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By an overwhelming margin, investors chose London as the world’s top commercial property market, according to an annual survey by Washington D.C.-based Association of Foreign Investors in Real Estate.
London moved past Washington D.C. and New York, with Paris and Tokyo rounding out the top five. In the 2009 survey, London was second, in a virtual dead heat with New York and Washington, but this year respondents chose London by a wide gap, the association reports.
Fifty-one percent identified the U.S. as the best opportunity for capital appreciation, compared to 37 percent in 2008 and 26 percent in 2007. Two-thirds of respondents said they planned to increase their U.S. investments in 2010.
The annual survey reflects the responses of 200 AFIRE members, who control more than $842 billion in real estate.
This year, 51 percent of the respondents identified the U.S. as the best opportunity for capital appreciation, compared to only 26 percent in 2007. And two-thirds said they plan to increase their investment in the U.S. in 2010.
The U.S. was still named the most “stable and secure country” for investment, but only by 44 percent, down from 57 percent in 2007. It’s the first time the U.S. has fallen below 50 percent in the history of the survey, the report notes.
“The financial crisis of the past year has obviously affected investors’ perceptions of U.S. real estate as ‘stable and secure,’” AFIRE chief executive James A. Fetgatter said in a release. “However, it is also apparent that opportunity lies within this instability since the U.S., along with the UK, show substantially higher scoring for expected capital appreciation.”
The survey found investors most interested in multi-family over office, industrial, retail and hotel properties. It was the second year in a row multi-family led the list, with hotels the least-popular investment.
Surveys respondents picked China, Brazil, India, Mexico and Turkey as the top emerging markets. Last year Brazil and India were the top choices, but this year there has been a shift toward China, with the bulk of investors indicating plans to place most of their emerging markets into China.
Read the full report here.
