Wealthy Investors Shifting Focus

By the end of this year, high net worth investors are expected to have poured more than US$1-trillion into residential property purchases, according to the latest report from the CBRE Group, which is the world’s biggest real estate investment management company.

“Investors continue to find real estate appealing, chiefly due to the relatively higher returns and stability on offer,” according to Chris Ludeman, global president of capital markets for the CBRE Group.  “Consequently, we believe that 2016 will prove to be another active year for the global real estate investment market, with capital flows six percent higher than in 2015. There is more than US$1 trillion of capital targeting real estate in 2016 and this volume of expenditure will maintain support for global real estate prices.”

Commenting on the findings of the company’s latest Global Investor Intentions Survey, Ludeman says that 82% of real estate investors around the world have indicated that that their buying activity will increase or remain the same this year compared to 2015, and that 50% have cited concerns about the health of either their own or the global economy as the reason for their decision.

“Investment strategies are shifting amid concerns about the health of the global economy. Not surprisingly, 2016 looks set to turn out as likely to be a ‘risk-off’ year, with investors reporting that they are more focused on core assets like real estate and less likely to seek secondary, value-add and alternative opportunities,” he says.  This view is of course likely to be strengthened now in the light of the UK’s surprise decision to leave the European Union, which has negatively affected equity markets and currencies worldwide, and wealthy property investors are likely to narrow their focus even further.

However, with their confidence in certain “tried-and- tested” locations in the UK and Europe now shaken, they may well be prompted to look for sound prospects elsewhere, especially if the exchange rate is favourable and lifestyle attractive.  This would put emerging HNWI hotspots like Cape Town and Johannesburg firmly in their sights over the next few years, along with Sydney and Brisbane in Australia, and Mumbai and Bengaluru in India.

Issued by Chas Everitt International
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