U.S. Beats Europe and Asia as Growing Property Investment Target

Investors increased the amount of equity they plan to commit to U.S. real estate by 19 percent to $55 billion in the second half of last year, more than any other region, according to London-based broker DTZ.

Money excluding debt intended for the Asia Pacific region rose by 15 percent to $40 billion and planned equity investment in Europe grew by 6 percent to $62 billion in the six months through December, DTZ, a unit of Sydney-based UGL Ltd. (UGL), said in a statement today.

Buyers are more interested in offices, stores and warehouses in the U.S. because investment in a single country is seen as less risky and assets there aren’t perceived as overpriced, the broker said. Prices for U.S. commercial property are expected to climb in the next six months, extending a rebound that has sent values close to levels reached at the market’s peak in 2007, research firm Green Street Advisors Inc. said this month.

The amount of new capital committed to real estate investment fell by more than 30 percent to $34 billion in the period compared with the previous six months as money managers failed to meet target dates for fundraising, according to DTZ.

“Funds continue to remain focused on their home market or region, reflecting the uncertain market environment and investors’ risk aversion,” Hans Vrensen, DTZ’s global head of research, said in the statement.

More than half of all real estate funds being raised are targeting a single country, with 43 percent planning to invest only in the U.S. Ten percent target China and 9 percent concentrate on the U.K., the broker said.

To contact the reporter on this story: Neil Callanan in London at ncallanan@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

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