Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/443516
36 January | February | 2015 Commercial Investment Real Estate development cycle exceeding demand on the heels of the slowing economy, many emerging country investors are turning to of shore/ cross-border opportunities in more-stabilized markets. Cross-border investment is another major driver of the tremendous increase in investment activity worldwide. Given demographic shif s with the aging population in the Americas and Western Europe, invest- ment professionals are seeking durable cash f ows to meet their liabilities. While 77 percent of the $1.1 trillion that transacted as of November 2014 stayed within the same country as the investor, the remaining 23 percent, or $255 billion, came from of shore investors. T is $255 billion is nearly three times the amount of cross-border investment just f ve years ago, with the largest regional exporter of capital being the Americas and the largest importer of cross-border capital being EMEA. Nearly $431 billion capital in 2014 came from Americas investors with 4.0 percent, or $17 billion, going to other countries within the Americas, 17.4 percent ($75 billion) going overseas, and the remain- ing 79 percent remaining in the country of origin. Within the capi- tal sourced from the Asia-Pacif c, 82 percent stayed within its own country, nearly 10 percent went intraregionally and 8.2 percent, or $37 billion, went to either Europe, the Middle East, and Africa or the Americas. In EMEA, intraregional investment is much more com- mon than the other two regions, accounting for nearly 30 percent of all capital. Another 10 percent went to acquiring oversees assets with 62 percent staying within the same country. Top Markets and Property Types Where have these cash-f ush investors turned? Gateway markets throughout the U.S., Europe, and Asia are the main benef ciaries. In fact, the U.S. ranked as the top global investment region according to the Association of Foreign Investors in Real Estate's latest investor survey. While prices have returned to and even surpassed previ- ous peak levels, the search for stability and yield has led investors within the U.S. to New York, Los Angeles, San Francisco, Boston, and Chicago. Of the top 20 markets ranked by sales volume, the U.S. captured eight spots with Manhattan as the top international and domestic market, attracting $47.3 billion through November 2014, including deals in contract. While secondary cities, including Dallas, Atlanta, Houston, and Seattle, pushed Washington, D.C., further down on the list, it is only a temporary drop as the current economic malaise has muted demand for D.C.'s real estate. Also of note, the New York City boroughs of Brooklyn and Queens have attracted an increased number of investors priced out of Manhattan. Of ce has been the favored asset class, attracting $119 billion, or 30 percent of all the capi- tal invested in North America, followed closely by the multifamily sector with $92 billion, or nearly 24 percent. Of all of the cross-border capital, the Americas captured $52 billion or 20 percent. In Asia, development sites have attracted a large share of capital but that appears to be waning given the concerns about the potential for oversupply. In particular, land sales in China, where investors have been lining up to develop new "cities," have skewed the data up dramatically. Of ce is the second favored product in Asia, as investors look to take advantage of the expanding of ce sector. APAC countries attracted 26.1 percent of cross-border capital invested with nearly $67 billion. Six of the top 20 markets for global sales volume were located in China. Tokyo made it to the third spot with $32 billion. With $29 billion invested year-to-date, Beijing ranked fourth behind Manhat- CCIM'S GLOBAL FOOTPRINT EXPANDS by Emiola Dosunmu As commercial real estate evolves into an increasingly global industry, the CCIM Institute is expanding its inter- national activities. At year-end 2014, the CCIM Institute had 540 designees and 175 candidates in more than 30 global markets. Over the past year, approximately 555 international stu- dents took CCIM courses held in Canada, Japan, Poland, Russia, and Taiwan. In addition, the CCIM Comprehensive Exam was administered in Poland, South Korea, and Japan, adding a total of 94 new international designees in 2014. The CCIM Institute is in a unique position to create and enhance a common level of knowledge and understand- ing of commercial real estate across many countries and cultures. As 2015 gets underway, CCIM will continue efforts to engage international members via the CCIM Connect member social network platform, through increased presence at global tradeshows, and during international networking events at the fall conference in Austin, Texas. In addition, the Institute has created an International Presidential Advisory Group to guide CCIM's global initiatives. Emiola Dosunmu is CCIM Institute's international opera- tions manager. Contact her at edosunmu@ccim.com. GLOBAL TRANSACTION VOLUME 2007–2014F $414.2 $245.6 $128.1 $170.7 $214.7 $198.4 $257.3 $267.4 $600.8 $213.7 $71.9 $163.6 $255.8 $312.2 $377.8 $390.6 $278.5 $174.6 $238.2 $389.9 $425.7 $456.7 $657.8 $431.5 $0 $100 $200 $300 $400 $500 $600 $700 '07 '08 '09 '10 '11 '12 '13 YTD '14 $ Billions EMEA Americas Asia Pac Source: Real Capital Analytics, Cushman & Wakefi eld Capital Markets