This year's survey shows that global real estate investors remain confident and their intentions are strongly expansionary. The appetite for cross-regional investment is increasing and more investors intend to deploy capital outside their own region this year.
Despite the strong liquidity in the investment market, investors are concerned about the intense competition for assets. Pricing is identified as the biggest obstacle to making acquisitions. There continue to be worries over economic weakness but there are encouraging signs of recovery in the U.S. and sustained growth in Asia.
Tighter yields in most markets are prompting investors in EMEA and North America to place a stronger emphasis on value add and opportunistic investments for higher returns. In contrast, investors in Asia Pacific intend to increase their focus on acquiring core assets in 2015. This trend is partly due to the increased participation of long-term low risk-tolerant institutional investors both from Asia and internationally.
The survey suggests that in the coming year investors are likely to rebalance their portfolios and switch from market sectors that are perceived to be overpriced. Second tier and smaller cities are gaining popularity but London remains the preferred city. Offices are the favoured asset class whilst retail is lagging. Alternative property sectors such as student living, healthcare and retirement homes are seeing stronger interest.
Overall, the mood among investors remains upbeat and buying demand will exceed selling pressure. CBRE believes 2015 will be another strong year for the global real estate investment market, with capital flows expected to increase by 10-15%.