Commercial Real Estate Investment Falling Except Apartments Says RCA

The latest report from Real Capital Analytics has found that $157 billion was invested in global commercial real estate in the second quarter, a slight upturn on the first quarter according to the report. However...

The latest report from Real Capital Analytics has found that $157 billion was invested in global commercial real estate in the second quarter, a slight upturn on the first quarter according to the report. However, this slight upturn was cancelled out by a 23% drop in investment in the first six months of the year, compared to the same period of 2011.

The big success story of the report is the apartment sector, which was the only sector to see investment in the first half of this year increase compared to last year. Indeed, it increased by almost as much as investment as a whole declined at 22% (compared to the 23% laid out above).

Perhaps because of the increase in American investors, the London-metro market was the top in terms of investment volume in the first six months of this year according to RCA. Unfortunately the $9.51 billion invested in during the period still represents a 5% decline on the same period of 2011.

Second was the Tokyo office market, which saw $6.22 billion in investment representing a 19% decline on the previous year.

Third placed New York metro's office market was worse, with $5.85 billion in investment down 21% compared to last year. In 4th the Paris office market saw investment down just 7% on the year at $5.19 billion.

But again, the big success story is apartments. Investment in the next biggest market, New York metro apartments was 75% higher in the first six months of this year than last year at $4.29 billion.

One other trend noted by the RCA report is that American investors are once again taking over in European commercial real estate markets. After years of being only minor players in the European property scene, American investors have once again become the major buyers of European commercial real estate, according to the RCA report. UK, Germany and France were the top 3 markets favoured by the American hordes, and the trend was particularly noted In the first half of this year said the report.

RCA managing director Dan Fasub says that Americans are taking advantage of the situation in Europe, where the local players are having trouble raising construction finance or are scared to invest.

- Thursday 06 September 2012

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