Level of new capital targeting EMEA property dips: DTZ

The level of new capital available for investment in European property is set to fall 1% in 2013, bucking the trend for other regions, according to DTZ's latest Wall of Money report.

Compared with six months ago, DTZ estimates some $114 bn (€87 bn) will be available for investment in the EMEA region, down slightly from the previous figure of $115 bn.

The Americas see the biggest increase with available capital growing 8% to $124 bn, while the level of capital targeting Asia Pacific is up 3% at $82 bn.

Globally, some $320 bn (€246 bn) of new capital is forecast to be available for real estate investment in 2013, up 3% on the $311 bn reported six months ago, DTZ said.

The DTZ report tracks both newly raised capital and funds seeking to raise new capital to target direct real estate.

In the report released at MIPIM, DTZ said the growth in new capital available for investment continues despite a challenging environment for raising funds. Investors are still absorbing losses on existing legacy investments as uncertainty remains over the economic recovery. Increasing regulations are adding to the uncertainty and costs of running funds for those in a position to raise capital.

Nigel Almond, head of strategy research at DTZ, commented: 'The fall in capital targeting the EMEA region reflects a reduction in the target gearing ratio as the availability of debt remains restrictive. In aggregate the target gearing ratio in the region fell to 46% from 50% six months ago. This is consistent with the challenges both investors and lenders face in the current market environment. Encouragingly, the amount of available equity grew 6% to $62 bn, underscoring investors’ faith in the region’s markets.'