Beyond market fundamentals, sentiment is the greatest driver of commercial real estate investment. Unfortunately, investor sentiment is sometimes difficult to gauge. The Colliers International Global Investor Outlook Report for 2016 canvasses predictions of over 600 investors, producing meaningful insight into what the upcoming year will hold for real estate markets around the globe. The survey respondents collectively represent real estate holdings of approximately $1.5 trillion, which lends some heft to their opinions.
One of the key takeaways from the report is that sentiment towards investing in real estate remains very positive. Over half of participating investors with multi-asset portfolios forecast an increase in their real estate allocations into 2016, and the U.S. continues to be a preferred destination for global capital.
Global cross-border investors will gravitate towards the liquid markets in gateway cities such as London, Tokyo, New York and Sydney. Many global investors also plan to leverage local expertise and acquire platforms so that they may place large amounts of capital with confidence.
Speaking of confidence, 2016 is likely to see a greater emphasis on secure income and asset management as a performance driver. Some investors are looking to so-called “overcrowded” core markets for longer-term investments. Despite volatility in some markets, long-term strategies remain driven by fundamentals. As John B. Friedrichsen, the report sponsor and Global CFO at Colliers International states: “The days of ‘pass the parcel’ are over, long-term secure investment in core markets will be the norm. At the other end of the risk spectrum large volumes of capital already raised will increasingly seek out opportunities in tier-two cities and recovering markets.”
The full Global Investment Outlook Report for 2016 goes through investor sentiment region by region with quotes and infographics that will impart a wealth of knowledge to investors, commercial real estate professionals, or anyone interested in the property business. Download it today to see the scope of global investors’ predictions for the upcoming year.
Visit the Global Investment Outlook website to download the full report.