strongly, which is the most significant change from 2016.

 

"Investors were hurting from the volatility in world stock markets this time last year; now, equities are at record highs, and economic confidence is upbeat. While there is uncertainty about the path of economic policy, there is a rising expectation that adjustments will help to unlock growth. While there are some clouds on the horizon—emerging market debt appears to be a problem, as does Greece's financial situation—economic momentum, combined with property's yield advantages, should ensure another year of significant capital flows into global real estate "CBRE's Global President of Capital Markets, Chris Ludeman, stated.

 

Investors had swung strongly in favor of core assets and away from secondary and value-added risk classes in last year's study. With a drop in demand for core assets and an increase in interest in core-plus and opportunistic assets, this trend has largely reversed in 2017. The high cost of real estate is cited by nearly half of investors (48%) as the biggest impediment to capital deployment. This increasing interest in core-plus and opportunistic stocks reflects that problem, but it also indicates that investors are slightly more risk-averse than last year.

 

Los Angeles is the most popular investment destination in the Americas. The city of Dallas/Fort Worth has risen to second position. Washington, D.C. is the greatest mover, jumping into the top six for the first time after missing out last year. Atlanta advances one spot, while Seattle drops to seventh place after failing to make the top tier last year.

 

London is the most appealing destination for investors in EMEA. Berlin has risen two spots to become the second most popular vacation spot. While there is some fear about European elections, it does not appear that this has affected demand for real estate so far. Despite the uncertainty surrounding Brexit, the survey suggests that investors are becoming more interested in the United Kingdom.

 

In APAC, Sydney is once again the most popular destination, with Tokyo a distant second. Because of their liquidity, openness, and excellent long-term prospects, APAC investors continue to flock to Australia's cities. Seoul has slipped out of the top six, with Hong Kong taking its place.

 

Investors' favored sector is office (26 percent), followed by multifamily (21 percent) and logistics (22 percent). The preference for retail has decreased dramatically from the previous year (21percent to 12 percent). Logistics and multifamily are two sectors that have performed exceptionally well this cycle due to improvements in technology and demographics, and investors situated in the Americas have a strong preference for them. Investors in EMEA and APAC are increasingly interested in the office and retail sectors.