The Netherlands was a comparatively distant second place, with 9.7%, followed by a cluster of 10 further markets which all beat the MSCI Global Annual Property Index’s 2.8% capital growth in 2018. They were: the Czech Republic (7.4%), Sweden (6.4%), Germany (5.9%), Australia (4.6%), Spain (4.1%), Ireland (4.1%), Denmark (4.0%), New Zealand (3.7%), Austria (3.0%) and Norway (2.9%).
All other countries recorded lower capital growth than the MSCI Global Annual Property Index – with Belgium the only market of the 25-strong country index to record capital deprecation in 2018, at -0.7%.
Negative capital growth occurred in Belgium. The US recorded capital growth of 2.5% in 2018, 30 bps below the MSCI Global Annual Property Index’s average, while China, the market with the second largest increase in weight in 2018, saw capital growth of 2.3%.
Overall, the size of the professionally managed global real estate market expanded to $8.9 trillion in 2018 from $8.5 trillion in 2017. At a global level, currency movements decreased the size of the global real estate investment market by approximately -2.6% in USD terms, while capital growth and other factors (including new developments) increased total market size.
Will Robson, Global Head of Real Estate Solutions Research at MSCI, explains:
“Our annual market size report is designed to give investors transparency and clarity into the workings of the global real estate market and provide the insight they need to make informed investment decisions. This year’s report has highlighted the significant impact currency fluctuations had on global real estate portfolios, as well as the interesting shifts at play in the UK, US and Chinese markets.”
MSCI began systematically estimating the size of the professionally managed real estate market in 2004. These estimates underpin the weightings of the MSCI Global Annual Property Index and a range of other multinational indexes, and they provide insights into the coverage of MSCI’s direct property indexes.