Global property investment could top $1 trillion this year

But, Cushman & Wakefield notes, 2012 was not a year of steady growth but a difficult year in which an “exceptionally busy” final quarter masked three other quarters of “quite stagnant” levels of performance. Indeed, seasonality is a growing feature of the global investment market, with 2012 marking the third fourth quarterly spike in a row.

Nonetheless, the report predicts that “a modest recovery is starting to get under way”.

China and the USA led the rally at the end of the year, with mature European and Asian markets largely flat and many emerging markets down.

America saw stronger investment activity, a larger contraction in yields and more positive rental growth. Asia was stable, with a good start to 2012 offset by later falls, while EMEA bore the brunt of the market slowdown. The Americas share of global trading increased from 28 per cent in 2011 to 32 per cent in 2012, while EMEA slipped from 24 per cent to 21 per cent.

“A true change in market confidence and indeed momentum seems to have been confirmed in the early months of 2013 as major global risk factors are seen to be receding, albeit not yet disappearing,” reads the report.

The top countries for investment were “little changed”, with eight of the top 20 now in Asia compared to 10 in Europe and 2 in The Americas. China remained the largest global investment market after a surge in land sales at the end of 2012, although the US was not far behind, recording 88 per cent of China’s total investment.

“Fuelled by increased allocations to property by institutions and high-net-worth individuals, as well as increased stock coming to the market, investment volumes are likely to pick-up further in 2013,” concludes the report, forecasting a 14 per cent increase to reach above US$1 trillion for the first time since 2007.

“There is a growing consensus that we are past the work for the risk cycle and that 2013 risks are weighted towards the earlier part of the year.”

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