The document is a survey of global investor sentiment in 2011. Some key findings include: - Over 70% of investors planned to expand their real estate holdings in the next six months, up from 60% the prior year. However, lack of available "for sale" properties was seen as the main impediment. - Investors remained optimistic about market conditions, believing the real estate cycle was in the early upswing stage. However, views varied regionally, with Latin American investors most pessimistic. - Access to financing had improved in the US and Canada, contributing to greater risk appetite among investors in those markets. It had tightened in Asia but remained stable elsewhere. - Top concerns impacting

1. Global Investor Sentiment
2011 Survey
Colliers International Global Investor Sentiment Survey P. 1

2. www.colliers.com
Contents
>4 welcome from James w. horne > 16 australia & new zealand > 32 middle east
>5 a review of investor sentiment > 20 canada > 36 united states
>6 the global picture > 24 europe > 40 about the survey
> 12 asia > 28 latin america > 40 global research team
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3. Global Real Estate
Investment A Review of Investor Sentiment
october 2011
Global economic conditions have changed significantly since the In this year’s survey, investors globally remain upbeat, still seeing > Global investors have become more > There was little change seen in access to > Around half of all global investors are prepared > Different issues were seen to impact regions
last Global Survey of Investor Sentiment was undertaken in 2010. the market in the early stages of an upswing. In addition, far more aggressive in their expansion plans, with finance globally, though there was a significant to move out on the risk curve to achieve superior around the world. In the US, local economic
more than 71% of investors now indicating easing occurring in the US and Canada. The returns. Investors in the US and Canada were health was seen as the biggest issue, while
Consumer and business confidence is low in large parts of the investors compared to last year are looking at expanding their port- that they are likely to expand their portfolios cost of finance was also seen to have declined more risk-aggressive than other markets. political issues remain a concern in Canada.
world and sovereign debt issues remain a significant risk factor folios. Easing credit conditions in the US and Canada are seen as a over the next six months. This compares in those markets, but to have remained stable Government policy was of concern to European
in Europe and the US. Talk of a double-dip recession continues to positive, allowing for more confidence amongst investors in these the same time last year where just 60% in other regions. investors. Global economic health is impacting
> Most investors have expansion plans over the
indicated they planned to expand. upon investors’ confidence in Asia, Latin
occur. Whilst towards the end of 2010, most economic commen- markets. While investors in Europe are concerned about govern- next six months, with the level higher than last
America and Australia/New Zealand.
tary was becoming more confident, this is not the case now. ment policies, investors continue to remain relatively positive about year. The biggest impediment is the supply of
> Most investors believe that we are in the early “for sale” property.
the performance of property markets.
James w. horne Despite this, global capital real estate flows continue to grow, with stages of an upswing, with most believing that
approximately 9,250 properties changing hands worth US$350 billion The survey was conducted from the 1st August to the 14th August it will hold steady over the next 12 months.
eXecutive sponsor
Global Investment during the first half of 2011, an increase of 30% over the same period in 2011. This was an interesting time given the US debt rating downgrade
Services 2010. The real driver behind the result was positive growth within the on the 6th August, and the impact that this had on markets around
America’s region, with the United States experiencing an increase of the world. An analysis was undertaken between the results from both
124% in the value of commercial property transactions in 1H 2011. Other before and after the downgrade, and overall it had limited impact on
regions also saw investment growth, with the Europe and Middle East investors. It’s certainly a good sign for real estate globally.
regions increasing by 21% to US$87 billion, while the Asia Pacific saw
12% growth over the year.
