EDR, profile picture
Uploaded byEDR
170 views

A Look at Brexit - Mellott

The document discusses the state of commercial real estate markets globally and in various regions. It notes that demand in London began tapering off in 2016 and availability is at a 10-year average. Investment volumes in London were down 19% in 2016. The outlook predicts more stable investment activity globally in 2017 compared to 2016, with London, Berlin, and Sydney among the top target cities. Geopolitical events have impacts but economic cycles are more important long-term drivers of real estate markets.

Embed presentation

Download to read offline
CRE IN A COMPLEX WORLD MAY 2, 2017
• State of the Market • What’s influencing markets? • Some perspective: What really matters? • What’s next? CRE Outlook CBRE CRE IN A COMPLEX WORLD2 CRE IN A COMPLEX WORLD WHAT’S THE PLAN?
LONDON STATE OF THE MARKET
• 2.5 million sq. ft. of take-up in Central London • Prime rents unchanged in the city, but down 2% in West End • 14.7 million sq. ft. of availability • 6.6 million sq. ft. of completed construction expected • Less than 3 million sq. ft. (new) expected in 2018 CBRE CRE IN A COMPLEX WORLD4 CRE IN A COMPLEX WORLD STATE OF THE MARKET - LONDON Source: CBRE Research
• Demand began to taper off in 2016 (Q1 2017 19% below 10 year average) • Availability at 10-year average (14.7 million sq. ft.) • Office rents outside of London doing better CBRE CRE IN A COMPLEX WORLD5 CRE IN A COMPLEX WORLD STATE OF THE MARKET - LONDON Source: CBRE Research
• The value of real estate transactions in 2016 was down 25% YoY (most since GFC) • Central London investment down only 19% • Not all attributed to referendum • Volumes are down across the board CBRE CRE IN A COMPLEX WORLD6 CRE IN A COMPLEX WORLD STATE OF THE MARKET - LONDON Source: CBRE Research
Figure 2: Capital flows into global real estate (US$ billions) Source: CBRE Research, Real Capital Analytics, 2016. 368 586 85 189 191 64 113 78 44 156 171 70 73 284 180 172 329 83 233 396 108 303 458 113 316 566 105 107 501 288 EMEAUS$bn Americas APAC 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1,200 1,000 800 600 400 200 0 CAPITAL FLOWS INTO GLOBAL REAL ESTATE (US$ BILLIONS) CBRE CRE IN A COMPLEX WORLD7 Source: CBRE Research, Real Capital Analytics 2016.
EUROPE STATE OF THE MARKET
Figure 3: 2016 prime capital value growth (annual change) Source: CBRE Research, NCREIF, 2016. 4.0% 5.4% 8.6% 8.7% 10.3% 6.6% 4.9% 2.7% 5.1% Office Retail Industrial AMERICAS EMEA ASIA PACIFIC 2016 PRIME CAPITAL VALUE GROWTH (ANNUAL CHANGE) CBRE CRE IN A COMPLEX WORLD9 Source: CBRE Research, NCREIF, 2016.
Figure 4: 2016 prime property rent growth (annual change) Source: CBRE Research, 2016. 0.2% 2.3% 1.9% -1.9% 6.6% 4.7% 1.8% 0.0% 0.9% Office Retail Industrial AMERICAS EMEA ASIA PACIFIC 2016 PRIME PROPERTY RENT GROWTH (ANNUAL CHANGE) CBRE CRE IN A COMPLEX WORLD10 Source: CBRE Research, 2016.
6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 OFFICE MARKET* VACANCY RATES (%) CBRE CRE IN A COMPLEX WORLD11 *All major markets where vacancy data are available except Moscow Source: CBRE Research
WHAT’S INFLUENCING MARKETS?
In the UK In the rest of Europe Very Significant Significant Neutral Insignificant Very Insignificant 40% 35% 30% 25% 20% 15% 10% 5% 0% BREXIT BIG DEAL OR RED HERRING? CBRE CRE IN A COMPLEX WORLD13 Source: CBRE European Occupier Survey 2017.
Access to sufficiently large/skilled labor pool Exchange rate fluctuations General policy uncertainty Ability to operate in European markets Possible changes to trading arrangements / tariff introductions Other 32% 28% 27% 8% 2% 3% BREXIT WHAT’S THE CONCERN? CBRE CRE IN A COMPLEX WORLD14 Source: CBRE European Occupier Survey 2017.
MARCH 29: Article 50 issued APRIL 29: EU Summit signs off negotiating guidelines to Commission MAY 7: French elections JUNE Substantive ‘divorce’ negotiations on money, EU citizens and N Ireland JULY, AUGUST (Go on holiday) SEPTEMBER German elections ARTICLE 50 WHAT HAPPENS NEXT? CBRE CRE IN A COMPLEX WORLD15
GREATEST CHALLENGES FOR ORGANIZATIONS FUTURE OPERATIONS EMEA OCCUPIER SURVEY KEY FINDINGS CBRE CRE IN A COMPLEX WORLD16 Source: CBRE Research, 2017; EMEA Occupier Survey Report 2017.
- 100 200 300 400 500 600 700 800 900 UK Germany France Sweden Netherlands Spain Italy Norway Finland Denmark Belgium Poland Russia Austria Ireland EUROPEAN CRE INVESTMENT 2003-2016 CBRE CRE IN A COMPLEX WORLD17 Source: CBRE Research 2016.
