According to a report published by CB Richard Ellis Group Inc. (CBG), the world’s largest commercial real estate services company (on the basis of 2010 revenues), global real estate investors are increasingly focusing on commercial real estate (CRE) properties in Germany, marking a paradigm shift from the erstwhile strong market in the U.K.
Earlier in 2010, the U.K. had led a market recovery from recession in Europe in terms of both transaction volumes and property values. However, recent surveys have unearthed that investors are currently concentrating on other lucrative markets such as Germany, possibly due to the degree of capital value growth already realized in the U.K.
In its report, CB Richard Ellis has anticipated about 32% of the global investors to purchase in Germany in 2011, up from 18% in 2010. The report divulged that investor confidence has plummeted in the U.K. as surveys revealed that investors are mulling over spending about half the amount it did in 2010.
The report also unearthed that retail properties have surpassed office properties as the most attractive purchasing proposition in 2011, with 43% of the investors vying for them compared to 34% in 2010. Furthermore, strategically located shopping malls in Germany have been found to offer yields almost similar to the peak values realized in 2006.
CB Richard Ellis is the global market leader in commercial real estate brokerage and advisory services for property leasing and sales, forecasting, valuations, origination and servicing of commercial mortgage loans, as well as project and real estate investment management.
The company has a broad range of real estate products and services, and an extensive knowledge of domestic and international real estate markets that enables it to operate as a single-source provider of real estate solutions.
CB Richard Ellis offers a range of services to occupiers, owners, lenders and investors in office, retail, industrial, multi-family and other types of commercial real estate assets globally under the CB Richard Ellis brand, and provides development services under the Trammell Crow brand.
We maintain our Outperform rating on CB Richard Ellis, which presently has a Zacks #2 Rank translating into a short-term Buy recommendation and indicates that the stock is expected to perform well above the overall U.S. equity market for the next 1−3 months.
We also have an Outperform rating and a Zacks #1 Rank (short-term Strong Buy) for NorthStar Realty Finance Corp. (NRF), one of the peers of CB Richard Ellis.
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