U.S. Cities Dominate Foreign R.E. Investors Top Global Picks Turkey is an "Emerging Market" Contender

 
FOR IMMEDIATE RELEASE:  January 7, 2013

MEDIA CONTACT: Kathryn Hamilton, Kathryn@hamiltonink.com, 919.973.2685
SPOKESPERSON:James A. Fetgatter, Chief Executive, AFIRE, JAF@afire.org, 202.312.1400

U.S. Cities Dominate Foreign R.E. Investors’ Top Global Picks
Turkey is an “Emerging Market” Contender
 
 
Washington, D.C. – (January 7, 2013) For the first time since the question was first asked in 2001, four of the five cities selected by the members of the Association of Foreign Investors in Real Estate (AFIRE) as the top global cities for their investment dollars are in the U.S. The top five global cities are: New York, London, San Francisco, Washington, D.C., and Houston, according to the results of the 21st annual survey conducted among the members of the association and released today.  
 
The survey was conducted in the fourth quarter of 2012 among the association’s nearly 200 members. AFIRE member firms have an estimated $2 trillion or more in real estate assets under management globally. The survey was conducted by the James A. Graaskamp Center for Real Estate, Wisconsin School of Business.
 
"The strong endorsement of both San Francisco and Houston by our members in this year's survey directly reflects the propensity for real estate investment to follow jobs, in this case, technology and energy, which are thought to be among the top drivers of the next economic wave," said James A. Fetgatter, chief executive, AFIRE. "As other economic drivers emerge, it will not be surprising to see investors seek opportunities beyond the traditional New York and Washington, D.C. markets."
 
The biggest change internationally is the emergence of Turkey as one of the top four markets for capital appreciation and the third-ranking among the emerging countries selected for respondents’ investment dollars.
 
In this year’s survey a strong confidence in U.S. real estate emerged:
  • The U.S. is overwhelmingly first-ranked in providing opportunities for capital appreciation, receiving 55 percent of the vote. The second-ranked country, Brazil, received 17 percent of the vote.
     
  • Thirty-nine percent of survey respondents have a more optimistic perspective than they did a year ago regarding the U.S. real estate market. Most reported that their perspective has not changed from last year and the pessimistic view expressed by 33 percent of respondents in last year’s survey has all but disappeared.
     
  • Eighty-one percent plan to increase their portfolio size in the U.S. with 31 percent planning a "major net increase." None reported plans to decrease their U.S. portfolios.
 
  • Seventy-one percent of respondents also say they agree that improving fundamentals will make secondary markets in the U.S. more desirable in 2013.
 
  • With 55 percent of respondents’ votes, the U.S. is strongly regarded as providing the most stable and secure real estate investment opportunities. This approximates last year’s vote. It is in marked contrast to 2009 when only 43 percent of respondents selected the U.S. as the most stable and secure investment environment. This year, Canada, the second-ranked country, achieved 18 percent of these votes.
     
"The dominance of U.S. cities among investors’ “Top Global” choices, with four of the five being in the U.S., evidences the U.S. as the most transparent, professional, and liquid real estate market in the world,” said Christoph A. Kahl, Chairman, JAMESTOWN US-Immobilien GmbH and the newly elected chairman of AFIRE. “Particularly as compared to other countries, population growth in the U.S. will be a major driver for long-term capital appreciation and is one of the reasons why the institutional investment community worldwide favors the U.S. for its real estate allocations.”
 
Global Snapshot
Top Global Cities
  1. New York (#1 last year)
  2. London (#2 last year)
  3. San Francisco (#5 last year)
  4. Washington, D.C. (#3 last year)
  5. Houston (unranked last year)
 
Countries Providing the Most Stable and Secure Real Estate Investments
  1. U.S.A. (#1 last year)
  2. Canada (#2 last year)
  3. Germany (#3 last year)
  4. Australia (#4 last year)
  5. United Kingdom (#5 last year) tied with Sweden (unranked last year)
 
Countries Providing the Best Opportunity for Capital Appreciation
  1. U.S.A. (#1 last year)
  2. Brazil (#2 last year)
  3. United Kingdom (#4 last year, tied with Australia)
  4. Turkey (#9 last year)
 
Top Emerging Markets for Real Estate Investment
  1. Brazil (#1 last year)
  2. China (#2 last year)
  3. Turkey (#7 last year)
  4. India (#3 last year) and Mexico (#5 last year)

U.S. Snapshot
Top U.S. Cities
  1. New York (#1 last year)
  2. San Francisco (#3 last year)
  3. Washington, D.C. (#2 last year)
  4. Houston (#7 last year)
  5. Boston (#4 last year)
 
Preferred Property Types
  1. Multi-family (#1 last year)
  2. Industrial (#2 last year)
  3. Retail (#4 last year)
  4. Office (#3 last year)
  5. Hotel (#5 last year)
 
AFIRE members have a common interest in preserving and promoting investment in cross-border real estate. Founded in 1988, AFIRE currently has nearly 200 members representing 21 countries. AFIRE is located at 1300 Pennsylvania Avenue, NW, Washington, D.C.; (202) 312-1400. www.afire.org .
 



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