Patterns of Global Capital Flow

Similar documents
Real Estate Investment Beyond(?) the Global Credit Crisis

IPD Global Annual Property Index launch 15 April 2013

Global Real Estate Outlook

GLOBAL PERSPECTIVES ON RISK & RETURN

Supplemental Information Fourth Quarter 2011 Earnings Call

IT ONLY TAKES ONE INDEX TO CAPTURE THE WORLD THE MODERN INDEX STRATEGY. msci.com

DOES YOUR PORTFOLIO REFLECT EUROPE? THE MODERN INDEX STRATEGY. msci.com

HOW DO YOU DEFINE YOUR BORDERS? THE MODERN INDEX STRATEGY. msci.com

European Market Outlook The Risks & the Opportunities Guy-young LAMÉ Associate Director Research Europe, Invesco Real Estate

Investor Presentation

HOW DO YOU DEFINE YOUR BORDERS? THE MODERN INDEX STRATEGY. msci.com

Global Real Estate Investments Opportunities and Risks in the Late Stage of the Cycle. Wolfgang Kubatzki, Managing Director, Scope Investor Services

May Global Growth Strategy

Supplemental Information Earnings Call Third-Quarter 2015

Global. Real Estate Outlook. Jeremy Kelly Global Research. David Green-Morgan Global Capital Markets Research

Supplemental Information Earnings Call

Supplemental Information Second-Quarter 2013 Earnings Call

NEUBERGER BERMAN Environmental, Social and Governance Policy

Up We Go Again Financial Threshold Increases Effective 1 July 2016

EUE3 vs. EUE2 July 2009 Model Structure Comparison

THE AFRICA OPPORTUNITY

FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION AND NOT FOR USE BY RETAIL INVESTORS

Will Rising Interest Rates Pummel Your Portfolio?

Investor Presentation. 53,000 employees, 200 offices, 75 countries, 1 global platform

OECD Report Shows Tax Burdens Falling in Many OECD Countries

PROPERTY EU EUROPEAN LOGISTICS INVESTMENT BRIEFING

Version number Effective date Person in charge Changes

EMEA Investor Intentions Survey 2015

Madrid, October Comparative Analysis of Salaries in Investment Banking in Spain

METHODOLOGY BOOK FOR:

Investment Advisers and Funds New Treasury Report Form for Foreign Claims and Liabilities

Investor Presentation. 53,000 employees, 200 offices, 75 countries, 1 global platform

An Overview of the Foreign Corrupt Practices Act

BETA ADVANTAGE SUSTAINABLE INTERNATIONAL EQUITY INCOME 100 INDEX

Cross-Border European Insolvency in the Brexit Era

Islamic Finance News Forum London, October 17 th, Christine Chardonnens MSCI Barra

LIBERTYQ GLOBAL DIVIDEND INDEX

ING OFFICE FUND. Annual General Meeting 31 October 2005 CREATING VALUE

Bank of America Merrill Lynch Global Securities Operations

October MYTHS ABOUT FRANCE

Move to T+2 settlement cycle: Singapore market

IRS Moves Forward with Plan to Change the Determination Letter Process

FTSE Global Equity Index Series

Andrew Goodwin Lead UK Economist, Oxford Economics

Changes to Hedge Fund Disclosure and Reporting Obligations

Executive Summary. The Transatlantic Economy Annual Survey of Jobs, Trade and Investment between the United States and Europe

Importance of the amendment to the Public Procurement Law for the expenditure of EU funds

GLOBAL REAL ESTATE PERFORMANCE IN 2017

Second Quarter Trading Update 9 July 2010

RESEARCH INVESTMENT MARKET

MANDATORY PROVIDENT FUND SCHEMES AUTHORITY. Guidelines on Recognized Exchanges

European Commercial March European Investment. SPOTLIGHT Savills Research. Alternative Sectors Yield Compression Korean Investment

SEC Issues Risk Alert on Custody Rule, Reinforcing Its Message to Registered Investment Advisers in Its Examination Priorities for 2013

