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March | April | 2016 Commercial Investment Real Estate
Markets to
Watch
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Global investors are paying more attention to cross-border investment opportunities in a bid to counter risk
through portfolio diversity. In Asia-Pacif c, Australia and Japan are preferred investment choices, with Tokyo,
Sydney, and Melbourne holding the most appeal for commercial real estate investments, according to Colliers
International. In Australia, investors target CBD of ces, new development, and industrial logistics, while in
Asia, value-add opportunities are also among the top choices. And despite disruptive signals from China, Asia-Pacif c investors
remain conf dent and 50 percent expect to increase their portfolios in 2016.
Top Emerging
Countries for Real
Estate Investment
1. Brazil (#1 last year)
2.
China (#2 last year)
3.
Mexico and Chile (#3 and
#4 respectively last year)
5.
India and Peru (#6 and #8
respectively last year)
Source: Association of Foreign Investors in Real Estate
Global Investors Target
Americas
Percentage of investors by country of origin
Middle East 31%
Europe 27%
Asia 24%
Australia 11%
Source: Colliers International
Skyscraper Rents
City Prime rent (U.S.$/sq ft/yr) Six month' s growth
Hong Kong $255.50 1.9%
New York City $153.00 2.0%
Tokyo $125.00 3.4%
London $122.00 10.7%
San Francisco $105.00 8.2%
Source: Knight Frank
Going Green in Europe, 2012–15
Planned green building activity per sector
New commercial construction 59%
Existing building retrofi t 56%
Mixed-use development 30%
New residential high rise 21%
Source: Savills
German billionaire Klaus-Michael Kuehne has reportedly bought one of
Vancouver's prize of ce towers, the 36-story Royal Centre, for about CA$425
million, or CA$725 psf, from Brookf eld Of ce Properties. T e deal traded
at a 3.7 cap rate, according to T e Financial Post, but, according to Bloom-
berg News, that's the price of admission to play in Canada's tightly traded
commercial real estate top tier, dominated by home-grown institutional
investors. Given the weakened Canadian dollar, which dropped 13 percent
last year against the strengthening U.S. dollar, Canadian trophy properties
of er an alternate, cheaper safe haven for foreign investors that still has an
upside. "Vancouver is right up there with London and Manhattan as the most
desirable and safe market in the world," said Paul Morassutti, CBRE Canada's
head of valuation and advisory services.
Canada's
Big Deal
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