Commercial property

Investors see opportunities across all major property sectors in 2013, says PwC

Commercial real estate offers varied investment opportunities across each major sector and a diverse number of cities, even though macroeconomic uncertainties still exist, such as the fiscal cliff, according to the fourth quarter 2012 findings of the PwC Real Estate Investor Survey.

According to the report, investors in the office sector are showing a greater acceptance for slower growth and less apprehension about moving further out on the risk spectrum.

Although core trophy assets remain the preferred target of both domestic and international investors, aggressive pricing and improved fundamentals have resulted in certain investors looking to buy either core in strong secondary markets or less-than-core in primary markets.

"The commercial real estate industry continues to show its investment durability as assets command attractive spreads over fixed-income investments and offer more stability than stocks, while most property sectors continue to post occupancy gains and rental rate growth," says Mitch Roschelle, partner, US real estate advisory practice leader, PwC.

"Foreign investors are particularly bullish on US commercial real estate as they look for stable investments during uncertain times abroad. In 2013, survey respondents expect to see an uptick in sales activity as property owners cull portfolios to take advantage of the low cap rate environment. And as investment capital continues its trend of matriculating beyond just apartments, cap rates are expected to compress across the entire asset class."

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