John B. Friedrichsen, Chief Financial Officer at Colliers International, said: “Our global analysis in this report gives a unique macro-view, providing a comprehensive look at the health of the economy as well as in-depth views of market sentiment that serve as a useful bellwether for local markets worldwide.”

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. Transactional activity in the first nine months of 2015 confirms this assessment, with $625 billion of direct property investment worldwide, representing an 11 percent increase over the same period of 2014 (Real Capital Analytics).

The GIO for 2016 found that despite a reduced appetite for risk, debt would play a greater role in the market next year as investors seek to boost cash-on-cash returns.

Colliers, a NASDAQ-listed global property company, estimates that up to US$400 billion of institutional funding could begin chasing global real estate to diversify and stop an ongoing bleed of cash driven by the underperformance of traditional fixed-income investments.

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.

This is being particularly driven by opportunity-led American private equity which is shifting from UK to continental Europe because it can achieve higher returns.

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.