Savills plc. Results for the six months ended 30 th June August 2017

HSE HR Circular 009/ th March, Subsistence Allowances Abroad

International Statistical Release

William Blair Growth Stock Conference

Corrigendum. OECD Pensions Outlook 2012 DOI: ISBN (print) ISBN (PDF) OECD 2012

HIPAA s New Rules: Expanding Scope, Clarifying Uncertainties, and Reinforcing Fundamentals

EVCA Private Equity Activity Survey 2007 Europe

Merrill Lynch Banking & Insurance Conference

CFTC Expands Interest Rate Swap Clearing Requirements

MANDATORY PROVIDENT FUND SCHEMES AUTHORITY

ABN AMRO (Channel Islands) Limited Order Execution Policy

Snapshot Survey Of Impact of Economic Crisis

GDP projections for major economies

METHODOLOGY BOOK FOR:

Sal. Oppenheim European Financial Conference

MANDATORY PROVIDENT FUND SCHEMES AUTHORITY

Changes to Price Source, Data Delivery and Holiday Calendars for the FTSE Fixed Income Indexes (formerly the Citi Fixed Income Indexes)

International Investment Arbitration in Europe: Year in Review 2015

Iranian Nuclear Accord Reached, But Specific Implementation of Meaningful Sanctions Relief Will Not Be Immediate

Real estate to enjoy longer low interest rate regime

OECD Health Policy Unit. 10 June, 2001

Franklin Templeton Investments Our Global Perspective

Introducing the New Multi-Level Marketing Governing Act

UBS Conference. May 14, 2007

SEC Proposes New Limits on Funds Use of Derivatives

Global Capital Markets Will New Sources of Capital Extend the Cycle?

Making Our Mark Outside of North America

Health Referral Benefit Programme

Table 1: Foreign exchange turnover: Summary of surveys Billions of U.S. dollars. Number of business days

IMPORTANT TAX INFORMATION

Investor Presentation

MSCI FACTOR MIX A- SERIES INDEXES METHODOLOGY

Spain France. England Netherlands. Wales Ukraine. Republic of Ireland Czech Republic. Romania Albania. Serbia Israel. FYR Macedonia Latvia

Outlook 2015: Europe & Germany

ERISA Fiduciary Issues for Plan Sponsors: What Do 401(k) Plan Fiduciaries Need to Know About Revenue Sharing?

NOTE. for the Interparliamentary Meeting of the Committee on Budgets

FTSE All-World ex Fossil Fuels Index Series

BRITISH EXPORTERS ASSOCIATION

International Investment Arbitration in Europe: Year in Review 2016

Introducing Alter Domus A GLOBAL OUTLOOK FOCUSED ON LOCAL NEEDS YOU INVEST, WE SET UP. YOU DEVELOP, WE ADMINISTER.

Update: EU VAT on E-Commerce

Comparison of the UK and Italian Hotel Investment Market. March March

10 reasons to invest in France

USE OF NDRS & SELL-SIDE CONFERENCES Among Senior IROs in German-Speaking Countries

Latham & Watkins Corporate Department

EU BUDGET AND NATIONAL BUDGETS

LIBERTYQ GLOBAL EQUITY INDEX

Transcription:

Patterns of Global Capital Flow Real Estate Capital Flows (from one continent to another) have been more than $100 billion in each of the last three years North America was the largest source of cross-regional capital flows every year between 2007 and 2015, but was been overtaken in 2016. Over the last ten years that amounts to over $300 billion globally, 80% of which was spent in Europe. Asia has leapt as a source of real estate investment in the rest of the world, from 6% of flows in 2007 to 37% in 2016. Europe was the favoured destination of Asian Capital, but has been overtaken by North America in 2015/16. Europe European investors generally account for around 15% of cross-regional flows. Their cross-border purchases within Europe are four times higher than their purchases outside Europe. Middle East is a steady source of cross-regional investment on a par with Europe. 60% of flows out of the Middle East end up in Europe. 1 COUNSELORS OF REAL ESTATE PATTERNS OF GLOBAL CAPITAL FLOW