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4. The Global Present
12
peak
Picture 13%
strategy > In Europe, Canada, US and Latin America, the current cycle
Around half of all global investors feel more that they invested in their own regions. The
supply of “for sale” property was the main
71% of the investors that we surveyed compelled to move out on the risk curve to regions from which investors showed the Globally, most investors believe that we are in the early stages of an
downsizing
issue; however the ability to raise equity was
upswing
globally indicated that they are most likely also seen as an issue. achieve superior returns. Canadian most interest in purchasing property over- upswing, with the largest group seeing the market at 8 o’clock. This
to expand their real estate holdings over seas were Canada and Asia. can be described as being a situation where demand is rising, avail-
9 3
the next six months, and 16% suggested > In Asia, economic uncertainty was seen as the ability and vacancy is falling, and headline rents are on the increase.
that they were somewhat likely to do so. greatest risk, above the supply of “for sale” “More than 71% of investors globally For each region, unique trends emerged: This is a similar place to where investors saw global markets in 2010.
Just 6% stated that it was unlikely that property. indicated that they are likely to expand
> In the Middle East, respondents showed a There are some regional differences. The highest number of respon-
they would do so. their portfolios over the next six strong preference for hotel and residential 37%
> In Australia, the ability to raise new equity was dents in Europe, Canada, Asia, Australia and the US are at 8 o’clock, in
months.” property over other asset classes.
Investors see a lack of supply of “for sale” seen as the biggest impediment to expansion. early upswing. In the Middle East, the highest number of respondents
property as being the main impediment to their > Office assets in London, Paris and Hamburg
were at 5 o’clock, so in late downturn. Investors in Latin America 10%
expansion plans, with almost 50% of inves- and US investors are more aggressive, with were the main acquisition targets for European were the most pessimistic, seeing the property cycle at the peak of
investors. German retail was also highlighted.
13%
tors stating that this was a concern. Access to 64% and 60% respectively indicating that the market and heading into early downturn.
risk
finance remains an issue with almost 22% of they were more risk-aggressive compared to
investors. Over a third of respondents target an internal six months ago. > In Canada, Toronto was the main target for
rate of return (IRR) of between 5% and 10%. acquisition, although investors did show
renewed interest in global markets compared
The main deterrents for expansion differ Over 40%, however, have a target IRR of over to last year. trough
across regions as follows: 15%. Investors in the Middle East and Asia buying property
had the highest target IRR, with more than 6
> In the Middle East, political risk was seen as Despite high levels of global capital flows, > Despite investing primarily in their own
equally restrictive of expansion plans as the 75% of investors in these markets targeting the majority of investors surveyed indicated regions, investors in Latin America showed a
supply of “for sale” property. an IRR of more than 15%. strong appetite for European assets.
Continued on page 8.
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5. 15.9%
are somewhat likely
Future
6.1% 12
How likely are you to 70.7% are unlikely
are most likely peak
expand your portfolio in
the next six months? 7.3%
are possibly
17%
> For Asian investors, Beijing and Shanghai cycle in 12 months
divest by European and Canadian investors. of access to credit over the past six months. a regional level, higher levels of investors
office assets remain the target for acquisition
Asian and Australia/New Zealand inves- There was however, minimal difference in Europe, the Middle East and Australia/ On average, the greatest number of respondents globally believes
downsizing
with Indian residential a close second.
upswing
tors are more likely to divest office property. between those respondents who believed New Zealand believe that there has been no that our markets will remain at 8 o’clock. The second greatest num-
it had improved, and those who saw it has change to the cost of debt. In Asia and Latin
9 20%
3
> In Australia/New Zealand, office assets in ber sees the market as being in late upturn, i.e. at 10 o’clock.
