Global capital investment strong for 2015 | 22 December 2014
Global capital will continue to flow into real estate in 2015, according to a new report.
The recent Investment Strategy Annual (ISA) study by LaSalle Investment Management found the market will continue to grow strongly next year. However, it went on to warn investors about planning ahead, reports worldpropertyjournal.com.
The article advises that investors should be aware of the potential problems from getting caught late in the cycle and the importance of anticipating the next cyclical downturn in a few years.
Drawing attention to the fact that different regions of the world will grow at varying speeds, the report states that investors need to prepare their portfolios accordingly, adjusting for different interest rate growths.
LaSalle’s global head of research and strategy, Jacques Gordon, says: “Where we are in the real estate cycle is one of the most commonly asked questions of real estate investment managers and with good reason. Investors are concerned about what might happen if capital markets turn away from property.
“Timing strategies are difficult to apply to a relatively illiquid asset class like real estate. Nevertheless, adjusting portfolios as assets and markets move through their respective cycles can improve performance by enhancing returns and reducing risk.”
Further advice from the company includes diversifying holding across a number of countries in different stages of the cycle, and investing in secular trends rather than cyclical ones, notes advisor.ca.
Other themes for 2015 suggest that debt markets will continue embracing real estate, although with less aggressive lending than seen during a previous peak. It also expects to see an escalation in new developments in most major markets.
The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author