The increasing acceptance of real estate as an alternative investment to stocks and bonds is being met by an increase in worldwide real estate investment opportunities.

The $100bn-plus now held for investment by US and some foreign-based opportunity funds is already driving capital investment flows, primarily in large property investments both towards and away from the US. More investment activity is also likely in middle market industrial and commercial firms through sales of excess real estate capacity and lease back transactions.

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Corporate real estate is attracting renewed investment interest. While most US corporations are now evaluating, and in some cases re-centralising, global expansion, there is still interest in acquiring strategic real estate assets, especially in low cost countries. At the same time, US corporations are focusing on strengthening their core businesses, by selling non-core real estate assets. Cities are forever growing and formerly remote locations eventually become central locations. This creates the need to re-evaluate, reposition or even dispose of corporate real estate assets. Local developers are capitalising on these opportunities to reshape urban environments.

Corporates are also improving the transparency of financial communications. As both strong and poor real estate portfolio management is highlighted, the pressure on management increases to create more value out of their real estate portfolios.

Jan Siemons is a partner in Ernst & Young.

E-mail: jan.siemons@nl.ey.com