SOURCE OF CROSS-REGIONAL CAPITAL FLOWS NORTH AMERICAN CAPITAL HAS TAILED OFF IN 2015-16 US dollars (billion) 70 60 50 40 30 Europe 12% Middle East 14% Asia 31% North America 38% Aggregate since 2013 20 10 0 North America Asia Middle East Europe Other 2013 2014 2015 2016 Source: Research, 2016. 2 COUNSELORS OF REAL ESTATE PATTERNS OF GLOBAL CAPITAL FLOW

Hong Kong Los Angeles Shanghai New York Seattle Boston San Francisco Milan Washington DC Chicago Sydney Paris Miami Madrid Melbourne London WE Seoul Atlanta London City Tokyo Berlin Frankfurt REAL ESTATE SPREADS OVER GOVERNMENT BONDS EUROPE IS THE BIGGEST RECIPIENT OF CROSS-REGIONAL CAPITAL Prime office yield (net) relative to 10-year government bond, Q4 2016 6.0 5.0 4.0 3.0 2.0 1.0 0.0 1.0 2.0 3.0 4.0 Americas Markets Asian Markets EMEA Markets Pacific Markets Source: Research, Macrobond, Q4 2016. Prime Office Yield 10-year Government Bond Spread 3 COUNSELORS OF REAL ESTATE PATTERNS OF GLOBAL CAPITAL FLOW

North American Capital is more diverse All cross-regional capital is strongly biased to offices and to gateway markets, but North American capital goes deeper into the market than others Example 1: Gateway Cities Gateway cities account for a huge proportion of cross-regional investment typically the top ten global cities receive 60%* of such flows. North American capital is far less concentrated. The top ten cross-regional destinations for North American capital account for only 33%* of the total. Example 2: Sector Choice The European market typically* breaks down 43% offices, 24% retail, 9% industrial. Mixeduse and mixed portfolios make up about 4% of transactions. Investment from Asia and the Middle East is biased to the office sector 62%. North American investment is underweight offices 39% and overweight industrial (13%) and mixed-use (9%) *Based on 2013-2016 4 COUNSELORS OF REAL ESTATE PATTERNS OF GLOBAL CAPITAL FLOW

KEY DESTINATIONS IN EUROPE: TOP COUNTRIES 2013-2016 Total investment from North America, % of total Total investment from Asia, % of total UK London UK London Germany Germany France France Spain Spain Netherlands Belgium Italy Italy Ireland Netherlands Poland Denmark Sweden Russia Norway Portugal Russia Switzerland Czech Republic Czech Republic Source: Research, 2016. 5 COUNSELORS OF REAL ESTATE PATTERNS OF GLOBAL CAPITAL FLOW

SECTOR CHOICE OF CROSS-REGIONAL INVESTORS IN EUROPE Investment from North America, % of total 2013-2016 Other Cross-regional investment, % of total 2013-2016 Offices Offices Retail Retail Industrial Industrial Mixed/Multi Use Mixed/Multi-Use Hotel Hotel Other Other Source: Research, 2016. 6 COUNSELORS OF REAL ESTATE PATTERNS OF GLOBAL CAPITAL FLOW

Early mover advantage US investors into have a reputation for anticipating the cycle and being early movers in recovering markets Spain The Spanish market was very badly hit by the GFC and market activity fell to 20% of the pre-crisis level. There was a strong recovery in 2014 and 2015. US investors represented over 25% of transactions in Spain in 2013 and 2014 moving in ahead of the recovery (against only 10% over the rest of the last decade. Italy US investors have transacted more than 25% of real estate transactions in Italy in 2013-2015 Over that time transaction activity increased by over 200%, prime office yields in Milan dropped from 5.3% to 4%. 7 COUNSELORS OF REAL ESTATE PATTERNS OF GLOBAL CAPITAL FLOW