Real Estate Market Size 2017
categories: Research Paper, Americas, EMEAI, Asia Pacific, Australia, general, TEUBEN Bert, BOTHRA Hanskumar, Asset Allocation and Asset Liability Management, Investing (Investment Management), Performance Analysis, Portfolio Construction and Optimization, Risk Management, Asset Owners, Hedge Funds, Asset Managers (Quant or Fundamental), Banks, Indexes, Real Estate Indexes, Real Estate Products & Services, Alternatives, Fixed Income, Multi-Asset Class, Real Estate
MSCI began systematically estimating the size of professionally managed real estate investment markets in 2004. These estimates are fundamental to the creation of the IPD Global Annual Property Index and a range of other multinational indexes, and they provide insights into the coverage of MSCI’s direct property indexes. This paper sets out the 2017 market size estimates and explains the main changes that occurred between 2016 and 2017.
- Market size rose in 2017. The size of the professionally managed global real estate investment market increased from $7.4 trillion in 2016 to $8.5 trillion in 2017.
- Currency was a big driver of market size estimates. Currency movements effectively increased the size of the global real estate investment market by approximately 5.3% in U.S. dollars (USD), in contrast to their negative impact in 2016 (-2.3%). Capital value growth and new developments in the market, such as new construction and sale and leaseback transactions, also contributed to the growth in market size.
- U.S. weighting decreased. The relative weight of the U.S. within the IPD® Global Annual Property Index declined in 2017, following seven successive years of increases.
- Germany replaced China as the fourth-largest market. Germany ranked as the fourth-largest national market, overtaking China, which had held this position for two years (2015 and 2016). Although both markets grew in 2017, Germany’s increase was larger.
- MSCI’s index coverage increased by 50 bps globally and by 10 bps within the IPD Global Annual Property Index. A number of country level changes were more pronounced. The representativeness of MSCI’s asset-level real estate indexes increased most in Hong Kong and Belgium, but decreased in Denmark and Spain.