0% 10% 20% 30% 40% 50% 60% 70% 80% Czech Republic Russia Norway Sweden Poland Ireland Italy Netherlands Spain France Germany UK London 0% 10% 20% 30% 40% 50% 60% 70% 80% Czech Republic Switzerland Portugal Russia Denmark Netherlands Italy Belgium Spain France Germany UK Total investment from North America, % of total KEY DESTINATIONS IN EUROPE TOP COUNTRIES 2013-2016 CBRE CRE IN A COMPLEX WORLD18 Source: CBRE Research 2016. London Total investment from Asia, % of total
WHAT REALLY MATTERS? SOME PERSPECTIVE
• London most connected city* • Hosts 40% of European HQ for world’s top companies** CBRE CRE IN A COMPLEX WORLD20 CRE IN A COMPLEX WORLD SOME PERSPECTIVE *Source: Global and World Cities Network **Source: Deloitte
• 65,000 people EU-facing financial services • 3% of UK office stock (6 million sq. ft.) • About the level of space leased in Central London every 6 months CBRE CRE IN A COMPLEX WORLD21 CRE IN A COMPLEX WORLD SOME PERSPECTIVE Source: CBRE Research
• Top 10 global investment banks 52,000 in London • Could see 27% of those jobs moved • Equal to 5 weeks of leasing in London CBRE CRE IN A COMPLEX WORLD22 CRE IN A COMPLEX WORLD SOME PERSPECTIVE Source: CBRE Research
• In 2006 financial services accounted for 41% of Central London leasing (sq. ft.) • In 2016 only 23% • London has diversified • Tech and media (immigration key) CBRE CRE IN A COMPLEX WORLD23 CRE IN A COMPLEX WORLD SOME PERSPECTIVE Source: CBRE Research
• London boasts a lot of advantages • Housing, schools, infrastructure and culture • Legal and regulatory environment • Alternatives aren’t clear • Impacts will be over the long term CBRE CRE IN A COMPLEX WORLD24 CRE IN A COMPLEX WORLD SOME PERSPECTIVE
CBRE CRE IN A COMPLEX WORLD25 CRE IN A COMPLEX WORLD SOME PERSPECTIVE TRANSPARENCY FX ADVANTAGE SIZELIQUIDITY
-6% -4% -2% 0% 2% 4% 6% Y-o-Y % Change Recession Nonfarm Emp. 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2017 2016 REAGAN SHOT FALKLANDS WAR US EMBASSY IN BEIRUT BOMBED CHERNOBYL DISASTER GLASTNOST IN USSR BERLIN WALL FALLS US INVADES KUWAIT GULF WAR STARTS FALL OF THE SOVIET UNION EUROPEAN UNION BEGINS BOSNIAN WAR ENDS EUROZONE CREATED 9/11 US INVASION OF IRAQ RUSSO-GEORGIAN WAR OBAMA ELECTED SYRIAN WAR JAPANESE TSUNAMI ISIS EMERGES CRIMEA ANNEXED PARIS ATTACKS BREXIT VOTE NAFTA SIGNED HURRICANE KATRINA BUSH I ELECTED CLINTON ELECTED BUSH II ELECTED TRUMP ELECTED PERSONAL COMPUTER INTRODUCED CRE IN A COMPLEX WORLD GEOPOLITICS MATTER BUT NOT LIKE YOU THINK CBRE CRE IN A COMPLEX WORLD26 Source: CBRE Research; U.S. BLS, Q4 2016.
UNEMPLOYMENT THE CYCLE MATTERS CBRE CRE IN A COMPLEX WORLD27 Source: CBRE Research, Macrobond, IMF, WEO. G7 UNEMPLOYMENT RATE (%) 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
OUTLOOK EMPLOYMENT AND INTEREST RATES CBRE CRE IN A COMPLEX WORLD28 Source: CBRE Research, Macrobond.
CRE OUTLOOK WHAT’S NEXT?
Figure 7: Purchasing activity relative to 2016, global and regional Source: CBRE 2017 Global Investor Intentions Survey. Global EMEA Americas Asia Pacific More than 20% lower Between 10% - 20% lower Between 10% - 20% higher More than 20% higher Up to 10% lower About the same Up to 10% higher % 50 45 40 35 30 25 20 15 10 5 0 PURCHASING ACTIVITY RELATIVE TO 2016 GLOBAL AND REGIONAL CBRE CRE IN A COMPLEX WORLD30 Source: CBRE 2017 Global Investor Intentions Survey.
on ORTH C #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW EMEA ASIA PACIFIC TOP TARGET CITIES BY REGION CBRE CRE IN A COMPLEX WORLD31 Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE ASIA PACIFIC Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC n RTH #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS EMEA ASIA PACIFIC Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDN #2 TOK #3 SHAN #4 MELB #5 BRISB #6 HON #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PAC Source: CBRE 2017 Global Investor Intentions Survey. #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #2 TOKYO #3 SHANG #4 MELBO #5 BRISBA #6 HONG #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW Source: CBRE 2017 Global Investor Intentions Survey. #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #3 MADR #4 AMST #5 PARIS #6 WARS Source: CBRE 2017 Global Investor Intentions Survey. #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW Source: CBRE 2017 Global Investor Intentions Survey. AMERICAS EMEA ASIA PACIFIC
