Global market size rose in 2016. The size of the professionally managed global real
estate investment market grew marginally from $7.1 trillion in 2015 to $7.4 trillion in
Currency movements distorted national changes. Currency movements effectively reduced the size of the global real estate investment market by approximately 2.3% in U.S. dollar (USD) terms. In contrast, capital value growth and new developments in the market, such as new construction and sale & leaseback transactions, were the main contributors to the growth in market size.
The U.S. weighting climbed again. The relative weight of the U.S. increased within the IPD® Global Annual Property Index in 2016, for the seventh consecutive year. The higher weighting of the U.S. in the index resulted from capital growth, new developments and other capital expenditure, as well as continued depreciation of many currencies against the U.S. dollar.
Japan overtook the U.K. for second spot. Japan has once again become the second biggest market, overtaking the U.K., which had been the second biggest market in the previous two years (2014 and 2015); this was mainly due to the U.K. currency’s depreciation in 2016.
Capital value growth pulled up global markets. Capital value growth in local currencies in both the U.S. (2.6%) and Japan (2.7%) surpassed the global average of 2.5% in 2016, based on the IPD Global Annual Property Index. However the U.K., the third largest market in 2016, had a negative capital value growth of -0.8%.
Source : MSCI