Sydney, Melbourne and Brisbane remain worsened. America, the cost has increased, while in
the preferred acquisition targets. Melbourne “Around a half of all global investors Regionally, the Middle East, Europe, Asia, Australia/New Zealand and
Canada and the US, the cost has declined.
office was seen as having better returns in feel more compelled to move out the US, all continue to see the market in early upswing, at 7 o’clock or 8
By region, the following trends emerged:
the short-term, with Sydney providing better The improvement in access to and cost of o’clock. Investors in Canada believe that the market will have moved to 27%
long-term potential. on the risk curve to achieve superior > A relatively high proportion of investors in credit for US and Canadian investors par- late upturn, while Latin America is still at the peak of its cycle.
returns.” Europe, the Middle East, Latin America and
tially explains the higher levels of risk that
Australia/New Zealand saw no change to
> In the US, the vast majority expressed a
access to credit. these investors are willing to take. 10%
desire to buy property domestically, with a
focus on California, Texas, New York/New In the US, US retail was listed (particularly Globally, half of all investors believe that
Jersey and Washington. From an overseas > The majority of US and Canadian investors
perspective, Canada, Australia and Brazil
Florida), while more robust markets such as loan-to-value ratios have remained constant
stated that access to credit had improved.
were also highlighted. New York office were also cited, suggesting over the past six months. On a regional level,
a degree of profit-taking may be emerging. > A very high proportion of Asian investors
this was also consistent for all areas, with
stated that access to credit had tightened. the exception of Asia, where investors saw
a decline, and in the US, where they saw an trough
selling property finance
More than 40% of respondents believe increase. 6
In terms of divestment, retail was frequently Globally, the largest group of respondents Continued on page 10.
highlighted as a category from which to believed that there was no change to ease that the cost of debt has increased, while
30% believed that there was no change. At
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6. australia &
new zealand
35%
middle east 40.2% 30.5%
How risk agressive is canada united states 50% no change
latin america 60%
How is the cost of debt increased
your region compared 64%
58% compared to January 2011?
to six months ago? 29.3%
decreased
europe asia
43% 22%
general sentiment rental growth will exceed the rate of infla- > In the Middle East, it is because there is limited decrease. Across regions, investors in Asia, > In Canada and the Middle East, local political outlook Europe and the US, however continued prob- remains an issue indicating that investors are
supply, high demand and growth potential. issues were seen as the main influence.
tion, while investors in Europe, the Middle Australia/New Zealand and Latin America lems in these markets remain of concern. still interested in acquiring property.
The majority of respondents globally (70%) Despite unsettled economic and political
East, Canada and Latin America believe believe that there will be increased demand.
believe that the pricing of commercial real > In Canada and Latin America, high demand > Government policies were seen to impact conditions around the world, investors in In the Middle East, most investors believe
that growth will not exceed that rate. Asian In comparison, investors in other regions
estate has increased too fast, too quickly. was seen as the major influence. investors in Europe. real estate remain upbeat about the market, “In the US and Canada, cheaper and that the market will be in early upswing
and US investors were evenly divided as to believe there will be recentralisation, with
On a regional level, only investors in the with most seeing it now in the stage of early within 12 months. Local political issues how-
whether rental growth would or would not lower levels of demand for suburban office easier access to debt was seen as
Middle East and Australia/New Zealand > In Asia, it was seen that better returns from ten upturn. Different factors are driving this ever remain a concern and are expected to
believed that this was not the case.
exceed inflation. years ago was the main factor influencing value. buildings. “At a global level, political issues and confidence, however. There are some com-
a positive and is leading to more
have some impact on real estate markets.
In terms of the value of real estate com- At a global level, political issues and prop-
property market conditions were also mon themes across regions. confident investors in this market.”
> In the US, limited supply was seen as the main highlighted as issues impacting target
pared to ten years ago, most respondents erty market conditions were also highlighted
“Globally, half of all investors influence. In the US and Canada, cheaper and easier
globally believe that it is more valuable markets over the next 12 months.” Government policies remain of greatest con-
believe that loan-to-value ratios access to debt was seen as a positive and
today. The main reason why is that there is cern to European investors, however despite
Obsolescence is seen as a major issue for “Obsolescence is seen as a major is leading to more confident investors in
have remained constant over the higher demand for assets, as well as better > Global economic health was a key issue economic issues in this market, investors
investors, with almost three quarters stating this market. Overall, investors in this mar-
past six months.” returns relative to other investments. issue for investors, with almost three in Asia, Latin America and Australia/New remain upbeat with most seeing the market
that it is of greater concern than it was ten Zealand. ket were more risk-aggressive than other
quarters stating that it is of greater in early upswing.
