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Real Estate Funding
Cushman and Wakefield
higher risk real estate investment
The volume of global commercial property transactions climbed in 2011 to hit USD 727 billion (GBP 457 billion). According to Cushman & Wakefield, this represents a 14 per cent increase over 2010, while the number of sales completed is now 83 per cent higher than the market's lowest point in 2009. New York was the most popular target for commercial real estate investors, accounting for USD 28.2 billion over the course of last year, while London slipped into second place, followed by Tokyo. North America also proved to be the fastest-growing region when it came to commercial property investment, experiencing a 52 per cent jump in the amount of funds targeting the continent last year.Europe, the Middle East and Africa (EMEA) saw investment volumes rise by 17 per cent; in Latin America this increase was nine per cent, while the Asia-Pacific region only recorded a 0.5 per cent jump in commercial real estate funding. Cushman & Wakefield noticed a shift in investors' willingness to take risk over the course of 2011, with an increasing number of people shying away from exposure to the more volatile markets in the second half of last year. President and chief executive officer of the firm Glenn Rufrano commented: "The global investment market has been very polarised over the past year, with the best stock seeing demand and prices pressures, but second-tier property failing to gain traction with buyers and occupiers."He predicted this trend will continue into 2012, although he is optimistic investors will begin to look at higher-risk real estate investment strategies as the year progresses. Michael Rhydderch, head of EMEA capital markets at the firm, noted that many of European markets are considered to be volatile at present, which will drive investors towards core locations. As a result, London is likely to continue to benefit from funding for commercial property transactions this year. The recent DTZ Fair Value Index UK for the fourth quarter of last year rated the capital's commercial real estate sector as warm, citing rental growth prospects in the city as one of the main attractions for investors.
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