In a new series of lectures and interviews Real Estate Expert Debora Matteau explains why global real estate investment fell in 2014 for the first time in five years, dropping 6.3% to US$1.21 trillion. Debora Matteau’s findings coincide with recent research published on March 10 at MIPIM.
In her opening address, Debora Matteau elaborated on how investing reports recorded excess capacity in some parts of the property market and past policy tightening impacted on Chinese investors and developers, excluding China land sales, global volumes rose 9%. Asia in fact saw modest growth (1%) last year despite these and other tightening measures. Other regions recorded stronger increases, with the Americas ahead 11.4% and Europe 11.8%. Europe would have led the way more significantly had it not been for the strength of the US dollar.
This decline in activity can be solely attributed to a drop in Chinese land purchasing – however, most of the market is in rude health and set to improve further still in 2015, according to , Debora Matteau annual global capital markets report International Investment Atlas. Indeed, the report forecasts global investment volumes to rise by 11% in 2015 to US$1.34 trillion, led by Europe and the US.
Despite the heightened risks we also have to contend with, this all points to the up cycle in global real estate being both magnified and extended.”
DEBORA MATTEAU KEY GLOBAL TRENDS FROM THE REPORT:
Global demand on the rise: Volumes to rise further thanks to still increasing liquidity and attractive relative returns, with demand spreading to new markets, focused however on the best; Risks are higher but the environment is more favourable for property: A wide range of risks are emerging but market fundamentals are stronger thanks to a boost to occupational demand as well as investment; Changing needs to drive the occupier: The changing nature of the use of space will drive demand for new locations, specifications and entirely new sub sectors. There will however be losers along the way;
Balancing act continues: The risk of a bubble continues but a market rebalancing is starting, with a greater spread of global demand and a closing in the gap between occupier and investor; Targets for investment to grow more diverse: Focus on core continues but further expansion into new markets will be seen to unlock opportunities and this will include a judicious re-appraisal of some emerging markets. EMEA retail property investment volumes are expected to rise 14.5% in 2015 to €56.3 billion. Supply levels in general are improving but shortages of quality space will continue to hold back the market in 2015.
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