On the whole, this is a sentiment shared years ago. This was also consistent across regions, with this likely to be a result of the
Forecast rental growth was not expected concern than it was ten years ago.” freeing up of debt.
amongst all investors except in Europe and all regions. > Local economic health was a key issue in the US. In Latin America, investors were overall more
to exceed the rate of inflation over the Australia/New Zealand, where they believe pessimistic, with many investors believ-
In terms of demand for suburban office, In Asia, Latin America and Australia/New
next three to five years by 60% of global that this is not the case. The reason as to ing that they were at the peak of the market.
40% of global investors believe that there as issues impacting target markets over the Zealand, global economic health remains a
investors. On a regional level, inves- why it is more valuable on a regional basis is Nevertheless, supply of “for sale” property
will be an increase over the next ten next 12 months. By region, the following dif- concern. These markets have overall been
tors in Australia/New Zealand believe that as follows:
years; while a third believes there will be a ferences were outlined: less impacted by sovereign debt issues in
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7. regional author
regional author
Asia dennis yeo
managing director
Investment Services
brett Jensen
account manager
Osaka
Asia
hong kong
strategy Among the respondents, the largest group is those anticipating tar-
get IRR (Internal Rate of Return) in the range of 15–20%. Individual
“Asian investors largely prefer Looking ahead into the next six months, Asian investors remain keen
investors would anticipate over 25% IRR in the case of some emerg-
to expand their portfolios. In the survey, the largest group of Asian
China as the prime location investors (65%) expected to expand their property portfolios. This
ing markets.
for investment assuming figure was lower than the 73% registered in 3Q 2010. The next larg-
buying property
est group of respondents, at 23%, are somewhat likely to grow their
that real estate opportunities, portfolios during the same period. main targets
ranging from residential and However, 35% of the respondents said economic uncertainty is the key Regarding the potential targets for acquisitions, the most popular
office to logistics, arise for concern while 31% mentioned that the supply of property “for sale” is sectors are office, residential and industrial/logistics. In China, office
another key obstacle. A minority of 12% mentioned that the availability assets in the first-tier cities such as Beijing and Shanghai remain
development.” their favourites. In India, residential real estate is the popular sector
of debt financing is the key determinant. Since the availability of credit
for acquisitions. Both institutional investors and property companies
for real estate investment is getting tight, individual investors believe
that it is a good time to invest in real estate through debt. aim to acquire industrial/logistics assets in Singapore.
for development
risks Asian investors largely prefer China as the prime location for invest-
ment assuming that real estate opportunities, ranging from residen-
Asian investors are now more risk-averse than in the past six months. tial and office to logistics, arise for development. However, residential
A significant portion of Asian investor respondents (77%) expressed and office are the two more popular sectors. In addition, office devel-
their intention to stay put on their risk curves. The remainder are going opment opportunities in Tokyo, Sydney and Mumbai look interesting.
to take on more risks to achieve superior returns.
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8. 12 12
peak peak
11%
11% 15% 8%
are unlikely
15% 15% How likely are you to
On average, what stage of On average, where do you 65%
the occupational cycle do anticipate the occupational expand your portfolio in are most likely
downsizing
downsizing
upswing
upswing
9 18% 3 9 19% 15% 3
you believe your Asia to be cycle in Asia will be in 12 the next six months?