Source: CBRE 2017 Global Investor Intentions Survey. 79% DIRECT 26% DEVELOPMENT FUNDING 8% CORPORATE AQUISITIONS 7% OTHER EQUITY 7% OTHER DEBTS 49% PARTNERSHIP / JOINT VENTURE / PARTIAL INTERESTS 22% LISTED REAL ESTATE (INCLUDING LISTED REITS) PREFERED INVESTOR VEHICLES 2016 VERSUS 2017 CBRE CRE IN A COMPLEX WORLD32 Source: CBRE 2017 Global Investor Intentions Survey. Figure 15: Preferred investor vehicles Source: CBRE 2017 Global Investor Intentions Survey. 79% DIRECT 26% PROPERTY FUND 26% DEVELOPMENT FUNDING 16% PRIVATE DEBT 8% CORPORATE AQUISITIONS 7% OTHER EQUITY 7% OTHER DEBTS 5% CMBS 49% PARTNERSHIP / JOINT VENTURE / PARTIAL INTERESTS 22% LISTED REAL ESTATE (INCLUDING LISTED REITS) Figure 15: Preferred investor vehicles 79% DIRECT 26% PROPERTY FUND 26% DEVELOPMENT FUNDING 16% PRIVATE DEBT 8% CORPORATE AQUISITIONS 7% OTHER EQUITY 7% OTHER DEBTS 5% CMBS 49% PARTNERSHIP / JOINT VENTURE / PARTIAL INTERESTS 22% LISTED REAL ESTATE (INCLUDING LISTED REITS) 26% PROPERTY FUND 16% PRIVATE DEBT 7% OTHER DEBTS 5% CMBS Figure 15: Preferred investor vehicles Source: CBRE 2017 Global Investor Intentions Survey. 79% DIRECT 26% PROPERTY FUND 26% DEVELOPMENT FUNDING 16% PRIVATE DEBT 8% CORPORATE AQUISITIONS 7% OTHER EQUITY 7% OTHER DEBTS 5% CMBS 49% PARTNERSHIP / JOINT VENTURE / PARTIAL INTERESTS 22% LISTED REAL ESTATE (INCLUDING LISTED REITS) Figure 15: Preferred investor vehicles Source: CBRE 2017 Global Investor Intentions Survey. 79% DIRECT 26% PROPERTY FUND 26% DEVELOPMENT FUNDING 16% PRIVATE DEBT 8% CORPORATE AQUISITIONS 7% OTHER EQUITY 7% OTHER DEBTS 5% CMBS 49% PARTNERSHIP / JOINT VENTURE / PARTIAL INTERESTS 22% LISTED REAL ESTATE (INCLUDING LISTED REITS) Figure 15: Preferred investor vehicles Source: CBRE 2017 Global Investor Intentions Survey. 79% DIRECT 26% PROPERTY FUND 26% DEVELOPMENT FUNDING 16% PRIVATE DEBT 8% CORPORATE AQUISITIONS 7% OTHER EQUITY 7% OTHER DEBTS 5% CMBS 49% PARTNERSHIP / JOINT VENTURE / PARTIAL INTERESTS 22% LISTED REAL ESTATE (INCLUDING LISTED REITS) Source: CBRE 2017 Global Investor Intentions Survey. 79% DIRECT 26% DEVELOPMENT FUNDING 8% CORPORATE AQUISITIONS 7% OTHER EQUITY 7% OTHER DEBTS 49% PARTNERSHIP / JOINT VENTURE / PARTIAL INTERESTS 22% LISTED REAL ESTATE (INCLUDING LISTED REITS)
Source: CBRE 2017 Global Investor Intentions Survey. Figure 16: Investors main motivation for investing in real estate 2017 Yield relative to other asset classes Higher income return than other assets classes Expectation of better capital value growth than asset classes Other Hedge against inflation Asset class diversification Steady income stream from rents % 0 5 10 15 20 25 30 35 30 20 15 Geographic diversification 7 2 0 0 20 Yield relative to cost of debt (positive leverage advantage) 6 INVESTOR MOTIVATION WHY INVEST IN REAL ESTATE? CBRE CRE IN A COMPLEX WORLD33 Source: CBRE 2017 Global Investor Intentions Survey.
Source: CBRE 2017 Global Investor Intentions Survey. Figure 17: Investor main obstacles to purchase 2017 Asset pricing Availability of assets Competition from other investors Low market transparency Other Currency risk Tax Deflation % 0 6010 3020 40 50 48 25 16 3 2 2 1 1 1 0 Availability and/ or cost of debt Lack of investment partners INVESTOR CHALLENGES MAIN OBSTACLES TO PURCHASE CBRE CRE IN A COMPLEX WORLD34 Source: CBRE 2017 Global Investor Intentions Survey.
Figure 18: Investor main concerns 2017 A global economic shock undermining occupier demand Faster than expected, a bubble waiting to burst Overbuilding leading to excess supply Property is overpriced, a bubble waiting to burst A local economic shock undermiming occupier demand Local politcal instability Some other property market related shock Higher than expected owners Other Distressed sales by existing owners Deflation % 0 5 10 15 20 25 Global political instability (conflict and or terrorism) A change of government policy that makes property less attractive 22 6 2 1 1 1 6 4 21 10 10 15 0 Source: CBRE 2017 Global Investor Intentions Survey. INVESTOR CHALLENGES MAIN CONCERNS CBRE CRE IN A COMPLEX WORLD35 Source: CBRE 2017 Global Investor Intentions Survey.
CONCLUSION
• Europe currently well-positioned cyclically • Late cycle • Some room to run • Politics increasingly important, but not how you think • Watch interest rates and FX CBRE CRE IN A COMPLEX WORLD37 CONCLUSION
THE WORLD AT AN INFLECTION POINT CBRE CRE IN A COMPLEX WORLD38
THANK YOU DARIN MELLOTT Director, Research and Analysis CBRE

More Related Content

PDF
Avirama Golan - Global City: A Proposal for a New Definition
byCitiesTelAviv
 
PPTX
Stanlib Offshore property presentation
bySenate Group Financial Advisors
 
PDF
Asia Pacific Real Estate Market Outlook 2019
byĐoàn Trọng Hiếu
 
PPTX
Global perspective of real estate sector
byGanta Anil Kumar Reddy
 
PPTX
Property Markets in an Unnatural World | Colliers Global Real Estate Conferen...
byColliers Singapore
 
PPTX
Winning in growth cities 2018 2019 preview
byCushman & Wakefield
 
PDF
Q4 2016 industrial brief
byJustin B. Smith
 
PPTX
Gb540.unit6.final project
byTry L. Muller, CPM, CUA
 
Avirama Golan - Global City: A Proposal for a New Definition
byCitiesTelAviv
 
Stanlib Offshore property presentation
bySenate Group Financial Advisors
 
Asia Pacific Real Estate Market Outlook 2019
byĐoàn Trọng Hiếu
 
Global perspective of real estate sector
byGanta Anil Kumar Reddy
 
Property Markets in an Unnatural World | Colliers Global Real Estate Conferen...
byColliers Singapore
 
Winning in growth cities 2018 2019 preview
byCushman & Wakefield
 
Q4 2016 industrial brief
byJustin B. Smith
 
Gb540.unit6.final project
byTry L. Muller, CPM, CUA
 

Similar to A Look at Brexit - Mellott

PDF
Foreign Investment Capital - U.S. Outlook 2016, Oct. 15, 2016
byTony D'Silva Kamath, MAI, MRICS
 
PDF
Global investor intentions survey 2016
byCBRE_Spain
 
PDF
Global vision q4 2012 final
byWorld Office Forum
 
PPT
Real Estate and Economy Forecast 2014
byMike Stanko
 
PDF
Global Cities The 2016 Report
byAlfredo Musitani
 
PDF
NGKF US Capital Markets Report 4Q-2016
bySteve Kapp, SIOR
 
PDF
C&W CRE International Investment Atlas 2015
byThorsten Lederer 托尔斯滕
 
PPTX
Commercial Real Estate Industry Analysis
byChristopher Chen
 
PPTX
Global Investment Atlas 2018
byCushman & Wakefield
 
PDF
Stanlib Global Property by Keillen Ndlovu
bySTANLIB
 
PPTX
2Q16 NGKF US Capital Markets Report
byTodd Hershman
 
PPTX
Gb540.unit6.final project
byTry L. Muller, CPM, CUA
 
PDF
JLL Global Market Perspective - November 2018
byHarrison West
 
PDF
2015 Q1 U.S. Capital Flows Report
byCoy Davidson
 
PDF
Encouragin Signs for 2014
byMiqui Mel
 
PDF
2016 Emerging Trends in Real Estate - Canadian Version
byglobadigm
 
PDF
Cee investment report by skanska
byFRACTALGROUP
 
PDF
Cushman & Wakefield Atlas outlook 2016
byGuy Masse
 
PDF
Atlas outlook 2016- Cushman & Wakefied
byGuy Masse
 
PDF
Cushman & Wakefield 2016 Capital Markets Outlook
byMatthew Marshall
 
Foreign Investment Capital - U.S. Outlook 2016, Oct. 15, 2016
byTony D'Silva Kamath, MAI, MRICS
 
Global investor intentions survey 2016
byCBRE_Spain
 
Global vision q4 2012 final
byWorld Office Forum
 
Real Estate and Economy Forecast 2014
byMike Stanko
 
Global Cities The 2016 Report
byAlfredo Musitani
 
NGKF US Capital Markets Report 4Q-2016
bySteve Kapp, SIOR
 
C&W CRE International Investment Atlas 2015
byThorsten Lederer 托尔斯滕
 
Commercial Real Estate Industry Analysis
byChristopher Chen
 
Global Investment Atlas 2018
byCushman & Wakefield
 
Stanlib Global Property by Keillen Ndlovu
bySTANLIB
 
2Q16 NGKF US Capital Markets Report
byTodd Hershman
 
Gb540.unit6.final project
byTry L. Muller, CPM, CUA
 
JLL Global Market Perspective - November 2018
byHarrison West
 
2015 Q1 U.S. Capital Flows Report
byCoy Davidson
 
Encouragin Signs for 2014
byMiqui Mel
 
2016 Emerging Trends in Real Estate - Canadian Version
byglobadigm
 
Cee investment report by skanska
byFRACTALGROUP
 
Cushman & Wakefield Atlas outlook 2016
byGuy Masse
 
Atlas outlook 2016- Cushman & Wakefied
byGuy Masse
 
Cushman & Wakefield 2016 Capital Markets Outlook
byMatthew Marshall
 

More from EDR

PDF
Measure twice shields
byEDR
 
PDF
Brownfields under trump panel
byEDR
 
PDF
How technology is changing opp danielson
byEDR
 
PDF
Measure twice van buren
byEDR
 
PDF
Covering your bases parson
byEDR
 
PDF
Covering Your Bases Parson
byEDR
 
PDF
CRE At A Crossroads Golin
byEDR
 
PDF
Covering Your Bases McDonald
byEDR
 
PDF
Strategic Growth Spiers
byEDR
 
PDF
Market Update Rossi
byEDR
 
PDF
Market Update - Rossi
byEDR
 
PDF
Market Update - Keene
byEDR
 
PDF
Market Update - Allen
byEDR
 
PDF
The World of CRE Finance
byEDR
 
PDF
Two Roads Diverged - Conway
byEDR
 
PDF
Brownfields Under Trump - Panel
byEDR
 
PDF
Brownfields Under Trump - Bartsch
byEDR
 
PDF
Covering Your Bases - Parson
byEDR
 
PPTX
EDR REC CREC-HREC Presentation - Boston DDD
byEDR
 
PPTX
Conducting the VEC Investigation for a Phase I - Boston DDD
byEDR
 
Measure twice shields
byEDR
 
Brownfields under trump panel
byEDR
 
How technology is changing opp danielson
byEDR
 
Measure twice van buren
byEDR
 
Covering your bases parson
byEDR
 
Covering Your Bases Parson
byEDR
 
CRE At A Crossroads Golin
byEDR
 
Covering Your Bases McDonald
byEDR
 
Strategic Growth Spiers
byEDR
 
Market Update Rossi
byEDR
 
Market Update - Rossi
byEDR
 
Market Update - Keene
byEDR
 
Market Update - Allen
byEDR
 
The World of CRE Finance
byEDR
 
Two Roads Diverged - Conway
byEDR
 
Brownfields Under Trump - Panel
byEDR
 
Brownfields Under Trump - Bartsch
byEDR
 
Covering Your Bases - Parson
byEDR
 
EDR REC CREC-HREC Presentation - Boston DDD
byEDR
 
Conducting the VEC Investigation for a Phase I - Boston DDD
byEDR
 

Recently uploaded

PDF
Guide to Safely Buying Gmail Accounts for Safely-Aged.pdf
bysmartusapva.com
 
PPTX
is models in 2nd year college helpguide.pptx
bysuzusabnic
 
PDF
Andria Sergio - Known For Her Accuracy And Professionalism
byAndria Sergio
 
PDF
Why Should You Consider Buying Verified LinkedIn Accounts_.pdf
byusatophub96
 
PDF
Serhii Herasymov: Expert sales in outsource companies: your technical special...
byLviv Startup Club
 
PDF
Top Five Trends Shaping RCM in 2026 - Revenue Cycle Resources-HUB
byRevenue Cycle Resources-HUB
 
PDF
Affordable Way to Buy Verified Airbnb Accounts in Bulk (2).pdf
byzuhd454
 
PDF
Securiport - Specializes In Civil Aviation And Intelligent Immigration Techno...
bySecuriport
 
PDF
Safe Ways to Purchase Gmail Accounts (PVA & Aged) for Your Team.pdf
bypvaisback
 
DOCX
SEO's & Digital Marketing Case Study 2026
bypalwasha57
 
PDF
How to Buy Verified Bybit Accounts in 2026.pdf
bymarketing
 
PDF
20260203 CDB Investor Deck_Feb26_vF.pdf
byyihong30
 
PDF
LA Building Inspections & Compliance offers
byoliversmith20262019
 
DOCX
How to Buy Verified Bybit Accounts in 2026 not risk .docx
bymarketing
 
PDF
Step-by-Step 17 Guide to Purchasing Verified PayPal Account.pdf
byhttps://www.usaallhub.com/product/buy-verified-paypal-accounts/
 
PDF
Fraud Warning MOALA WALLET Exchange Exposed
byTraderKnows.com
 
PPTX
PoWerPointaboutEmployMEnt202120222020320202025lolololol
byHimari7
 
PDF
AnyDesk, The Leading Remote Desktop Software | AnyDesk, o software líder em a...
byTechMeetups
 
PDF
Certification Training Course On New Skills Across Globe
bySprintzeal
 
PDF
Iryna Rudenko: Follow the Money: How Investment Trends Define IT Niches (UA)
byLviv Startup Club
 
Guide to Safely Buying Gmail Accounts for Safely-Aged.pdf
bysmartusapva.com
 
is models in 2nd year college helpguide.pptx
bysuzusabnic
 
Andria Sergio - Known For Her Accuracy And Professionalism
byAndria Sergio
 
Why Should You Consider Buying Verified LinkedIn Accounts_.pdf
byusatophub96
 
Serhii Herasymov: Expert sales in outsource companies: your technical special...
byLviv Startup Club
 
Top Five Trends Shaping RCM in 2026 - Revenue Cycle Resources-HUB
byRevenue Cycle Resources-HUB
 
Affordable Way to Buy Verified Airbnb Accounts in Bulk (2).pdf
byzuhd454
 
Securiport - Specializes In Civil Aviation And Intelligent Immigration Techno...
bySecuriport
 
Safe Ways to Purchase Gmail Accounts (PVA & Aged) for Your Team.pdf
bypvaisback
 
SEO's & Digital Marketing Case Study 2026
bypalwasha57
 
How to Buy Verified Bybit Accounts in 2026.pdf
bymarketing
 
20260203 CDB Investor Deck_Feb26_vF.pdf
byyihong30
 
LA Building Inspections & Compliance offers
byoliversmith20262019
 
How to Buy Verified Bybit Accounts in 2026 not risk .docx
bymarketing
 
Step-by-Step 17 Guide to Purchasing Verified PayPal Account.pdf
byhttps://www.usaallhub.com/product/buy-verified-paypal-accounts/
 
Fraud Warning MOALA WALLET Exchange Exposed
byTraderKnows.com
 
PoWerPointaboutEmployMEnt202120222020320202025lolololol
byHimari7
 
AnyDesk, The Leading Remote Desktop Software | AnyDesk, o software líder em a...
byTechMeetups
 
Certification Training Course On New Skills Across Globe
bySprintzeal
 
Iryna Rudenko: Follow the Money: How Investment Trends Define IT Niches (UA)
byLviv Startup Club
 

A Look at Brexit - Mellott

  • 1.
    CRE IN ACOMPLEX WORLD MAY 2, 2017
  • 2.
    • State ofthe Market • What’s influencing markets? • Some perspective: What really matters? • What’s next? CRE Outlook CBRE CRE IN A COMPLEX WORLD2 CRE IN A COMPLEX WORLD WHAT’S THE PLAN?
  • 3.
  • 4.
    • 2.5 millionsq. ft. of take-up in Central London • Prime rents unchanged in the city, but down 2% in West End • 14.7 million sq. ft. of availability • 6.6 million sq. ft. of completed construction expected • Less than 3 million sq. ft. (new) expected in 2018 CBRE CRE IN A COMPLEX WORLD4 CRE IN A COMPLEX WORLD STATE OF THE MARKET - LONDON Source: CBRE Research
  • 5.
    • Demand beganto taper off in 2016 (Q1 2017 19% below 10 year average) • Availability at 10-year average (14.7 million sq. ft.) • Office rents outside of London doing better CBRE CRE IN A COMPLEX WORLD5 CRE IN A COMPLEX WORLD STATE OF THE MARKET - LONDON Source: CBRE Research
  • 6.
    • The valueof real estate transactions in 2016 was down 25% YoY (most since GFC) • Central London investment down only 19% • Not all attributed to referendum • Volumes are down across the board CBRE CRE IN A COMPLEX WORLD6 CRE IN A COMPLEX WORLD STATE OF THE MARKET - LONDON Source: CBRE Research
  • 7.
    Figure 2: Capitalflows into global real estate (US$ billions) Source: CBRE Research, Real Capital Analytics, 2016. 368 586 85 189 191 64 113 78 44 156 171 70 73 284 180 172 329 83 233 396 108 303 458 113 316 566 105 107 501 288 EMEAUS$bn Americas APAC 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1,200 1,000 800 600 400 200 0 CAPITAL FLOWS INTO GLOBAL REAL ESTATE (US$ BILLIONS) CBRE CRE IN A COMPLEX WORLD7 Source: CBRE Research, Real Capital Analytics 2016.
  • 8.
  • 9.
    Figure 3: 2016prime capital value growth (annual change) Source: CBRE Research, NCREIF, 2016. 4.0% 5.4% 8.6% 8.7% 10.3% 6.6% 4.9% 2.7% 5.1% Office Retail Industrial AMERICAS EMEA ASIA PACIFIC 2016 PRIME CAPITAL VALUE GROWTH (ANNUAL CHANGE) CBRE CRE IN A COMPLEX WORLD9 Source: CBRE Research, NCREIF, 2016.
  • 10.
    Figure 4: 2016prime property rent growth (annual change) Source: CBRE Research, 2016. 0.2% 2.3% 1.9% -1.9% 6.6% 4.7% 1.8% 0.0% 0.9% Office Retail Industrial AMERICAS EMEA ASIA PACIFIC 2016 PRIME PROPERTY RENT GROWTH (ANNUAL CHANGE) CBRE CRE IN A COMPLEX WORLD10 Source: CBRE Research, 2016.
  • 11.
    6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 2004 2005 20062007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 OFFICE MARKET* VACANCY RATES (%) CBRE CRE IN A COMPLEX WORLD11 *All major markets where vacancy data are available except Moscow Source: CBRE Research
  • 12.
  • 13.
    In the UK Inthe rest of Europe Very Significant Significant Neutral Insignificant Very Insignificant 40% 35% 30% 25% 20% 15% 10% 5% 0% BREXIT BIG DEAL OR RED HERRING? CBRE CRE IN A COMPLEX WORLD13 Source: CBRE European Occupier Survey 2017.
  • 14.
    Access to sufficientlylarge/skilled labor pool Exchange rate fluctuations General policy uncertainty Ability to operate in European markets Possible changes to trading arrangements / tariff introductions Other 32% 28% 27% 8% 2% 3% BREXIT WHAT’S THE CONCERN? CBRE CRE IN A COMPLEX WORLD14 Source: CBRE European Occupier Survey 2017.
  • 15.
    MARCH 29: Article 50 issued APRIL 29:EU Summit signs off negotiating guidelines to Commission MAY 7: French elections JUNE Substantive ‘divorce’ negotiations on money, EU citizens and N Ireland JULY, AUGUST (Go on holiday) SEPTEMBER German elections ARTICLE 50 WHAT HAPPENS NEXT? CBRE CRE IN A COMPLEX WORLD15
  • 16.
    GREATEST CHALLENGES FORORGANIZATIONS FUTURE OPERATIONS EMEA OCCUPIER SURVEY KEY FINDINGS CBRE CRE IN A COMPLEX WORLD16 Source: CBRE Research, 2017; EMEA Occupier Survey Report 2017.
  • 17.
    - 100 200300 400 500 600 700 800 900 UK Germany France Sweden Netherlands Spain Italy Norway Finland Denmark Belgium Poland Russia Austria Ireland EUROPEAN CRE INVESTMENT 2003-2016 CBRE CRE IN A COMPLEX WORLD17 Source: CBRE Research 2016.
  • 18.
    0% 10% 20%30% 40% 50% 60% 70% 80% Czech Republic Russia Norway Sweden Poland Ireland Italy Netherlands Spain France Germany UK London 0% 10% 20% 30% 40% 50% 60% 70% 80% Czech Republic Switzerland Portugal Russia Denmark Netherlands Italy Belgium Spain France Germany UK Total investment from North America, % of total KEY DESTINATIONS IN EUROPE TOP COUNTRIES 2013-2016 CBRE CRE IN A COMPLEX WORLD18 Source: CBRE Research 2016. London Total investment from Asia, % of total
  • 19.
  • 20.
    • London mostconnected city* • Hosts 40% of European HQ for world’s top companies** CBRE CRE IN A COMPLEX WORLD20 CRE IN A COMPLEX WORLD SOME PERSPECTIVE *Source: Global and World Cities Network **Source: Deloitte
  • 21.
    • 65,000 peopleEU-facing financial services • 3% of UK office stock (6 million sq. ft.) • About the level of space leased in Central London every 6 months CBRE CRE IN A COMPLEX WORLD21 CRE IN A COMPLEX WORLD SOME PERSPECTIVE Source: CBRE Research
  • 22.
    • Top 10global investment banks 52,000 in London • Could see 27% of those jobs moved • Equal to 5 weeks of leasing in London CBRE CRE IN A COMPLEX WORLD22 CRE IN A COMPLEX WORLD SOME PERSPECTIVE Source: CBRE Research
  • 23.
    • In 2006financial services accounted for 41% of Central London leasing (sq. ft.) • In 2016 only 23% • London has diversified • Tech and media (immigration key) CBRE CRE IN A COMPLEX WORLD23 CRE IN A COMPLEX WORLD SOME PERSPECTIVE Source: CBRE Research
  • 24.
    • London boastsa lot of advantages • Housing, schools, infrastructure and culture • Legal and regulatory environment • Alternatives aren’t clear • Impacts will be over the long term CBRE CRE IN A COMPLEX WORLD24 CRE IN A COMPLEX WORLD SOME PERSPECTIVE
  • 25.
    CBRE CRE INA COMPLEX WORLD25 CRE IN A COMPLEX WORLD SOME PERSPECTIVE TRANSPARENCY FX ADVANTAGE SIZELIQUIDITY
  • 26.
    -6% -4% -2% 0% 2% 4% 6% Y-o-Y % ChangeRecession Nonfarm Emp. 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2017 2016 REAGAN SHOT FALKLANDS WAR US EMBASSY IN BEIRUT BOMBED CHERNOBYL DISASTER GLASTNOST IN USSR BERLIN WALL FALLS US INVADES KUWAIT GULF WAR STARTS FALL OF THE SOVIET UNION EUROPEAN UNION BEGINS BOSNIAN WAR ENDS EUROZONE CREATED 9/11 US INVASION OF IRAQ RUSSO-GEORGIAN WAR OBAMA ELECTED SYRIAN WAR JAPANESE TSUNAMI ISIS EMERGES CRIMEA ANNEXED PARIS ATTACKS BREXIT VOTE NAFTA SIGNED HURRICANE KATRINA BUSH I ELECTED CLINTON ELECTED BUSH II ELECTED TRUMP ELECTED PERSONAL COMPUTER INTRODUCED CRE IN A COMPLEX WORLD GEOPOLITICS MATTER BUT NOT LIKE YOU THINK CBRE CRE IN A COMPLEX WORLD26 Source: CBRE Research; U.S. BLS, Q4 2016.
  • 27.
    UNEMPLOYMENT THE CYCLE MATTERS CBRECRE IN A COMPLEX WORLD27 Source: CBRE Research, Macrobond, IMF, WEO. G7 UNEMPLOYMENT RATE (%) 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
  • 28.
    OUTLOOK EMPLOYMENT AND INTERESTRATES CBRE CRE IN A COMPLEX WORLD28 Source: CBRE Research, Macrobond.
  • 29.
  • 30.
    Figure 7: Purchasingactivity relative to 2016, global and regional Source: CBRE 2017 Global Investor Intentions Survey. Global EMEA Americas Asia Pacific More than 20% lower Between 10% - 20% lower Between 10% - 20% higher More than 20% higher Up to 10% lower About the same Up to 10% higher % 50 45 40 35 30 25 20 15 10 5 0 PURCHASING ACTIVITY RELATIVE TO 2016 GLOBAL AND REGIONAL CBRE CRE IN A COMPLEX WORLD30 Source: CBRE 2017 Global Investor Intentions Survey.
  • 31.
    on ORTH C #1 SYDNEY #2 TOKYO #3SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW EMEA ASIA PACIFIC TOP TARGET CITIES BY REGION CBRE CRE IN A COMPLEX WORLD31 Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE ASIA PACIFIC Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC n RTH #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS EMEA ASIA PACIFIC Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDNEY #2 TOKYO #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PACIFIC Source: CBRE 2017 Global Investor Intentions Survey. Figure 12: Top target cities by region #1 LOS ANGELES #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #1 SYDN #2 TOK #3 SHAN #4 MELB #5 BRISB #6 HON #1 LONDON #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW AMERICAS EMEA ASIA PAC Source: CBRE 2017 Global Investor Intentions Survey. #2 DALLAS/FORT WORTH #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #2 TOKYO #3 SHANG #4 MELBO #5 BRISBA #6 HONG #2 BERLIN #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW Source: CBRE 2017 Global Investor Intentions Survey. #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #3 MADR #4 AMST #5 PARIS #6 WARS Source: CBRE 2017 Global Investor Intentions Survey. #3 NEW YORK #4 WASHINGTON DC #5 ATLANTA #6 SAN FRANCISCO #7 SEATTLE #3 SHANGHAI #4 MELBOURNE #5 BRISBANE #6 HONG KONG #3 MADRID #4 AMSTERDAM #5 PARIS #6 WARSAW Source: CBRE 2017 Global Investor Intentions Survey. AMERICAS EMEA ASIA PACIFIC
  • 32.
