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CBRE Report: Global Investor Real Estate Intention Survey 2016
CBRE’s 2016 Global Investor Intentions Survey, presented during the MIPIM World’s Property Market exhibition earlier this month in Cannes, reflecting the input of more than 1,250 major investors worldwide, shows that investors plan to remain highly active despite recent market volatility, with 82% of respondents globally indicating that their investment activity will be the same or greater compared to 2015. Download Full Report here
CBRE Executive Summary
We believe that 2016 will be another active year for the global real estate investment market, with capital flows likely to increase 3% to 6% from 2015 levels in local currency terms CBRE’s 2016 Global Investor Intentions Survey, reflecting the input of more than 1,250 major investors worldwide, shows that investors are still strongly expansionary, with 82% of respondents indicating that their investment activity will be the same or greater compared to 2015.
Investors continue to find real estate appealing, chiefly due to the relatively higher returns and stability on offer. Our survey suggests that there is more than US$1 trillion of capital targeting commercial property investment in 2016, which should help support current pricing levels.
Investment strategies are shifting amid concerns about the health of the global economy, which is by far the top worry for investors. Not surprisingly, 2016 looks likely to be a “risk-off” year, with investors reporting they are more focused on core assets and less likely to seek secondary, value-add and alternative opportunities.
North America and Western Europe, two of the stronger pockets of
the global economy, are the most popular destinations among survey respondents. By contrast, Asia Pacific looks less attractive to investors, no doubt reflecting concerns about the China slowdown, the murky outlook for other emerging markets and overbuilding in some locations.
In terms of cities, investors continue to express a strong preference for gateway core cities. In EMEA, London topped the list but it is much less popular than in previous years. If the major German cities are grouped together, they are slightly ahead of London.
In the Americas, Los Angeles, New York and Dallas-Ft. Worth were named the top three most preferred targets. In Asia Pacific, two Australian cities — Sydney and Brisbane — were among the top five most preferred cities.
Interest in cross-border investment remains strong, with two in five respondents stating that they are seeking opportunities outside their home region. This is especially true of Asia Pacific-based investors, who are more likely to invest outside their home region compared to their colleagues in the Americas and EMEA.
In terms of asset classes, office remains the most popular property type globally, though interest is down a bit compared to last year. There is a notable uptick in interest for retail and multifamily assets from 2015.
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