Global investment in property assets is losing momentum

construction time again

The volume of global investment in property assets has slipped back for the first time since 2007, taking as a reference data from a 12-month moving average up until June 2o16. According to a Cushman & Wakefield report, this trend is due to the following reasons: Brexit, migrant pressure on Europe, the weakness of China’s economy and the US elections.

Total global investment in property assets is $919.7 billion(-5.7%). This is equivalent to approximately 91% of Spanish GDP. There has been a significant rise in New York ($24.890 billion; +58%) and a substantial decline in London ($24.880 billion; -37%).

The main conclusion of the Cushman & Wakefield report is that, more than ever, investment tends to be concentrated in “prime” assets, both in terms of location and quality, in the best cities. But there is an increasingly smaller number of assets with these characteristics on offer.

Bankinter analysts believe that thanks to the global recovery in real estate prices, these assets are now at levels far enough away from a situation of crisis. And in some specific markets, like London City, there is even a risk of a bubble starting.

“We belive that it’s likely the investment flow will begin to favour “Tier II” cities like Copenhagen or Madrid.”

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.