LONDON, Feb 11 (Reuters) - Global investment in commercial property could fall by a milder 5 percent in 2009, after plunging 59 percent last year, Cushman & Wakefield said on Wednesday. Total investment in 2008 fell to $435 billion from the 2007 record of $1,050 billion, setting the lowest annual total since 2004, and is predicted to fall again this year to $412 billion, the property agency said in a report.
North America's commercial property market suffered the steepest fall in investments in 2008 with a 73 percent drop to $116 billion, causing the region to fall behind Europe and Asia as the top global investment destination.
As the world's most popular investment target last year, Europe accounted for 41 percent of all transactions followed by Asia with 30 percent, Cushman said, although investments fell 52 percent in Europe and 45 percent in Asia.
"Although virtually all global markets had a decline in investment it's been the mature markets which have suffered most," said David Hutchings, head of research for Cushman & Wakefield EMEA.
"Emerging markets now account for 22 percent of global investment when as recently as 2006 they only accounted for 9 percent," he said.
At the country level, the United States retained the top spot in 2009 by capturing 25 percent of all global investment, while China came in second with 12 percent of the total, overtaking the UK for the first time, Cushman said.
The UK accounted for 9 per cent or $37.1 billion of investments, while Japan and Germany took about 7 percent each, it said.
"On average, mature markets are now probably at least half way through the pricing correction. Globally, however, it is likely to be those countries which fell first that will also be the first to recover," Hutchings said.
Investment activity is likely to start recovering in the second half of 2009, but a recovery in property yields may wait until mid 2010 when rental levels stabilise, he said. (Reporting by Daryl Loo; Editing by Greg Mahlich) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters)