The professionally managed global real estate investment market showed significant growth in 2017 according to a new report.
The MSCI Real Estate Market Report shows estimates that the global market increased by 15% in 2017 compared to 2016; a total of U$8.5 trillion.
For Canada, the growth was 1.8% to a value of U$320 billion. The US remains the largest single market but saw its share of the 25-country index decrease from 42.1% to 40% in the IPD Global Annual Property Index.
“Although individual market size estimates have changed from year to year, weightings have proved relatively consistent for each of the 25 countries within MSCI’s IPD Global Annual Property Index since 2004,” said Jay McNamara, Head of Real Estate for MSCI. “These estimates are fundamental to the creation of MSCI’s multinational real estate indexes.”
Currency appreciation adds 5% to market size
The UK and Germany saw their market size gain by more than $100 billion, driven by currency appreciation; and currency movement was a big driver of market size, effectively increasing the global real estate investment market by approximately 5.3% in USD.
Capital value growth and new developments in the market, such as new construction and sale and leaseback transactions, also contributed to the growth in market size.
“While currency fluctuations have undoubtedly impacted relative weights of countries within the Index over time, capital value growth has also been a long-term feature driving the shape of the market today and many countries showed positive capital value growth in their local currency in 2017,” said McNamara.
