Foreign Property Investors Committed to the US but London Emerges as Top Spot,

Foreign investors in real estate are committed to the US as their preferred property investment opportunity, it is claimed in a new survey.

The sentiment is underscored by a dramatic increase in the number of respondents identifying the US as best for capital appreciation. Over half, some 51%, said so in the 18th annual survey from the Association of Foreign Investors in Real Estate (AFIRE). This is up from 37% in 2008, 26% in 2007 and 23% in 2006.

The survey of the association's 200 members that own more than $842 billion of real estate globally including $304 billion in the US, also found that the last time respondents' perceptions for US real estate were this strong was in 2003 when the percentage was also 51.

The UK is the second best investment prospect for capital appreciation, receiving 30% of votes, with China in third at 10%.

'Although foreign investors expressed every intent to resume investing in 2009, like everyone else, their plans were sidelined by a paralyzed marketplace with no precedent and limited investment opportunities,' said Werner Sohier, AFIRE chairman.

'However, new money is becoming available and the survey points to an increased focus and interest in a few select markets for 2010, especially London and in the US, where prospects appear to be brightening,' he added.

Investors also said that they plan to increase US allocations above 2009 levels by 62% for equity and 83% for debt and at least half the survey respondents report a stronger appetite for both debt and equity investments in the US than in other countries.

US cities representing the best investment opportunities were named as Washington DC in first place followed by New York, San Francisco, Boston and Los Angeles in fifth place.

The top five emerging markets were named as China, Brazil, India, Mexico, and Turkey. However green attributes are becoming more influential. Some 14% said green issues significantly influence their decision‐making when considering a property while 70% said green attributes were somewhat of an influence. In the 2009 survey, the numbers were 12% and 60% respectively.