Events

Vancouver Real Estate Forum
April 25, Vancouver

Employs 1,985 professionals.

45 offices; a presence in 24 countries.

5,000 customer relationships.

$54 billion in total assets.

$71 billion assets under management.

Investment Notes

For all the action in emerging markets, global real estate investing remains pretty well entrenched in the large industrialized economies. Of approximately $14 trillion in investible commercial real estate worldwide, 34% is located in the U.S. More than 87% is in 15 countries—a list that does not include India or any of the recently hot markets in developing Asia, Latin America or Eastern Europe.

Clearly, investments in these top markets continue to be seen as relatively safe and relatively profitable. But, according to a new report by the Urban Land Institute and Columbia University Business School, investors need to think carefully about the long-term demographic trends in these markets. Specifically, leading investment markets such as Japan, Germany and France will lose their appeal in coming decades as aging populations and declining birth rates lead to shrinking workforces and falling demand for office and retail properties. The only demand for new office space, the authors warn , will  come from replacement needs—demolition of old buildings, fires or physical obsolescence. “That results in very modest activity—akin to treading water,” they write.

In comparison, Australia, the U.S, Britain and Canada will remain relatively attractive. While they, too, face aging populations, they will continue to have positive population growth through 2050 and will continue to generate new jobs and demand for commercial real

The report advises: “For medium- to long-term investing, a focus on countries with growing populations and economies is far more promising. For institutional investors, the most comfortable locations will be the United States, Canada, Australia, and the United Kingdom—all places with large inventories of high-quality commercial real estate, transparent markets, readily   available debt, investor-friendly legal systems, title insurance, and large public real estate companies.”

Near-term, the authors add, there is considerable opportunity in Eastern Europe. Birth rates have already fallen below replacement levels, they note, but these economies are bustling to rebuild after a half-century of Soviet dominance. That will generate demand for all sorts of new facilities, including offices, factories and retail projects.

Copyright 2007, Penton Media.. All rights reserved. This article is protected by United States copyright and other intellectual property laws and may not be reproduced, rewritten, distributed, re-disseminated, transmitted, displayed, published or broadcast, directly or indirectly, in any medium without the prior written permission of Penton Media.