Washington, DC– AFIRE, the association for international real estate investors focused on commercial property in the United States, released its 2022 International Investor Survey Report, underwritten by CBRE and Holland Partner Group. Austin, Atlanta, and Boston emerge as the top three cities for planned global investment in 2022, according to the report.
The survey, conducted in February of 2022, reveals institutional insight and intent towards future real estate investment, recognizing the altered cultural attitudes towards live-work preferences among US cities coming out of the prolonged pandemic. Investors indicate a sustained shift towards secondary and tertiary US cities for planned investment this year, and increasing investment in multifamily, life science and industrial assets, all among an overall positive outlook for US real estate assets among global investors.
“With the 2022 AFIRE International Investor Survey Report we now have a clearer picture on the longer-term impact of the pandemic on real estate investment, with altered cultural attitudes and sustained strength in investment in secondary and tertiary US cities, led by Austin, Atlanta, Boston and Dallas,” said Gunnar Branson, CEO of AFIRE. “Our AFIRE colleagues have responded to a dynamic environment with optimism and innovation to adapt for the better and report an overall positive sentiment towards investor activity and revenue growth over the coming year.”
The annual survey, which has been conducted for more than three decades, measured sentiment, trends, and capital flows for global institutional investment in real estate, with responses collected throughout February 2022 from the AFIRE membership—which represents nearly 175 organizations from 23 countries, with approximately US$3 trillion AUM—and the global institutional investor community.
“CBRE is proud to participate in this year’s AFIRE survey report that offers timely perspective on future real estate trends for global investors,” said Chris Ludeman, Global President, Capital Markets at CBRE. “Despite the challenges of the past two years, investors are upbeat in forecasting activity and growth for the coming year.”
The 2022 survey reflects investor sentiment from nearly two dozen countries and was designed to help understand the goals, challenges, and impacts of international investments on US and global real estate opportunities. Key insights from the survey report show:
US Real Estate Shows Sustained Strength
· Overall investor outlook remains positive as three in four respondents expect their volume of US real estate investment activity and revenue to increase throughout 2022
· Almost eight in ten investors plan to increase their US real estate investment in the next three to five years
· 90% of survey responds plan to increase investment in multifamily over the next three to five years, followed by life sciences (77%) and industrial (75%)
Increasing investment in US Secondary and Tertiary Cities
- Austin, Atlanta, Boston, and Dallas rank top US cities for planned investment this year
- Survey respondents selected Austin, Atlanta, and Boston as the top three cities for planned global investment in 2022, with London the only non-US city in the top five, followed by New York and Seattle
· Six in ten respondents plan to increase their investments in tertiary cities over the next few years, and seven in ten plan an increase in secondary cities
Growing influence of ESG
· 81% of survey respondents indicated that ESG criteria would be very important over the next five years (increasing from 69% in 2021)
· Actionable climate change strategies (89%) and carbon footprint reduction measures (90%) are rated as the most important ESG priorities for US real estate investments in the near future
· Diversity (74%) and talent attraction/ development (75%) follow environmental factors among ESG trends
· Almost nine in ten respondents recognize the future financial benefit of taking action now on ESG. Notably, more than half of respondents (55%) agree that they would accept a lower than-expected rate of return if it meant realizing other social or environmental benefits
Opportunities to Address Social Concerns
· Housing affordability (85%), economic inequality (82%) and market affordability (78%) ranked highest among social concerns for surveyed investors
· Public health continued to be a prominent concern for investors (75% rank it as somewhat to very concerning), though this dropped from 2021 (79%) as more therapies and preventative measures have evolved over the past year
“With this year’s report we have had an opportunity to bring together a global community of investors and to explore meaningful future trends in institutional real estate investment,” said Clyde Holland, Executive Chairman of Holland Partner Group. “Holland Partner Group is proud to again provide sponsor support for this year’s invaluable survey report.”
The annual survey has been conducted for more than two decades and measured sentiment, trends, and capital flows for global institutional investment in real estate. The 2022 survey was collected in Q1 2022 from the AFIRE membership, which represents nearly 175 organizations with approximately US$3 trillion AUM, and the global institutional investor community. The report is underwritten by CBRE and Holland Partner Group, and was facilitated by PwC Research.
AFIRE is the association for international real estate investors focused on commercial property in the United States. Headquartered in Washington, DC, AFIRE was established in 1988 to provide an essential forum for real estate investment thought leadership. AFIRE membership is exclusive, granted by invitation only, and currently includes nearly 175 organizations from around the world representing institutional investors, investment managers, and service providers with approximately US$3 trillion in assets under management. Learn more at afire.org.