Global commercial real estate volumes hit US$94b

SINGAPORE: Preliminary global commercial real estate investment volumes reached US$94 billion (RM285.8 billion) in the first quarter of 2013 (1Q13), indicating continued interest from investors worldwide, according to Jones Lang LaSalle (JLL) capital markets research from 60 countries. This represented an 8% increase over 1Q12.

With the improved results in the quarter under review, JLL maintains its forecast for the year at between US$450 million and US$500 billion, with further growth in quarterly volumes as the year progresses.

“Volumes of almost US$100 billion in 1Q13, in what is historically a quieter period, demonstrate the desire investors continue to have for direct real estate investments. Encouraged by a slowly improving global economic environment and rising property values, especially in core cities, the number of assets for sale continues to increase,” said Arthur de Haast, head of the International Capital Group, JLL, in a statement.

All regions showed increases year-on-year (y-o-y) with the Americas, Europe, Middle East and Africa (EMEA) as well as Asia-Pacific registering increases of 7% to 8% from a year ago. Growth in the Americas was driven by the US and Canada markets, which saw growth of 20% and 6% respectively.  

The combination of a 30% increase in volume in Japan y-o-y and stronger investment volumes in Singapore and Hong Kong has driven Asia-Pacific volume 8% higher from a year ago.

Europe’s three biggest markets, the United Kingdom, France and Germany all contributed to the increase in transactional volumes, with Germany recording investment volumes almost 40% y-o-y. This helped drive the regional performance up by 8% in US dollar terms and 6% in euro terms.

“The improving sentiment across all real estate markets is encouraging buyers to look at opportunities slightly up the risk curve and vendors are cheered by an increasing number of buyers examining assets in more secondary locations. These two factors are helping to drive volumes higher and we expect this to continue for the remainder of 2013,” said David Green-Morgan, Global Capital Markets Research director.

This article first appeared in The Edge Financial Daily, on April 12, 2013.