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Global business property markets is now approaching the pre-crisis peak levels

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Global business property markets is now approaching the pre-crisis peak levels, following the suspending of quantitative easing on the west and tightening the regulations on the east. Last year was extremely successful both in terms of traded volumes and achieved prices, and real estate agents expect a slight delay in 2018 as it is difficult to maintain such activity.
Managers of global property funds are also not afraid of a sudden turnaround in 2018 because of the good fortune of the economy in most parts of the world. However, they agree that there is no possibility of rising prices in some of the most popular cities in Asia, the US and Europe.
The global volume of transactions in the fourth quarter of 2017 reached 228 billion USD, representing an increase of 10% over the same period of the previous year. The whole year volumes rose by 6% to 698 billion USD.
While political uncertainty remains, the investors are confident in the real estate sector. The low interest rates and debt markets support the investment with constant cash flows in the sector. Since yields on bonds and interest rates are still low, the properties remain attractive to investors, especially for those who seek to break away from capital markets.
About 80% of the institutional investors are directing their money in alternative assets (other than shares and bonds), while 59% of them have included real estate in their portfolio.
In the US, the President Donald Trump’s fiscal reform supports investor confidence. The European markets are also performing well with the long-term appetite of investors for real estate, which has led to an increase in volumes of 22% in 2017.
In Asia, the control of Beijing’s regulators on some of the largest and most active acquisition companies in the country, including those focusing on real estate such as Dalian Wanda, does not slow market growth.
The fourth quarter of last year set a new record for volumes of transactions in the Asia-Pacific region. The interest of Asian investors in European property markets remains strong with several key deals last year, including Cheesegrater and Walkie-Talkie office buildings in London.
Similar is the situation in the United States where Asian investment activity is centered on so-called “trophy assets” as office buildings in Manhattan. BNP Paribas Real Estate reports that the deals made by Asia Pacific companies in Europe in 2017 are almost twice as high as in 2016 and reach a total value of 26.4 billion EUR.
However, the real estate agents say that high prices make some investors cautious. An increasing number of investors are wondering if the industry can maintain its strong performance in recent years in the future.