    Source: CBRE 2017Global Investor Intentions Survey. 79% DIRECT 26% DEVELOPMENT FUNDING 8% CORPORATE AQUISITIONS 7% OTHER EQUITY 7% OTHER DEBTS 49% PARTNERSHIP / JOINT VENTURE / PARTIAL INTERESTS 22% LISTED REAL ESTATE (INCLUDING LISTED REITS) PREFERED INVESTOR VEHICLES 2016 VERSUS 2017 CBRE CRE IN A COMPLEX WORLD32 Source: CBRE 2017 Global Investor Intentions Survey. Figure 15: Preferred investor vehicles Source: CBRE 2017 Global Investor Intentions Survey. 79% DIRECT 26% PROPERTY FUND 26% DEVELOPMENT FUNDING 16% PRIVATE DEBT 8% CORPORATE AQUISITIONS 7% OTHER EQUITY 7% OTHER DEBTS 5% CMBS 49% PARTNERSHIP / JOINT VENTURE / PARTIAL INTERESTS 22% LISTED REAL ESTATE (INCLUDING LISTED REITS) Figure 15: Preferred investor vehicles 79% DIRECT 26% PROPERTY FUND 26% DEVELOPMENT FUNDING 16% PRIVATE DEBT 8% CORPORATE AQUISITIONS 7% OTHER EQUITY 7% OTHER DEBTS 5% CMBS 49% PARTNERSHIP / JOINT VENTURE / PARTIAL INTERESTS 22% LISTED REAL ESTATE (INCLUDING LISTED REITS) 26% PROPERTY FUND 16% PRIVATE DEBT 7% OTHER DEBTS 5% CMBS Figure 15: Preferred investor vehicles Source: CBRE 2017 Global Investor Intentions Survey. 79% DIRECT 26% PROPERTY FUND 26% DEVELOPMENT FUNDING 16% PRIVATE DEBT 8% CORPORATE AQUISITIONS 7% OTHER EQUITY 7% OTHER DEBTS 5% CMBS 49% PARTNERSHIP / JOINT VENTURE / PARTIAL INTERESTS 22% LISTED REAL ESTATE (INCLUDING LISTED REITS) Figure 15: Preferred investor vehicles Source: CBRE 2017 Global Investor Intentions Survey. 79% DIRECT 26% PROPERTY FUND 26% DEVELOPMENT FUNDING 16% PRIVATE DEBT 8% CORPORATE AQUISITIONS 7% OTHER EQUITY 7% OTHER DEBTS 5% CMBS 49% PARTNERSHIP / JOINT VENTURE / PARTIAL INTERESTS 22% LISTED REAL ESTATE (INCLUDING LISTED REITS) Figure 15: Preferred investor vehicles Source: CBRE 2017 Global Investor Intentions Survey. 79% DIRECT 26% PROPERTY FUND 26% DEVELOPMENT FUNDING 16% PRIVATE DEBT 8% CORPORATE AQUISITIONS 7% OTHER EQUITY 7% OTHER DEBTS 5% CMBS 49% PARTNERSHIP / JOINT VENTURE / PARTIAL INTERESTS 22% LISTED REAL ESTATE (INCLUDING LISTED REITS) Source: CBRE 2017 Global Investor Intentions Survey. 79% DIRECT 26% DEVELOPMENT FUNDING 8% CORPORATE AQUISITIONS 7% OTHER EQUITY 7% OTHER DEBTS 49% PARTNERSHIP / JOINT VENTURE / PARTIAL INTERESTS 22% LISTED REAL ESTATE (INCLUDING LISTED REITS)
  • 33.
    Source: CBRE 2017Global Investor Intentions Survey. Figure 16: Investors main motivation for investing in real estate 2017 Yield relative to other asset classes Higher income return than other assets classes Expectation of better capital value growth than asset classes Other Hedge against inflation Asset class diversification Steady income stream from rents % 0 5 10 15 20 25 30 35 30 20 15 Geographic diversification 7 2 0 0 20 Yield relative to cost of debt (positive leverage advantage) 6 INVESTOR MOTIVATION WHY INVEST IN REAL ESTATE? CBRE CRE IN A COMPLEX WORLD33 Source: CBRE 2017 Global Investor Intentions Survey.
  • 34.
    Source: CBRE 2017Global Investor Intentions Survey. Figure 17: Investor main obstacles to purchase 2017 Asset pricing Availability of assets Competition from other investors Low market transparency Other Currency risk Tax Deflation % 0 6010 3020 40 50 48 25 16 3 2 2 1 1 1 0 Availability and/ or cost of debt Lack of investment partners INVESTOR CHALLENGES MAIN OBSTACLES TO PURCHASE CBRE CRE IN A COMPLEX WORLD34 Source: CBRE 2017 Global Investor Intentions Survey.
  • 35.
    Figure 18: Investormain concerns 2017 A global economic shock undermining occupier demand Faster than expected, a bubble waiting to burst Overbuilding leading to excess supply Property is overpriced, a bubble waiting to burst A local economic shock undermiming occupier demand Local politcal instability Some other property market related shock Higher than expected owners Other Distressed sales by existing owners Deflation % 0 5 10 15 20 25 Global political instability (conflict and or terrorism) A change of government policy that makes property less attractive 22 6 2 1 1 1 6 4 21 10 10 15 0 Source: CBRE 2017 Global Investor Intentions Survey. INVESTOR CHALLENGES MAIN CONCERNS CBRE CRE IN A COMPLEX WORLD35 Source: CBRE 2017 Global Investor Intentions Survey.
  • 36.
  • 37.
    • Europe currentlywell-positioned cyclically • Late cycle • Some room to run • Politics increasingly important, but not how you think • Watch interest rates and FX CBRE CRE IN A COMPLEX WORLD37 CONCLUSION
  • 38.
    THE WORLD ATAN INFLECTION POINT CBRE CRE IN A COMPLEX WORLD38
  • 39.
    THANK YOU DARIN MELLOTT Director,Research and Analysis CBRE