DTZ expects capital for global property investment to rise

  The amount of capital available to invest in global real estate is expected to rise 22% next year to $281bn (£175bn), according to research from DTZ.   According to the company’s The Great Wall of Money report, the greatest increase in available capital is predicted to be focused on the US – at $97bn – representing a 54% increase on estimates for 2010.   A further $71bn is targeting the Asia Pacific region – an increase of 29%.   However, DTZ added that, while the majority of available capital continued, to target Europe ($112bn), this was unchanged from the December 2009 estimate.   Nigel Almond, associate director of forecasting and strategy at DTZ and author of the report, said: “The current attractiveness of the US is in stark contrast to the situation a year ago.   “Most US markets were cold, offering expected returns below risk adjusted required returns.   “This opportunity remains largely unexploited to date, since transaction volumes in the US have not yet seen the levels witnessed in Europe and Asia Pacific.”   The DTZ report highlights the return of quoted and private property companies to the market with publicly listed companies now comprising 17% of available capital, compared with 4% reported in December 2009.   Capital from private property companies and individuals now accounts for 14% of available capital, rising from 3% previously.   Third party managed funds, while still accounting for the majority of available capital, have decreased their share from 77% to 49%.   DTZ said that during the first half of 2010 global investment volumes increased substantially to $133bn, double its level in the same period of 2009.   European investment activity totalled $54bn, representing a 86% increase.   nathan.cross@estatesgazette.com   To access all EGi news stories and commercial property data sign up for a free trial today, or visit the subscription options page to find out more.