Investors to boost purchases on US growth
A majority of commercial real estate investors plan to be net buyers this year, the highest level since 2014, spurred by prospects of increased U.S. economic growth and less regulation, a survey of investor intentions showed.
The percentage of investors who intend to buy property in 2017 rose to 67 percent from 65 percent last year and 60 percent two years ago, according to a survey by CBRE Group Inc, the world’s largest commercial real estate services firm.
The survey of institutional investors, private property and private equity firms, among other investors in commercial real estate, shows 83 percent plan to maintain or increase their purchases this year.
But investors plan to reduce risk with more conservative strategies. The survey showed the industrial sector, such as warehouses and data centers, as the most attractive asset class in 2017, garnering 38 percent of investor intentions.
Fifty-four percent of institutional investors, composed of sovereign wealth, insurance and pension funds, plan on investing more than $1 billion in commercial real estate, CBRE said.
U.S. gateway cities drew the most interest as investment destinations, with Los Angeles maintaining the No. 1 preference from last year, followed by Dallas-Fort Worth and New York City.
Still, investors remain concerned about asset valuations, while they see global economic shocks and rising rates as the greatest threats to property markets, CBRE said.