Despite low growth, the focus on further downside potential has receded over the last year. The macro outlook is more balanced and the recovery is expected to continue.
North American invested stock edged down by 0.5% despite 8% growth in both Canada and Mexico. Global stock is up 1%, as Asia Pacific offset declines elsewhere.
Deleveraging continued across North America in 2012, with equity up 2% and debt down 2%. But, the repercussions of this will be less severe than in Europe.
Property market sentiment remains mixed, despite the improving macro outlook. Lenders are more cautious than investors in our annual survey. Most investors feel buying opportunities have returned to normal and that debt availability has improved. In our view, sentiment has been slow to improve due to inflated expectations. But, despite this, things are not as bad as they seem, considering:
North American investment volumes were up 15% in 2012, the strongest of any region. Cross-border volumes have returned to their 2005 level. Volumes might be restricted going forward due to lack of sellers.
All US markets are classified as attractive or very attractive, ahead of Europe and Asia Pacific. In fact, relative value is at the best level in six years, due to lower bond yields and better growth outlook.
North American liquidity tops all other regions. With relative value abundant globally, we think investors will look at liquidity more closely. North American markets will be a net beneficiary of this in future.
Source : DTZ (Groupe UGL)