CONTENTS
INTRODUCTION 02
EXECUTIVE SUMMARY 03
AVAILABLE CAPITAL 04
TARGET PROFILE 08
INVESTOR PROFILE 12
OUTLOOK 16
CONTACTS 18
THE GREAT WALL OF MONEY | 1
INTRODUCTION
WELCOME TO THE LATEST ISSUE OF
CUSHMAN & WAKEFIELD’S GREAT WALL OF
MONEY REPORT. SINCE THE DEPTHS OF THE
GLOBAL FINANCIAL CRISIS (GFC) IN 2009,
WE HAVE BEEN TRACKING THE AMOUNT OF
NEWLY RAISED CAPITAL MOVING ACROSS
GLOBAL REAL ESTATE MARKETS. IN THIS LATEST
REPORT, WE LOOK AT THE CURRENT WALL
OF MONEY AND CONSIDER THE IMPLICATIONS.
While this cycle continues to see an extraordinary
level of capital targeting real estate around the
world, the pace of growth appears to have
moderated. As the real estate cycle enters a stage
ofmaturity in many key markets, investor focus has
shifted from raising new funds to identifying and
deploying capital already allocated to the sector.
Growth in the real estate sector over the last 10
years has been impressive, but real estate still lags
behind the bond and stock markets in market
capitalisation terms. We see signifcant potential
for further maturity and growth in the sector as
investors continue to seek out opportunities in
new cities, sectors and platforms.
While core real estate strategies remain highly
attractive, demand tends to outstrip supply in
manykey markets, pushing down cap rates (yields)
and challenging investors. Unable to fnd enough
existing core assets, investors are targeting
development or redevelopment projects that
createcore assets in top markets. On the risk-return
spectrum, this ‘build-to-core’ portfolio strategy falls
in the core-plus category, achieving a higher return
than core and at a risk level signifcantly below
value-add and opportunistic. Such ‘build to core’
strategies should prove fruitful both for investors
selling into the current demand wave as well as
strategic portfolio positions looking for solid,
longterm returns.
We expect 2017 to be marked by ongoing
competition to place capital and source attractive
opportunities. In addition to new strategies for
investment, we continue to expect new sources
ofcapital to be unlocked around the world from
countries such as China, Malaysia, Taiwan, and
South Africa.
Further details on who and what is behind the great
wall of money is contained in the report, alongside
further details on what to look out for in global real
estate capital markets.
THE GREAT WALL OF MONEY | 2
EXECUTIVE SUMMARY
The Great Wall of Money targeting
global real estate is in retreat – for
the frst time since 2011 – due to
a decline in available debt
0104
02
More equity is targeting the
Americas than EMEA for the
frst time on record
03
Lower levels of available debt,
refecting a drop of in loan
originations, reduced the total wall
of money available for investment
Investors are more focused on
deploying unspent or recently raised
equity than creating new vehicles
05
Fund strategies are increasingly
focused on single geography or
property types, refecting desire
for targeted exposures. However,
notable exceptions exist where the
global reputation of the fund manager
allows a broader investment scope
06
‘Build to core’ and value-add
strategies are flling the gap left
by the high demand and low supply
of core assets
THE GREAT WALL OF MONEY | 3
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