Global Commercial Investments Exceeding Forecasts

Global Commercial Investments Exceeding Forecasts

Commercial News » Europe Commercial News Edition | By Francys Vallecillo | October 7, 2013 10:23 AM ET

Global commercial real estate volumes were 16 percent higher during the first three quarters of 2013 compared to the same period last year, as the market continues to surpass expectations. 

Direct commercial global real estate investments reached $125 billion during the third quarter, increasing three percent from the previous quarter and 25 percent from last year, according to Jones Lang LaSalle, which tracks 60 countries and more than 130 global cities. 

Global transaction volumes have been higher than $100 billion for six consecutive quarters, prompting JLL to increase its 2013 projected transaction volumes from $450-$500 billion to $475-$500 billion. 

"Global transactional volumes continue to be positively influenced by investors looking outside their home markets for opportunities," Arthur de Haast, lead director International Capital Group at JLL said in the release. "With the improving levels of risk appetite and a more supportive economic environment, investors are more comfortable looking at opportunities across the spectrum both in terms of location and sectors."

Investors continue to show a strong interest for prime markets in the Americas, EMEA and Asia Pacific. Transaction volumes reached $60 billion in the Americas, increasing 15 percent during the third quarter compared to the second quarter and 35 percent higher than last year. EMEA recorded $42 billion in transaction volumes, up 27 percent from last year. Commercial investments in Asia Pacific reached $23 billion, increasing just one percent during the third quarter compared to last year and dropping 30 percent from the previous quarter, JLL reports. 

A recent report from Cushman & Wakefield showed a 70 percent increase in investment volumes in Central Europe. 

Larger countries like Australia, China, Japan, the U.S., U.K., France and Germany continue to perform well, while activity increasingly spreads from prime cities into regional centers and secondary assets in the larger cities.  

Global monetary sources are expected to boost investment volumes for the remainder of the year.

"With the U.S. 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," David Green-Morgan, global capital markets research director at JLL, said in the release. "This will continue to provide support to transactional volumes, which combined with an increase in institutional allocations to the sector is the reason why we are confident that full year volumes will approach and may even exceed $500 billion."

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