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Fed tapering remains a dominant theme in global real estate

16 Aug 2013

From Principal Global Investors

Impact of Fed tapering to be felt in real estate market.

While there will be a ‘great rotation’ of capital out of bonds into other asset classes, it is likely that this will be unevenly spread across real estate quadrants, according to the Principal Global Investors US real estate market report for Q2 2013.

The report highlights the upcoming prospect of Fed tapering of quantitative easing and the desynchronization of global economic growth as two dominant themes in the current market. These are positioning the US to assume a leadership role in economic growth and as its economy begins to gain momentum, investors will need to carefully monitor the interplay between shifting capital and space market dynamics as the monetary policy begins to make its presence felt.

Although those real estate quadrants whose trajectory of earnings growth is limited or fixed will be susceptible to downward variances in total return performance, the publicly traded REIT quadrant has the potential to provide leading indicator signals on the evolving interplay of capital and space market forces.

Included in the report is an economic outlook and extensive analyses of the four quadrants of the real estate capital markets.

Tags:Fed tapering global economic growth Principal Global Investors REITs US bonds

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