The latest iteration of the report, published annually, shows the highest level of real estate investment on record with a total of US$1.62tn compared to US$1.43tn in 2016 and anticipates a further improvement in 2018.
Asian investors were the major driving force behind these record levels of real estate investment, with money from the region accounting for more than half of all capital deployed and 46% of all cross-border activity. What is more, with the range of sources of capital within the region still increasing, this is likely to signal a period of sustained dominance.
According to the report, global investors from APAC increased their exposure to most markets, with the US a notable exception as a range of factors including the stage of the market cycle, uncertainty over US policies and domestic capital controls in China, all combined to deliver a fall in activity.
North America’s loss was Europe’s gain however, as investment from Asian sources grew by 96% y/y - primarily a result of several very large-scale transactions, including platform acquisitions marking steps towards the implementation of China’s Belt and Road Initiative.
Contrary to the conviction of some that European and American populism would result in a less adventurous investment community and a strengthening of domestic purchasing, local buying in both Europe and North America decreased on the year with the global increase in domestic investment driven exclusively by home buyers in Asia Pacific (+39.9% y/y).
The US remains the main target for international investors but its lead has fallen and regionally, Europe was strongly ahead, attracting 50% of all cross-border spending. At a city level, London persisted as the most sought after destination for international capital as concerns over Brexit were mollified by faith in the city’s long term appeal as well as a decline in Sterling, with affordability in the city proving too tempting for many cross-border investors.