Marked increase in investments in real estate in 2010?

2010-03-08

If the economic revival seen worldwide holds up this year, 2010 could bring a step increase in commercial property investments, according to a report published by Cushman & Wakefield.
According to C&W’s estimates, such investments could increase by as much as 30%, while investment volume will then total €326bn. To compare, in 2009 the value of commercial property expenditure fell 23% to €270bn. The better situation, by and large, is a consequence of what is happening in Asia-Pacific, including in China, where commercial property investments rose 39% year on year. United Kingdom ranked second, followed by US.
In the fourth quarter of 2009, capitalisation rates stabilised in most countries, as a result of higher investor demand and limited supply, and amounted to 7.8% mid-2009 on average, which means they were down 20 base points year on year. According to C&W, lease rates went down 5.7% globally, with the deepest cuts seen especially in the first half of last year. In the opinion of specialists, the rates could go down an additional 5% in H1 2010, to stabilise at year-end.
Investors were most interested in investing in commercial property markets of countries in Asia-Pacific region, including Hong-Kong, Taiwan and New Zealand – where investment volume was up. Marked decreases in the number of transactions were noted in Australia and South Korea. Many investors continue to focus on commercial property investments on markets with significantly greater liquidity, including the UK, Germany, France or Canada. The second half of 2010 might see increased investor interest in commercial properties in the United States.

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