MSCI: global real estate investment market size climbs to almost $9 trillion with top three markets unchanged

The overall increase in the size of the global real estate investment market was recorded despite currency movements effectively decreased the size of the global real estate investment market by approximately -2.6% in US dollars, in contrast to +5.3% impact from 2017.

The relative weight of the US market within the MSCI Global Annual Property Index increased in 2018 by 94 bps to 40.9%, following a decline in 2017. Japan remained the second largest market with a 10.8% weight, despite its share increasing by 9 bps, while the UK remained in third position, with its relative weight decreased by 39 bps to 9.3% despite the investment market’s growth by £28 billion to £560 billion, MSCI data shows.

China moved into the fourth position in the overall market size estimate above Germany, although the absolute difference of US$ 5 billion is relatively small, according to MSCI. Both China and Germany saw increases in absolute market size, however the increase for China was bigger.

MSCI says its estimates of the size of the global professionally managed real estate investment market are based on the most recent information available from public and private sources across 32 countries. The estimates are driven by national market changes, including local capital growth fluctuations, currency movements and structural changes within each market.

Furthermore, in 2018 MSCI’s index coverage increased by 20 bps globally and by 30 bps within the MSCI Global Annual Property Index. Several country level changes were more pronounced, with the representativeness of MSCI’s asset-level real estate indexes increasing by 15.2% in France and 22.7% in Germany.

Jay McNamara, Head of Real Estate at MSCI explains:

“It’s encouraging to see MSCI’s index coverage has increased in the past year, a signal that the global real estate market is on the right track to become more transparent, something which is undoubtedly positive for investors and the industry as a whole.”

MSCI’s 2018 global real estate investment review continues tomorrow.

james.wallace@realassetmedia.com