A Bird’s Eye View of Global Real Estate Markets: 2011 update

That developing nations will grow at a faster pace than developed nations is not a novel concept.

Executive Summary

• Pramerica Real Estate Investors’ global universe of commercial real estate – which encompasses 55 developed and developing nations – grew to $23.9 trillion in 2010, up 7.3% from $22.3 trillion in 2009. Solid economic growth, particularly in the developing nations, propelled the expansion.
• The US continues to have the largest concentration of institutional grade real estate and the total size of its market will continue to grow. However, like many developed nations, its share of the global total is slowly slipping. The US’s share of the global total is 27.5%, down from 28.8% in 2009. Other developed nations such as Germany, France and the UK also lost market share in 2010, while the shares increased for developing nations such as China and Brazil.
• Distribution of institutional grade real estate is forecast to move toward the Asia Pacific region, whose share of the market grew to 25.8%, up from 23.6% in 2009, and is projected to grow to 36.7% in 2020. Meanwhile, the share of the US/Canada region is expected to drop to 26.5% in 2020 from 30.5% today and Europe’s share is expected to decline to 28.2% in 2020 from 36% today. The shares of Latin America and the Gulf Cooperation Council (GCC) are small and will remain stable.
• China and the US will produce about half (49.6%) of the global growth of institutional real estate over the next decade. China is the top contributor (29.4%), as its $1.4 trillion market is projected to grow six-fold to $8.4 trillion in 2020. The US market is forecast to grow 20.2% to $11.4 trillion, from $6.6 trillion today. Russia (4.4% of global growth), India (4.3%) and Brazil (3.8%) round out the top five contributors to growth.

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