Jim Groch, Chief Financial Officer, CBRE, discusses global capital flows and investment outlook
Overview
More capital will flow into real estate in 2016 than in 2015, but the growth rate will slow
Transaction volume will increase in EMEA but likely decrease in Asia Pacific, with Japan as a possible exception
Oil price declines have impacted Middle Eastern investors unevenly; overall, significant capital flow will still originate from this region
Executive Summary
Jim Groch of CBRE, recently related that global events are introducing increased risk and volatility which will impact real estate investing in 2016. However, he expects the volume of transactions to increase year over year although at a slower pace. Specifically, he expects the volume of transactions to increase in the Europe, the Middle East, Africa and the Americas, but to decrease in the Asia Pacific region, with Japan as the exception.
The decline in oil prices is impacting Middle Eastern investors yet a couple of very large sovereign wealth funds are expecting to increase their investment in real estate outside of their own markets. Overall, expect significant flows of private capital out of this heavily oil dependent region.