Europe main target of doubling of investment in 2010: DTZ

Europe will be the main target of global investment in 2010, according to a new report by property adviser DTZ that predicts that $315 bn (EUR 219 bn) of capital will be available for investment in real estate worldwide. This is double the US$157 bn of capital transacted in the last 12 months.

DTZ Research says in its 'Great Wall of Money' report that the ratio of capital targeting real estate is 2:1, equivalent to $2 of capital chasing available stock compared to only $1 in the last 12 months.

Launched on 17 December, the report analyses data generated by DTZ Research's equity tracker, which covers capital-raising globally from a range of investor groupings. The picture shows little variation regionally. With a relatively higher amount of capital targeting Europe, the ratio is closer to 2.2:1, whereas in the Americas and Asia Pacific the ratio is 1.8:1 and 2:1 respectively.

Regional investment patterns are expected to continue in line with 2009 trends, with 50% of the capital ($156 bn or EUR 108 bn) targeting investment in Europe, 27% in Asia-Pacific ($85 bn) and 23% ($74 bn) the Americas.

However, Asia-Pacific and Europe are both relative winners, with more money targeting these regions for investment than they are raising and investing elsewhere; together, these regions are targeted for 77% of the total investment in 2010, but are only raising 49% of the available money, DTZ says.

DTZ, estimates that £36 bn (EUR 40 bn) of capital will be available for investment in real estate in the UK in 2010, double the £18 bn of capital transacted in the last 12 months.

Nigel Almond, Associate Director of Real Estate Strategy at DTZ Research comments: 'Most investors are adopting multi-sector and/or multi country strategies as part of sector and geographic diversification strategies, and reflecting the opportunistic nature of most fund mandates. 81% of capital is being directed towards multi, rather than single sector investments, and 70% of total capital is targeting two or more countries.'