Foreign investors in real estate continue to repose their faith in the US markets as they believe the country provides the best opportunity for capital appreciation, while India is among the top five emerging market in this space, a survey says.
According to a survey conducted among the members of the Association of Foreign Investors in Real Estate (AFIRE), "In 2009, foreign investors in real estate say they remain committed to the US as their preferred real estate investment opportunity."
The United Kingdom emerged as the second-best country for capital appreciation, receiving 30 per cent of respondents' votes followed by China which received 10 per cent.
The survey further said the top five emerging markets are China, Brazil, India, Mexico and Turkey. China was considered as the top emerging market, followed by Brazil and India.
"New money is becoming available and the AFIRE survey points to an increased focus and interest in a few select markets for 2010, especially London and in the US, where prospects appear to be brightening," AFIRE's newly-elected Chairman Werner Sohier said.
Optimism about the state of the US real estate market remains strong, with nearly two thirds of respondents planning to increase their investment in the US in 2010 as compared to 2009.
In the June 2009 mid-year survey, half the respondents said they expected recovery by or before the second quarter of 2010, while in the 2010 annual survey, half the respondents said they expect the recovery by or before the fourth quarter of 2010.
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Globally, three cities emerged as clear targets for investors' real estate dollars.
London surged onto first place with a significant lead over both Washington and New York in second and third places respectively. Paris and Tokyo were placed as distant fourth- and fifth-place cities.
The survey was conducted in the fourth quarter of 2009 among the association's nearly 200 members. The respondents own more than $842 billion of real estate globally including $304 billion in the US.
As many as 51 per cent of respondents identified the US for providing the best opportunity for capital appreciation, against 37 per cent in 2008, the survey said.
Moreover, as a portion of global real estate, the US 2010 allocations for debt represented 80 per cent of the global pool and allocations for equity represented 49 per cent, the survey added.