LOS ANGELES-The Americas was the best-performing region globally for real estate investment value, according to the first-quarter 2012 CBRE Capital Value Index—which marks a shift from 2011, when Asia-Pacific set the pace for global real estate investment performance.
“There has been a marked increase in investor interest in the Americas’ prime properties over the last year, and this is reflected in the CBRE Americas Capital Value index,” says Dr. Raymond Torto, CBRE’s global chief economist. “Last year at this time, the Americas was showing respectable gains, but were far behind the 19% annual performance witnessed by the Asia-Pacific Capital Value Index. The year-over-year change in capital values for the Americas in first-quarter 2012 was 9.6%.”
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Over the last year, the Global Capital Value Index, which measures capital value growth for prime office properties, rose 5.7% percent, mostly in the early part of the one-year period since both capital values and rents lost upward momentum as the year wore on. The Americas Capital Value Index showed the strongest improvement in first-quarter 2012, leading over Asia-Pacific and EMEA (Europe, Middle East and Africa) on the basis of both quarterly and year-over-year gains. Investors remain risk-averse and highly selective and are most willing to divert capital to high-quality, prime assets. While expanding noticeably, the Index still stands 17.4% below its pre-recession peak.
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EMEA’s Office Capital Value Index dropped 99 bps in first-quarter 2012, but remains 0.7% higher than a year ago. While office capital values have been recovering for several years now, only the Asia-Pacific Office Capital Value Index has surpassed its pre-recession peak and stands at 208.5. Relative to the pre-recession peak, the first quarter’s index value is now 1.1% above that peak and has recovered 31% from its pre-recession trough of 159 recorded in third-quarter 2009.
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The Global Office Rent Index, which is composed of data from 123 cities around the world, remains 10.2% below its pre-recession peak value of 120, and the improvement over the past year has been modest, with a 3.4% growth rate. While the Americas office market is recovering slowly, the rate of improvement was the weakest for the Americas Rent Index since its trough in fourth-quarter 2010. However, the Rent Index’s quarterly gain was the strongest of all three global regions in first-quarter 2012.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