23%
in currently? 19% months? 19% are somewhat likely
11% 16%
15% 4%
11%
are possibly
trough trough
6 6
Last but not least, individual investors are Shanghai, Singapore, India and Australia. and residential assets in China and Hong Looking ahead, Asian investors are generally ratio decreased over the past six months. A property company based in Singapore owning older more obsolete commercial real markets in the next 12 months notwithstand-
targeting the logistics sector in Indonesia. However, investors would stick to the tra- Kong in the next 12 months. optimistic about the occupational cycle since There was an equal percentage (23%) said that the change is obvious since real estate is a bigger concern today than ten ing the general optimistic outlook on the
ditional spots (i.e. China, Hong Kong and they anticipate the cycle will forge ahead of people saying either no change or an estate capital values are now much higher years ago. On the supply side, older com- region. The major ones include the uncer-
for short-term A Hong Kong-based private investor said,
Singapore) in search of retail opportunities to 10:30 (i.e. the full upswing of the mar- increase. than before. Other fundamental reasons are mercial assets are challenged by competitive tain global economic growth, geo political
In addition to China residential, the office “The residential sector in Hong Kong is chal-
over the long-term. ket) in the next 12 months. However, 28% of rising demand from a young population and new developments equipped with modern upheaval, the threat attributed to sover-
sectors in India, Tokyo and the US are lenged by over-valuation in the short-term.” A private investor based in India mentioned
them expect the occupational cycle to pass rising demand amid the continued economic functional features. On the demand side, eign debt default, changes in local govern-
thought to be the interesting area for invest- Meanwhile, a real estate fund based in that the tightening supply of credit and rising
its peak and consolidate during the forecast growth on a long-term basis. An institutional the needs of commercial space users have ment and the growing inflationary pressure.
ment over the short-term. Retail in Hong selling property Singapore with asset exposure in Singapore, cost of debt will be the key issues affecting
period. An institutional investor based in investor based in Singapore said real estate changed, thus rendering older developments A property company based in Singapore
Kong is highlighted as one of the favourites. Hong Kong and China expressed its desire its target markets in the next 12 months.
There were a range of targets, including India said global uncertainty is going to ham- always appreciates over the long-term and functionally obsolete. mentioned that the key challenge is shorter
In the logistics sector, Sydney, Singapore to dispose of offices in the core locations of
China residential, Hong Kong residential, per short-term growth of real estate. this is particularly true for Asia. but more volatile real estate cycles in Asia.
and Vancouver are the popular spots. Hong Kong due to compressed yields and Meanwhile, the vast majority of respondents
Singapore office and India office, which are general sentiment In general, Asian investors remain keen in
limited upside for rental growth. However, it Regarding rents, the responses were rela- (77%) anticipate suburban office real estate
for long-term identified by Asian investors for disposi- finance China but policy risks and the liquidity of
would not undermine their interests in qual- In terms of general market sentiment, the tively mixed, although 56% of Asian inves- will see an increase in demand in ten years’
Over the long-term, investment targets tion over the next 12 months. The reasons Renminbi remain their key concerns.
ity office assets in decentralised areas. Over the past six months, the majority of vast majority of respondents (73%) agree tors said rents will exceed the rate of time. This will particularly be the case when
fall in a much wider range. Residential in for disposition are a combination of over- Asian investors (69%) felt a tightening of that the pricing of commercial real estate inflation over the next three to five years. some of the older buildings situated in urban On a positive note, Asian investors believe that
Delhi is a long-term play but investors also valuation, timing of market cycles and the lenders’ credit underwriting standards. has increased too far, too quickly. In addi- An institutional investor based in Singapore downtown locations become obsolete. real estate will continue to be a good hedge
favour residential opportunities in New forthcoming expiry of holding periods. In market sentiment Meanwhile, there was an even higher per- tion, the same percentage of respondents indicated that it is going to be true for against inflation. Given the recent surge in
York, Vancouver and Los Angeles. Similarly relative terms, there is a higher portion
In general, the respondents believe the current centage of respondents (77%) experiencing (73%) reckons that commercial real estate Singapore and Japan but not for China. commodity prices, price inflation of construc-
in the case of offices, New York has been of respondents looking to dispose of their market outlook
occupational real estate cycle in Asia is about an increase in the cost of debt during the is a more “precious” asset today versus ten tion materials such as steel and cement have
highlighted in addition to the typical invest- office assets in Hong Kong and Singapore, From an investment management point
8:15. In other words, demand is on the rise and period. In addition, 54% of the respondents years ago. Looking forward, there are a number of key actually helped push up real estate prices.
ment locations in Asia – Hong Kong, of view, 65% of respondents indicate that
the market is close to seeing a full upswing. indicated that the maximum loan-to-value uncertainties that will affect investors’ target
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9. Australia &
“The majority of investors now see overseas
markets as too risky at present, given
economic conditions in many major markets.”
New Zealand sydney
strategy buying property
Just over 60% of respondents indicated that they were likely to main targets
expand their real estate holdings over the next six months, with just Overwhelmingly, respondents are looking to their domestic markets
regional author
fewer than 18% stating it was unlikely. This level is higher than last over the next 12 months. The majority of investors now see over-
year, when 46% of investors were looking to expand. The main fac- seas markets as too risky at present, given economic conditions in
tors preventing growth of portfolios was the ability to raise new many major markets. One investor stated “We limit our investments
equity, and the supply of “for sale” property. to domestic Australian holdings, for reasons of social and political
stability and the mining boom” while another investor stated that “We
risk are not prepared to invest overseas as it is too uncertain.”
John marasco
managing director Around two thirds of respondents suggested that they were targeting Given the strong performance in office markets around Australia over
Investment Services returns in the region of 5% to 15%, a relatively low target IRR com- the past 12 months, it is not surprising that the top three acquisition
Australia targets were Sydney, Melbourne and Brisbane office assets. In terms
pared to other regions.
of geographical location, Sydney property in general was the most
Correspondingly, Australia/New Zealand investors were far less risk
popular target location.
aggressive than other regions, with 65% outlining that they are less
compelled to move out on the risk curve to achieve superior returns
compared to six months’ previously.
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10. 12 12
peak peak
17.9%
are somewhat
On average, what stage likely
On average, where do you 43.8%
of the occupational cycle How likely are you to
anticipate the occupational cycle are most likely
downsizing
downsizing
upswing
upswing
do you believe Australia 9 3 9 14% 3
in Australia and New Zealand expand your portfolio in 17.9%
and New Zealand to be are unlikely
33% will be in 12 months? 41%
the next six months?
in currently? 20.5%
13% 16% are possibly
31%
13%
trough trough
6 6
for development vacancy rates peaked more than 18 months selling property than 50% believe that the market is still in In terms of cost of debt, half believe that precious asset compared to 10 years ago. believe that demand will increase for sub- The local political landscape was also high-
For development potential, office assets are ago, and rental growth has been strong the early stages of an upswing; however, a there has been no change in the cost of in the region is not a more precious asset. urban office space over the next ten years. lighted by some investors in Australia with
Although office assets were seen as the
also the most frequently targeted category since that time. greater proportion take the view that rents debt over the past six months. A further This is quite a different result to most one commenting “The Australian politi-
top acquisition targets, they also came
with Sydney being seen as having the most will have passed their lowest point and 30% believe that cost of debt has increased, regions around the world, with only Asian cal landscape is seriously affecting the
for long-term out as being the top category for disposal. “Respondents also noted
potential, closely followed by Melbourne. begun rising. while 20% believe that it has decreased. investors expecting a similar trend.
