AMERICAS

 
 

Outlook for 2016

A Positive View on the Continuing Environment

Most investors across the Americas have a very positive view on the continuing environment for property investment. Seven years after the global financial crisis, countries across the Americas are now at different stages of the next cycle.

Canada, as well as several South American nations with deep exposure to the oil and commodities markets, are feeling the knock-on effects of challenges in those sectors. South America is seeking to come out of two years of languid investment, while the mood in Canada first turned negative in 2015, but aggressive construction in some markets has compounded the negative economic implications for the property markets.

Meanwhile, in the United States most investors see at least one to two more years of affirmative economic activity overall with positive property fundamentals and strengthening rents, declining vacancy and minimal speculative construction in most markets.

Investors of all stripes, from the biggest institutions to the regional grocery-anchored retail manager see avenues for opportunity, but also the need to remain cautious. Investors of the highest caliber are finding themselves in bidding wars for the best properties across property types; compressing yields to record levels in key gateway markets, so cautious investors must remind themselves not to overpay for yield. Opportunistic investors must be cautious too.

Seven years into the up cycle, we can sometimes forget that this is a cyclical industry and those with exposure to leasing risk believe they will find it easier to manage in 2016 than 2017.

SIX KEY THEMES

THAT WILL SHAPE COMMERCIAL REAL ESTATE IN THE AMERICAS IN 2016

Real estate continues to grow its appeal

2016 will see the global appetite for US real estate build momentum, with the US clearly identified as a primary destination for global cross-border capital.

63% expect rising investments

US investors have a positive view on the future environment for real estate investment. While it took until December for the U.S. Fed to confirm a rise in interest rates, this is largely built into current pricing and will not deter investors from using leverage in 2016.

Cost of debt not a deterrent

While the cost of debt in the US is likely to rise, this is largely built into current pricing and will not deter investors from using leverage in 2016.

One-fifth of investors expected not to be sellers

There is some evidence of caution in the US market, with one-fifth of US investors expecting to be net sellers in 2016 (vs. 0% in 2015).

Industrial and logistics the preferred sectors

Industrial and logistics will be the preferred sector for US-based investors, followed by CBD offices and shopping centers.

New York, San Francisco, and Los Angeles continue to shine

New York, San Francisco and Los Angeles are US and overseas investors’ top target cities in the region.

People are turning the spigot off more quickly than they ever used to and a lot of that is driven by better information being more readily available.

Global Logistics Developer

View the full Global Investor Outlook 2016 Report

Colliers International Global Researchers

Primary Authors

Mark Charlton
Head of UK Research and Forecasting
mark.charlton@colliers.com
+44 20 7487 1720

Bruno Berretta
Senior Research Analyst, EMEA
bruno.berretta@colliers.com
+44 20 7344 6938

Walter Boettcher
Director of UK Research and Forecasting
walter.boettcher@colliers.com
+44 20 7344 6581

Regional contacts

USA
Pete Culliney
Director of Research
pete.culliney@colliers.com
+1 212 716 3698

EMEA
Damian Harrington
Head of EMEA Research
damian.harrington@colliers.com
+358 9 856 77 600

Asia-Pacific
Andrew Haskins
Executive Director, Research & Advisory
andrew.haskins@colliers.com
+852 2822 0511