Global commercial real-estate markets continue to exceed expectations in 2013 as preliminary transaction volumes in the first three quarters of 2013 are up 16 per cent over the same time period in 2012, according to Jones Lang LaSalle (JLL) Capital Market
Preliminary direct commercial real estate investment volumes in the third quarter 2013 reached US$125 billion globally, up three per cent over the second quarter 2013 and up 25 per cent when compared to the third quarter 2012.
Global volumes have now been above $100 billion for six consecutive quarters and this is expected to continue into the traditionally strong fourth quarter. In light of this positive trend in activity, JLL has updated its 2013 projected transaction volumes to $475 billion to $500 billion, from $450 billion to $500 billion, with the final outcome likely to be closer to the upper limit.
Arthur de Haast, Lead Director International Capital Group at JLL said that global transactional volumes continue to be positively influenced by investors looking outside their home markets for opportunities. With the improving levels of risk appetite and a more supportive economic environment, investors are comfortable looking at opportunities across the spectrum in terms of location and sectors.
All three regions are ahead of this time last year with continued strong appetite for prime markets with only Asia Pacific seeing a pullback in the third quarter of this year. The Americas saw a 15 per cent rise in transaction volumes in the third quarter 2013 compared to the second quarter 2013, reaching US$60 billion (up 35 per cent year on year); EMEA also recorded strong growth reaching $42 billion, a 27 per cent year-on-year increase in volume. Asia Pacific volumes are up just one per cent in the third quarter 2013 over the same time period in 2012, reaching $23 billion. That’s down 30 per cent from the second quarter 2013 to the third quarter 2013.
Year to date, the bigger countries continue to perform well with Australia (up 13 per cent), China (up 10 per cent), Japan (up 64 per cent), the United States (up 21 per cent) the United Kingdom (up 10 per cent), France (up 24 per cent) and Germany (up 35 per cent) but increasingly transactional activity is spreading out from the prime cities, into more regional centres and secondary assets in the larger cities.
David Green-Morgan, Global Capital Markets Research Director at JLL concluded that with the US Federal Reserve and other central banks around the world content to provide accommodative monetary policy for the next few quarters at least, the prospect of higher funding costs has dissipated. This will continue to provide support to transactional volumes. Full year volumes will approach and may even exceed $500 billion, he said.
The preliminary global capital flows volume will be featured prominently on JLL’s global edition of The Investor, an online and mobile app news source providing real-time commercial real estate news to asset buyers and sellers around the world.