Despite the currently cautious mood in most global property investment markets, a stronger second half of the year is expected with a potential 20% hike in activity levels forecast, driven by increased confidence and a release of pent-up investor and tenant demand.
Global cities have enjoyed strong demand and activity over the past year as risk-averse investors have remained focussed on the biggest and the best. Few markets benefited more from this than New York which saw a 165% increase in investment in the year to Q3, knocking aside London to reclaim the top spot it last held in 2007. London however remains the top choice for foreign investors and by some margin over its nearest rival Paris.
In July 2010 the Financial Accounting Standards Board (FASB) issued guidance that would require all investment property to be measured at fair value (the “Investment Properties Project”). On May 11, 2011, on the heels of the completion of the FASB and International Accounting Standards Board (IASB) joint project on Fair Value Measurement, FASB addressed the final issues on the Investment Properties project that would require reporting investment properties at fair value under U.S. Generally Accepted Accounting Principals (GAAP) for certain companies that invest in investment properties.
The new Data Centre Risk Index ranks twenty countries according to the major risks likely to affect the successful operation and business performance of a data centre.
The Index is designed to help companies make informed and intelligent investment decisions about where to locate their data centres and to develop strategies to mitigate and manage a wide range of risks.
Asia Pacific investment activity in 1Q 2011 was moderate following a major investment improvement at the end of 2010. However, the investor sentiment, underpinned by easy liquidity, low employment rates and increased trade volumes, continues to be buoyant.
The resilience of the region highlights the strength of Asia’s property market, with commercial, retail and hospitality assets expected to receive increased investor interest.
According to our 2011 Global Investment Atlas, global investment rose 42% in 2010 to US$564 bn (€430 bn), the 3rd highest total of the past 10 years. The recovery gathered pace in H2 2010 despite the more hesitant economic mood of that time, possibly reflecting the fact that liquidity and income are still more important drivers of demand than growth.
This latest report suggests that investment is forecast to rise just 5-10% this year, hitting US$606 bn (€485 bn), led by North America, with China slowing as policy is tightened.
The recovery is here and is likely to gain momentum as 2011 progresses. The entire region will benefit from stronger growth in the US, but all the major countries in the America's will be in full-fledged economic expansion mode. Healthy employment growth will contribute to declining vacancy in most markets, on average, and lead to a turn up in asking rents in the next 12 to 18 months. We are already seeing this trend take place in some markets.
Asia Pacific is expected to outpace the world economy once again in 2011. Domestic demand will remain strong, with sustained improvements in hiring and incomes. China and India will be the region's star performers. Hong Kong and Singapore will remain the tightest office markets, while pockets of temporary weakness may appear in Shanghai and Mumbai due to the influx of new supply. Better office fundamentals will continue to spur investment activity particularly in the region's financial centers – Hong Kong, Singapore, Shanghai, Tokyo and Sydney.