The US commercial property market has been ranked by foreign investors as their top choice for investment this year and considered as the best opportunity for price appreciation, according to a survey of foreign property investors.
When ranked among markets targeted for property investment this year, the US got four times as many votes as the UK, which ranked second in the survey, which was conducted by the Association of Foreign Investors in Real Estate (Afire).
Around 65 percent of the respondents said the US possessed the best opportunity for price appreciation, well above the 10 percent who put China in second spot.
“As the fear of a double- dip recession has faded, investors are becoming more enthusiastic about the prospects for the US economy and are taking aim at real estate investment opportunities in the US,” said James Fetgatter, chief executive of Afire.
However, the selection of real estate types shows that investors are not confident on a near-term recovery in the US jobless rate.
Foreign investors put apartments on the top of the list, followed by retail, hotel, office and industrial.
“You talk to economists, and they’re saying that we’re going to have 9 percent or 8 percent unemployment for the next several years. That doesn’t bode well for offices,” said Mr. Fetgatter.
The survey respondents own over US$627 billion worth of property worldwide, including US$265 billion in the US. Around 72 percent of the respondents have plans of increasing US investment this year.
“The increase in the interest and perception of the US was a surprise,” said Mr. Fetgatter.
New York and Washington scored about four times higher than Boston, which ranked third. “They really are focused on New York and Washington and not the entire US,” he said, adding that “they’re not hitting a lot of the market yet.”
Rounding out the top five list of countries for investments were Germany, China and France.