Sydney office is seen as a better long-term Melbourne office assets were slightly more
Both these markets will have limited new Half believe that the maximum loan-to-value overwhelmingly (77%) that owning
hold, which is consistent with Sydney’s likely to be listed as assets to dispose of, “When considering future demand
supply entering the market and are therefore although the difference was minimal. It is ratios have also remained unchanged over obsolete property was a greater
office market location in the rental cycle. The “Although office assets were seen as outlook for suburban office space, 50% of
likely to see strong rental growth. this time period, with 30% taking the view concern than ten years previously.”
vacancy rate in this market has now peaked likely that the popularity of Australian office
the top acquisition targets, they also that they reduced over the period. The majority of respondents in the region respondents believe that demand will
and rental growth is expected to be strong assets at present is encouraging many to
see this as an ideal time to take buildings
came out as being the top category (59%) believe that rental growth will exceed increase for suburban office space
“For development potential, office over the next two years, with minimal new
for disposal.” general sentiment Of those that saw it as being more valuable the rate of inflation over the next three to over the next ten years.”
supply entering the market. to market. The third most popular category
assets are also the most frequently (32% of the total), the main reasons cited five years, further showing confidence in the
listed was Melbourne Industrial. In terms of pricing, a third of all Australia/
targeted category with Sydney being The US office market was a surprise entry finance was limited supply. It was seen as a secure market. Global economic health however, is
New Zealand investors believe that given
seen as having the most potential…” considering that Australian-based assets investment and there was high demand. seen as the main issue impacting the market economic situation. Both need to stabilize
market sentiment In comparison to six months ago, around market fundamentals, pricing has advanced
tend to dominate the list. It does, however, half of all respondents have taken the view (55% of all respondents). Many cite con- before further investment is considered” and
too far. Whilst two-thirds believe that prices Respondents also noted overwhelmingly
show the strong potential some investors Investors continue to be upbeat about the state cerns about problems in the US and Europe another saying that “lack of political cer-
for short-term that conditions in the lending market have are either at the right level or have some (77%) that owning obsolete property was a
see this market to have. of the market with most respondents (77%) flowing through to markets in Australia/New tainty is a problem.”
In the short-term, Melbourne office was not changed. Around 30% believe that there further potential for growth. greater concern than ten years previously.
still seeing the market in early upswing. has been a tightening of standards, while Zealand. Access to finance is also seen as
seen as having the most solid returns, con-
A notable majority of investors don’t believe When considering future demand for sub- an issue (17%).
sistent with Melbourne’s office market loca- Looking forward 12 months, investors the remaining 20% believe there has been a
that real estate in that region is a more urban office space, 50% of respondents
tion in the rental cycle. Melbourne’s office remain optimistic about the outlook. More loosening of standards.
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11. Canada
“A shortage of properties for sale has no
doubt pushed investors to move outside core
Canadian cities, into more tertiary markets.”
vancouver
strategy Looking at target IRR, 65% of Canadian respondents stated that
they were seeking returns in the region of 5% to 10%, reflecting
Looking ahead to the next six months, 86% of Canadian inves-
the core-to-core plus strategies that we have seen in the Canadian
tors expected to expand their real estate portfolios. This figure was
regional author
landscape. Investors aiming for returns in the 10% to 15% range
up sharply from a year ago, when 61% of respondents indicated
were 25% of the Canadian sample, while investors hoping to get
they would be expanding their respective portfolios. The balance of
returns between 15% and 20% came in at 5%, as did those seeking
Canadian investors expressed reasonable appetites to grow their
returns of above 20%.
real estate portfolios, answering that they were somewhat likely to
expand.
milton lamb risk
The number one factor in determining whether investors would be
senior vice president able to grow their portfolios was the supply of “for sale” property, In sharp contrast to last year, most Canadian investors appear to
Investment Services with 64% listing this as their primary concern. The next two con- be willing to take on more risk. This years’ survey shows 64% of
Canada cerns, held by 18% of investors, was whether they would be able to investors have moved out on the risk curve relative to six months
raise new equity and economic uncertainty. No Canadian respon- ago. This is almost certainly the result of improving fundamentals
dents listed access to debt. and a degree of confidence that the economy will continue to expand.
A shortage of properties for sale has no doubt pushed investors to
move outside core Canadian cities, into more tertiary markets.
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