After taking over the top spot for global property investment in the third quarter, New York City widened its lead over competitors. The city attracted $35.7 billion in commercial property sales, including multi-family buildings, compared to $29.2 billion in London and $22.6 billion in Tokyo, according to a global property market report released today by Cushman & Wakefield.
Excluding multi-family sales, however, New York City’s lead shrunk to $1.1 billion, as it recorded $28.2 billion in sales compared to London’s $27.1 billion. The Americas as a whole led the world in the rate of office and residential rent increases, perhaps accounting for the city’s multi-family dominance.
Overall, global sales activity, including multi-family properties, rose 14 percent in 2011 to $808 billion, and the volume is now 83 percent greater than 2009’s lows. Half of all activity occured in Asia, but the North American market showed the greatest improvement in the last year, with investment volumes rising 52 percent. That increased demand led to the greatest compression of yields in the Americans, as capitalization rates fell in the region by 31 basis points, compared to the global average of 20 points. And overseas investors took notice, as the Americas saw a 94 percent increase in cross-border investment activity.
“The global investment market has been very polarized over the past year, with the best stock seeing demand and price pressures but second tier property failing to gain traction with buyers or occupiers,” said Cushman & Wakefield President Glen Rufrano. “That looks likely to continue this year but we do expect higher risk strategies to grow in popularity as the year goes by, helped by the promised flow of assets from financial institutions at last starting to pick-up.” — Adam Fusfeld