Available investment capital for 2013 has increased 4% to USD311bn over the last six months. Capital available increased across all regions except for Asia Pacific which was down by 4%.
The Increase in capital available was driven by rise in new equity in Europe up by 7% to USD58bn, while Asian and American investors are more optimistic about leverage. We see a greater focus on single country funds, representing 57% of available capital. Investors are focussed on markets they know best and where they are able to deploy capital more easily. Preference towards investing in home market and region reflect the continued uncertainty and risk aversion among investors. Asia Pacific is the main focus of inter-regional capital at present. This is not surprising as economies in Asia Pacific are in better shape, while real estate markets remain attractively priced as per our DTZ Fair Value Index™. We see an increase in funds moving up the risk curve reflecting the lack of core product in the market. This could place greater pressure on legacy funds targeting to deploy capital towards opportunistic assets as their investment periods start to run out.
Source: DTZ (Groupe UGL)