Property Deals Seen at Pre-Financial Crisis Levels in 2013 - Cushman & Wakefield

Real estate deals across the globe could surge to record levels in 2013 on the back of improving North American and Asian sentiments, and increased interest from state-owned investment funds.

According to a report from the property consultant Cushman & Wakefield cited by Reuters, global investment volumes could increase 14 percent this year to top $1tn (£669bn, €772bn), the most since 2007 - a year before the financial crisis.

The recent global economic downturn and the European debt crisis had prompted investors to avoid riskier investments and opt for high-end office and retail spaces in top cities such as London and New York. But the trend is shifting lately as eurozone breakup fears eased and US economy began to pick up, the report said.

"2012 was a year of profound uncertainty in the global economy which impeded decision making and market activity," Glenn Rufrano, chief executive of Cushman & Wakefield was quoted by Reuters.

"We anticipate there will be less uncertainty this year and in fact, a true change in market confidence and indeed momentum seems to have been confirmed in the early months of 2013 as major global risk factors are seen to be receding".

The report suggests that development in the sector could be led by United States, where demand and debt accessibility could add a 15-20 percent increase in deal volumes.

China's decision to control the property sector to avoid extreme price rise had raised fears on the sector in 2012, when deal volumes rose just 3.7 percent. This could improve in the current year to a 15-20 percent gain as concerns ease and investors look to economies such as India and Indonesia.

But European conditions will continue to remain weak, according to Cushman, with volumes gaining just about 5 percent and being mostly restricted to cities such as London and Munich.

Investment interest from sovereign wealth and pension funds seeking to expand to real estate could be a major source of growth, the report added. State-owned investment funds from countries such as Malaysia and Qatar have been major buyers of top properties in major Western capitals.