Sydney has emerged as the fourth top city for investment, ahead of New York – a ranking CBRE’s Head of Capital Markets Josh Cullen attributes to the continued demand for Australian investment opportunities amid some of the highest returns globally.
Global real estate investors remain confident and their intentions are expansionary, with more than half planning to increase their acquisitions in 2015, according to CBRE’s Global Investor Intentions Survey 2015.
Globally, 53 percent of investors plan to increase their purchases this year. Investor appetite for cross-regional acquisitions has increased significantly with 38 percent of respondents intending to invest outside their own region this year–up from 28 percent in 2014.
Among these investors, 31 percent identified Western Europe as the top destination. Despite the slowdown in China, 27 percent of investors regarded Asia as their preferred investment destination, with economic growth there still outpacing other regions and continuing to offer significant long-term growth potential.
CBRE National Director, Capital Markets, Josh Cullen attributed Sydney’s high ranking to the continued demand for Australian investment opportunities.
“This ranking is no surprise, with Australia offering some of the highest returns on a global basis across all our core sectors, with returns on secondary assets being even more attractive. We are starting to see positive signs in the office sector in a range of Australian CBD markets, which will underpin growth expectations,” Mr Cullen said.
Global President of CBRE Capital Markets Chris Ludeman said, “The appetite for global real estate investment is increasing as more investors intend to deploy capital outside of their own region this year. Competition for assets is intensifying and many investors plan to move out the risk curve in search of higher yields–a trend that will result in a stronger focus on value-add and opportunistic investments. We believe that a low interest rate environment, economic expansion in an increasing number of markets, and corresponding improvement in real estate fundamentals will attract capital to commercial real estate.”
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