Global property investment expected to pick up in 2014: consultancy

Property investments around the world are picking up momentum and could rise 10 to 15 per cent next year, according to new forecasts by a property consultancy.

This would bring global property investments above US$1 trillion for the first time in seven years, predicted Cushman & Wakefield.

For this year, investment sales of property totalled US$978 billion, an estimated increase of 8.4 per cent from the year before, the consultancy said.

"The growing level of optimism and activity we are seeing in most regions has its roots in a belief that the global economy is set for calmer waters ahead and that financial imbalances are on the mend," said Mr David Hutchings, Cushman & Wakefield's head of Europe, Middle East and Africa research.

"This is leading to an increase in risk appetites which is manifest in a push to invest across borders, a move towards second-tier assets and a narrowing in the prime to secondary yield gap."

In the Asia-Pacific region, Cushman & Wakefield is tipping a 5 to 7 per cent rise in property trading activity next year, after a 1 to 2 per cent increase this year.

Mr John Stinson, the firm's head of capital markets in Asia Pacific, expects emerging Asian markets to be "busier next year, with Manila, Jakarta and Bengaluru offering great potential".

Asian property buyers will also show off their spending power to greater effect, he added. "The impact of Asian players on the global stage is set to grow exponentially, with China and Japan both increasing their overseas spending," Mr Stinson said.

"Second and third tiers of institutional and private capital [are] also set to flow faster from areas such as China, South Korea, Malaysia and Singapore."