Investment Climate to Improve in 2011

The investment climate for top assets will improve in 2011, it has been claimed, but buyers will have to be content with lower returns than in the past. According to the Emerging Trends in Real Estate 2011 report from the Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC), the market is set to bounce back....

The investment climate for top assets will improve in 2011, it has been claimed, but buyers will have to be content with lower returns than in the past. According to the Emerging Trends in Real Estate 2011 report from the Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC), the market is set to bounce back.

To this end, the ULI is predicting average returns of 7.5 per cent for institutional quality private real estate equity and returns of 8.2 per cent on average for REITS. While financing availability will continue to grow in 2011 and sellers will become more willing to put assets on the market, both lenders and investors remain troubled by macro-economic trends, the report warns.

However, while the ULI and PwC have claimed that the environment will be favourable for those making real estate investments, the organisations added that it would require buyers who have the patience to hold onto their properties for the long-term. Indeed, though the commercial real estate industry has now escaped the worst of the financial downturn, the time of "flipping" is over, the report said.

- Thursday 21 October 2010

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