Cross border and domestic capital will continue to expand its allocation to global real estate as a result of the benign economic environment, says LaSalle Investment Management’s ‘Mid-Year 2015 Investment Strategy Annual (ISA).’ With interest rates remaining lower for longer, benchmark bond and real estate debt costs remaining low, and a steady, cyclical recovery underway around the world, real estate values continue to prove attractive. The secular themes of demographics, technology, and urbanization also continue to drive demand for space in specific areas. Globally, both overseas and domestic investors are likely to expand their real estate allocations due to the stable income produced by core assets generating yields at a healthy premium to sovereign and corporate bonds. As well, real estate is grounded in valuation metrics like replacement cost that are elusive in other asset classes, at a time when all asset prices are high.
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