Available capital for EMEA investment falls 3%: DTZ

The amount of available capital targeting real estate in the Europe, Middle East and Africa (EMEA) region in 2012 totals $107 bn (EUR 81 bn), down 3% on the previous mid-2011 estimate, according to DTZ’s latest Great Wall of Money report.

The Great Wall of Money research tracks new capital targeting direct real estate and the investment opportunities this capital is targeting.

DTZ said the decline reflects the difficulty funds are having deploying capital as uncertainty over the ongoing sovereign debt crisis persists.

Worldwide, $298 bn (EUR 226 bn) of capital will be available to invest in real estate during 2012, a 6% fall on the mid-2011 estimate. It also represents a 9% fall on the peak recorded a year ago.

DTZ said its research showed a fall in new capital in all three regions. The biggest decline was in APAC where new capital dropped 9% to $83 bn following another year of strong investment activity. Available capital in the Americas fell 5% to $108 bn, though it again attracted the most capital of all regions.

The amount of equity available for investment in 2012 has increased 4% to $139 bn. This has been more than offset by a 12% reduction in debt available to $160 bn. As a result, DTZ said, funds are reducing their target gearing as they seek to place more equity into deals.

DTZ also expects more cross-border activity in 2012. In the Asia Pacific region, 33% of investment could come from outside the region (inter-regional) with a further 30% coming from within the region (intra-regional).EMEA is set to attract the second-highest level of inter-regional cross border activity at 19%. In contrast, activity in the Americas is set to remain dominated by domestic investment at 86%.