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LOS ANGELES-Office investment surged more than 30% globally in 2006 with Asia and Europe leading the way, according to a new report from CB Richard Ellists, its inaugural edition of Global InvestmentView. The surge included a considerable increase in investment across borders “as competition among investors, yield compression, and a limited pool of desirable assets has led investors to broaden their geographic search for opportunities,” the report says.

The publication of the report is in itself a sign of the increased international activity. CBRE says it will publish the new report twice yearly to keep up with the quickening pace of global investment.

Large international investors have long ventured across borders to some extent, but the new activity reflects a trend that has been gaining momentum “over the past five years,” according to Gregory Vorwaller, president of CBRE’s Investment Properties Group. The growing momentum reflects the “abundant institutional and private investor capital” that investors of all stripes have allocated to real estate, Vorwaller says.

The CBRE report shows that six out of 12 major global markets posted more than 30% year-over-year increases in office investment volume at the end of 2006. In terms of US dollars, Beijing recorded $3.7 billion in activity over the previous year’s 2.1 billion and in Singapore, the investment grew to $4.4 billion from $1.9 billion.

London led the European markets with $27.6 billion of investment, with Paris nearly doubling to $21.2 billion. Domestic markets kept pace too, with the New York investment market trading $23.3 billion of office properties in 2006, up 31% from $17.7 billion in 2005.

Middle Easterners were the biggest foreign investors in the US, with more than $5 billion in acquisitions. In 2005, Australians were the largest foreign investors in the US, spending more than $8.5 billion in real estate, and adding another $3.7 billion in investments in 2006.

Global InvestmentView reports on global investment values worldwide, cross-continental investment, and trends in yields and capitalization rates. Among other news in its inaugral edition, the report noted that since 2002, office investment volume has grown by 100% in 10 out of the 12 major global markets.

One result of this increased investment volume is that competiton has significantly increased for core office properties, causing cap rates and yields to fall worldwide. The cap rate in the US rose above 7% in the second quarter of 2006, the first time in nearly four years that it has increased.

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