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Foreign Investors Continue to Prefer Industrial Assets, Latest AFIRE Survey Reveals

Industrial and multifamily were the top two real estate sectors where foreign investors would like to increase their exposure in 2019.

Once again in 2019, foreign investors in U.S. commercial real estate indicated they would most like to increase their allocations to industrial properties, according to this year’s survey by the Association of Foreign Real Estate Professionals (AFIRE), an organization promoting cross-border real estate investment. Seventy-nine percent of 2019 survey participants said they would like to increase their exposure to U.S. industrial real estate, with multifamily investment coming in second, with 71 percent of respondents saying they would like to increase their exposure to the property type.

On the list of global cities survey participants consider most stable and secure for real estate investment, New York came in first, with 30 percent of respondents picking it, followed by Tokyo (11 percent), Paris (8 percent), Boston (7 percent), Singapore (also at 7 percent) and Los Angeles (5 percent). New York, Boston and Los Angeles also ranked near the top of global cities for capital appreciation, with New York coming in second, with appreciation of 12 percent, and Boston and Los Angeles sharing the fourth spot with Frankfurt and Seattle, with appreciation of 5 percent. London came in first for capital appreciation this year, with 16 percent.

As a result, New York, Boston and Seattle made the list of top five global cities where international real estate investors would like to increase their exposure, along with Berlin and San Francisco.

However, New York also came in second on the list of cities where investors would like to decrease their exposure, joining London (number one), San Francisco, Chicago, Washington, D.C. and Los Angeles.

Overall, more than 60 percent of survey participants indicated their outlook on cross-border investment remains the same as last year, with slightly less than 25 percent indicating they feel more pessimistic and a little more than 10 percent indicating they are more optimistic.

When it comes to investing in U.S. real estate specifically, more than 50 percent said they maintain the same outlook as in 2018, more than 30 percent said they feel it’s less attractive than it has been and 14 percent said it’s more attractive.

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