UK’s real estate market shrinks by $6.2bn

The UK’s real estate investment market has contracted to $714bn (£564bn), while the global market continues to grow. Although the UK’s market reduced by $6.2bn, it held on to third place in analyst MSCI’s annual Real Estate Market Size rankings for 2018, which draw their calculations from 32 countries. Globally, the property investment market was up almost 5% to $8.9tn, compared with the previous year. However, currency fluctuations negatively affected the real estate market during 2018. All countries suffered an adverse impact apart from Japan, contrasting with positive currency trends for nearly all of the countries in 2017. According to the report, foreign exchange movements have effectively decreased the size of the global real estate investment market by around 2.6% in US dollar terms. This compares with growth of 5.3% in 2017. US takes top spot By country, the US retained the top spot at $3.146tn, while Japan maintained second place at $831bn. China reached $540bn, up by $57.6bn, replacing Germany as the fourth-largest market during the year. Germany rounded off the top five, growing its market by $21.1bn to reach $535bn. More transparency Jay McNamara, head of real estate at MSCI, said: “It’s encouraging to see that MSCI’s index coverage has increased in the past year – a signal that the global real estate market is on the right track to become more transparent. This is something which is undoubtedly positive for investors and the industry as a whole.” Will Robson, global head of real estate solutions research at MSCI, said: “This year’s report has highlighted the significant impact currency fluctuations had on global real estate portfolios, as well as the interesting shifts at play in the UK, US and Chinese markets.” To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette