USA is “most desirable” for real estate investment next year, say experts
US property is the "most desirable" for investment in 2013, according to Colliers International.
The firm's Global Investor Sentiment Survey found that Asia and Western Europe - particularly London and Paris - were top of investors' wish lists for next year's property investment. But America is the most desirable, as the market continues to recover.
Investment volumes are expected to grow slowly and steadily in Western markets through 2013, adds the report, and core investment opportunities will become more difficult to find as investors hone in on just a few key locations.
Asian, EMEA and Latin American investors were the most likely to access funds from outside their regions. Asian investors sourced just 40% of funds locally with the United States (20%) and Western Europe (19%) providing significant capital. In Latin America, the US provides almost a third of all funding with Western Europe providing just under 15%. Canadians are almost self-sufficient with around 78% of investment funded locally.
Investors consistently chase properties in the same, "safe" markets including London, Paris, Frankfurt, Hamburg, Munich and New York. London and New York are the only two markets identified as key investment areas by investors from other regions. Investors will continue to target these markets through 2013, while monitoring the effects of the U.S. election result and continuing problems in the Eurozone.
Though many investors prefer to invest in their local markets, approximately 1 in 4 plan to look to overseas for real estate opportunities.
Highlighting the most noticeable trend this year Tony Horrell, CEO, U.K. and Ireland, Colliers International said, "Major investors are becoming more critical when selecting their investment locations. This is supported by the overarching themes we found when asking respondents about their investment strategies - they are more likely to look at home locations first, and when they do look at international opportunities, they are far more specific about the individual markets and sectors in which they are interested.
Horrell added: "The survey also found that the availability and price of debt finance will remain an issue in a number of territories, particularly in EMEA, as stringent lending requirements endure and LTVs remain low. This is opening the door for new lenders, in the form of insurance companies, and the resurgence in the provision of mezzanine finance.
"As a result, we anticipate more activity from specialist debt funds seeking higher returns than those available from core direct real estate investment."
Despite Europe's economic woes and the fears of a Eurozone break-up, many European investors (60%) see this period as a good time to invest, with a similar proportion looking to expand their portfolio in the short term.
London and major German cities continue to attract international investment due to their safe haven status. In particular, 74% of investment in London has been from or involved international sources through October this year.
Lack of supply is seen as a key constraint, particularly given investor focus on CBD offices, and the scarcity of development in many European markets that has exacerbated the shortage of high quality properties.
Horrell concludes: "In 2013 we will see more new lenders and mezzanine funds to partially replace the void left by retreating mainstream banks. And more generally, 2013 will be a year of continued recovery, with investment volumes showing modest growth as investors accept the new norm and sentiment improves."
Get ahead of the Pack
Browse our listings of US real estate:
http://usa.themovechannel.com/property