C&W sees global investment activity rise 20% in H2

Global property investment levels may rise 20% in the second half of 2012 compared with the first six months of the year on the back of increased confidence and a release of pent-up investor and tenant demand, according to Cushman & Wakefield’s International Investment Atlas 2012.

The adviser expects global volumes for the year to reach $710-720 bn (EUR 539-547 bn), little changed from the 2011 total. Activity is seen picking up towards the end of the year due to stronger demand as well as increased investment supply resulting from bank loan sales and recapitalisations.

Glenn Rufrano, global president & CEO of C&W said the securities and real estate debt markets are showing increased risk tolerance. ‘As the economic news firms, particularly in the sovereign debt and banking markets, these trends are expected to accelerate in the second half of the year,’ he said.

The Americas are set to see the fastest growth in investment activity again this year, led by the US. In terms of investment in Europe, London will continue to stand out due to the depth of its market as well as its long-term growth potential, C&W said. However, the UK capital is likely to be trumped by New York, which will benefit from the scale of its pent-up recovery potential.

In Continental Europe, the choice of markets for low-risk investors will widen in 2012, according to C&W. ‘Low-risk investors will continue to have a wider choice of markets than they realise with the focus on Germany and the Nordics, particularly for retail,’ said Michael Rhydderch, head of EMEA capital markets. ‘France and the UK are perhaps a little riskier now – with slower economic growth and more recent property price appreciation – but they offer good medium term growth and higher return potential in development and refurbishment in London and Paris.’

Russia and Turkey offered attractive prospects for investors seeking higher returns and an alternative to a crowded market like Poland, he added. ‘In particular investors need to look at where distress is likely to emerge but can be married with attractive long term fundamentals – be that from repositioning retail space in a range of markets, from an undersupply of modern retail or offices in some Italian cities or a shortage of modern logistics to rent in Spain and Portugal.’