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Global real estate investment volumes may exceed the $1 tln (€815 bn) mark in 2013 as recovery takes hold, according to Cushman & Wakefield's latest International Investment Atlas.

The report, which was released at MIPIM on Thursday, said global property investment activity rose 6% in 2012 with volumes reaching $929 bn (€714 bn).

After a difficult first nine months, investment volumes rallied in the final quarter of the year, signalling ‘the beginning of real momentum and a return of confidence in the market’, the firm said. This could propel volumes beyond the $1 tln mark (€815 bn) - up 14% on 2012 investment levels - for the first time since 2007.

According to Cushman & Wakefield, the increase in activity this year will be led by North America and Asian markets and driven by increased allocations to property by institutions and high net worth individuals/families plus increased stock on coming to the market.

European investment activity is likely to remain subdued in the short term by the lack of quality product and affordable financing but the signs are that more stock released by the banks, the public sector and corporate owners should produce greater activity in 2013 generating a modest 5% increase.

Europe is the biggest target market for cross-border players, attracting 51% of capital in 2012, up from 45% in 2011. By contrast Asia accounted for 31% of cross-border investment last year and the Americas 18% - down from 20% in 2011.

David Hutchings, head of EMEA research at Cushman & Wakefield, said: ‘There is a growing consensus that we are past the worse for the risk cycle and that 2013 risks are weighted towards the earlier part of the year which if proven true will support a more marked pick-up in confidence and hence activity later this year.’

He added: ‘There will be a very polarised landscape in terms of risk and performance: by country, city and sector, and a key theme of the year will be about finding value in second-tier markets as investor yield demand grows and as cost sensitive occupier interest grows.’

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