Global cross border real estate investment activity continues to grow with transaction volumes rising by 9%1 in the first half of 2015. Geo-political change in multiple regions has been a powerful driver, as investors seek to manage risk and diversify. Shifting demographics and urbanisation patterns worldwide are also making investment decisions more complex.
One constant from the conversations Grant Thornton have with our real estate clients around the world is where to invest and in what project. Given the size of investments they are involved in, getting this right is critical. Another is that investing in new markets can be time consuming and sourcing up-to-date insights to inform decisions can be challenging.
Those insights inform the scope of this report. Uncovering opportunities for overseas investment and growth draws on interviews with real estate experts around the world and reveals that when weighing up options for overseas real estate investment, there is a tendency to rely on familiar territories and instinct to drive decision making. As a result, there’s a danger that investors miss potential opportunities, or even misread those they embark on.
Driven by ingrained experience, gut instinct is undoubtedly valuable. Based on separate research conducted by Grant Thornton, we estimate that around US$250 billion in global real estate investment per annum is made on instinct – it simply feels right2. This approach needs to be checked, however, to ensure unconscious bias isn’t swaying decisions, particularly as how we feel about a country can be based on the soft power allure it wields. By combining entrepreneurial instinct with greater factual analysis of global real estate opportunities, a better understanding of the drivers can reveal previously uncited opportunity and help maximise returns.
This report seeks to support investors in identifying how this combined approach can help lead to greater opportunity. It provides practical, achievable advice for investors looking to harness the forces shaping global real estate activity in order to hone their investment decisions.
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