Investor sentiment toward real estate is projected to remain positive globally, according to the Global Investor Outlook (GIO) 2016 survey by Colliers International. Primary target markets will continue to draw the most interest, with moderating risk appetite, stable economic conditions, and low interest rates driving increased investment in secondary markets.

A key finding of the report indicates that of the more than 600 investors Colliers surveyed, over half (52 percent) will increase fund allocations to real estate in 2016, while only 11 percent plan for a decrease.  Real estate investment is therefore on track for continued growth in 2016, with the global investment community bullish, especially in the U.S., but also in other core markets in Europe and across the globe.

Key global takeaways from this report include:

  • Real estate continues to appeal. Sentiment toward real estate remains positive, with global transactions set to exceed 2014 levels by year end and nearing pre-financial crisis levels. More than half of the respondents with multi-asset portfolios also said that they would increase their real estate allocations in the next 12 months.
  • Liquid markets still preferred. While the ‘search for yield’ has pushed some investors up the risk curve toward secondary assets and more peripheral markets, the most liquid markets (U.S., U.K., Germany, Australia and Japan) and global gateway cities (London, Paris, New York, San Francisco, Tokyo and Sydney) remain the primary target for global cross-border investors over the next 12 months. In entering peripheral, higher-yielding markets, liquidity is being seen as an obstacle.
  • Hot pricing. 2016 will see a greater emphasis on secure income and asset management to drive performance. For some investors, it’s getting harder to achieve return expectations, particularly in ‘overcrowded’ core markets, which are seen as expensive and fully priced by many. Some fund managers cite a growing misalignment between their client return expectations and what the market offers.
  • Risk appetite moderates. International investors remain confident, but recent economic volatility and geopolitical events have made them more cautious. In particular, there is apprehension that the economic environment could change at any time. China and U.S. interest rates are just two issues resonating with investors.
  • Local partnering. Colliers’ survey results show that more global investors will partner with local expertise and acquire platforms as a means of placing substantial amounts of capital with confidence.
  • Return of debt. Up from 78% last year, the majority of investors (82%) will use debt to finance acquisitions, suggesting that the equity phase of the cycle is giving way to a debt phase.

In EMEA specifically, Colliers has uncovered several key findings including:

  • Investors turn to Europe for greater value. European volumes are expected to increase further in 2016 driven by a variety of prime markets and attractive lending conditions. However fewer investors expect to be net buyers. US investors remain committed to Europe, with a third of them planning to invest in EMEA during the next 12 months.
    Investors from outside EMEA will typically have more of a narrow focus around London, Paris and the key German cities, with Madrid also on the radar. Asian capital will continue to focus on London and German cities in 2016, underscoring investors’ reduced appetite for risk.
  • CBD offices the preferred sector. Central Business District (CBD) offices are the main target across EMEA investors, followed by shopping centres and new development opportunities in Continental Europe. In the UK, CBD offices were succeeded by industrial & logistics, residential and last new development opportunities.
  • Direct investment remains the most popular way to the market. 60% of surveyors, who plan to increase exposure to EMEA markets, intend to do so through direct purchase by sole investors. Investment through joint venture structures accounts for only 19% of total EMEA investment in real estate, whereas the remaining 21% of vehicles are distributed evenly across debt vehicles, third party funds and real estate investment trusts (REITs).
  • Portfolio expansion aided by greater availability of debt. Our survey shows that 49% of EMEA investors are more likely to take on more risk in the next 12 months as they further plan to expand their portfolios. 83% of them say they are likely to use debt as debt conditions have improved and are expected to continue to do so into 2016. 
  • Central Eastern Europe investments. The region of Central Eastern Europe (CEE) is attracting more interest from capital moving up the risk curve and chasing yield. As a result, investment volumes in CEE have increased by 9% since last year. In CEE and across the rest of Europe, growing competition has led to an increase in value-add funds during 2015, looking to partner with local asset managers to help de-risk the process, whilst the focus has been on retail and logistics portfolios rather than single assets.


Overall, 2015 for the Greek real estate market was a very unstable period due to various political and economic developments. National elections followed by a possible Grexit scenario left the market in an environment of uncertainty and resulted in limited number of transactions as investors were awaiting the turnout of the political and economic developments. Still, the second half of the year proceeded with a cautious interest from, both investors and buyers for realising actual transactions. In that mood, two office building transactions with the guidance of Colliers International, were concluded in H2 2015 from foreign investors proving that office properties remain the preferred sector for investors and that deals can also be made in a more risky environment.  

It is our estimation, that this trend will continue in 2016 with investors, cautiously though, targeting office assets at prime locations regardless of their grading. The focus will remain on both single assets and portfolios and on assets with renovation/ redevelopment potential.  

Leisure developments and resorts continue to be in favour of an increasing number of foreign funds, who are mostly looking into existing units that are in operation rather than greenfield developments. Retail in the form of investment product with guaranteed leases and international end users will also be targeted by a number of investors followed by logistic assets under certain conditions and terms.

“We feel conservatively optimistic about 2016. Despite the turmoil that the market went through, many international investors remain undeterred and ready to expand their portfolios, with all the potential risks involved ” commented Ana Vukovic, Managing Director | Greece & Serbia at Colliers International. This trend was also evident from the Global Investor Outlook survey outcome that Colliers conducts on an annual basis, where 49% of the EMEA investors are estimated to take on more risk in their investment expansions during 2016. 


“We will look back on 2015 as a year of positive change with improving fundamentals in each market segment. We are hopeful that this trend will continue in the future and that the Serbian real estate market will live up to its full potential” stated Uros Vukomanovic MRICS, General Manager | Serbia.