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News release

LONDON, CHICAGO, SINGAPORE

Investment in Global Commercial Real Estate Markets Continues to Rally, With Strong Growth in First Half of 2013

Jones Lang LaSalle preliminary numbers show direct investment volumes reached US$114 billion in 2Q; 1H 2013 up 11 percent compared to first half of 2012


LONDON, CHICAGO, SINGAPORE,  July 8, 2013 – Global commercial real estate markets continued to rally in 2013 with transaction volumes in the first half of 2013 up 11 percent over 1H 2012, according to Jones Lang LaSalle Capital Markets research, which spans 60 countries and more than 130 cities worldwide. Direct commercial real estate investment volumes in 2Q 2013 reached US$114 billion globally, up four percent over 2Q 2012 and up nine percent over 1Q the first quarter of 2013.

Continued strong growth in 2Q 2013 has kept global volumes above US$100 billion for five consecutive quarters, as evidenced by increasing investor confidence in commercial real estate, despite volatility in equity and bond markets. 


Global transactions volumes are up 11 percent over this time last year and with the second half of the year traditionally busier than the first, the global investment market is on track to surpass last year’s volumes. Jones Lang LaSalle forecasts transaction volume will reach between US$450-500 billion for 2013.

Other highlights include:

  • The Americas saw a 39 percent rise in transaction volumes in 2Q compared to 1Q 2013, reaching US$52 billion (up 11 percent year-on-year); 1H totalled US$90 billion, equating to a nine percent increase over the same time last year. Quarterly volumes in Mexico and Canada rose significantly to keep pace with the continued acceleration in the U.S. market which grew by 19 percent year on year in the second quarter of 2013. 
  • Asia Pacific and EMEA both recorded strong growth over the half year with 11 percent and 12 percent year-on-year increases in volumes respectively. Quarterly volumes in Asia Pacific remained flat both quarter on quarter and year on year, quarterly volumes in EMEA were flat year on year but down 13 percent quarter on quarter following a buoyant start to 2013.
  • The largest markets globally continued to see growth over the first half of the year with Japan (+50 percent), Australia (+10 percent), UK (+4 percent), Germany (+43 percent), France (+6 percent) all recording half year increases compared to 1H 2012. Only China (-20 percent) saw transaction volumes fall in the first half, however a stronger performance is expected in the second half of the year as deals already in progress come to fruition. 

Arthur de Haast, Lead Director, International Capital Group at Jones Lang LaSalle said, “Over the past two to three years, we have predicted that more capital would be allocated to direct investment in core property assets; this is now materializing.  Institutional, private equity and high net worth individual investors are now consistently bidding on opportunities around the world.  In addition to this, investors are starting to diversify their portfolios, both in terms of risk and geography, looking for more value-added and secondary opportunities; a trend we expect to continue over the short to medium term.”

David Green-Morgan, Global Capital Markets Research Director at Jones Lang LaSalle said, “The volatility we have seen in equity and bond markets over the last quarter has further added to the attraction of commercial property as an asset class.  So far, the rising cost of global real estate debt has had little effect on transaction volumes with most deals funded on modest loan to value ratios.  Unless there is a substantial rise in the cost of debt, it is only likely to have a marginal impact on transactional volumes for the remainder of 2013.”
 
What is Global Capital Flows?
Jones Lang LaSalle’s Global Capital Flows analysis provides a set of data designed to help investors understand how commercial real estate capital in the aggregate is moving around the world.  The data does not reflect Jones Lang LaSalle’s own business and is not indicative of Jones Lang LaSalle’s overall performance or the portion of the overall market in which Jones Lang LaSalle participates. The findings are released quarterly, first in the transaction volume analysis represented in this release, and secondly in a broader quarterly report which will be issued in the following weeks. All of the current Global Capital Flows data can be found in an interactive website which also acts as a portal for media and clients to access Jones Lang LaSalle’s global capital markets research. Bookmark this site for the most up to date global real estate data: http://www.joneslanglasallesites.com/gcf 

Jones Lang LaSalle Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether a sale, financing, repositioning, advisory or recapitalization execution. In 2012 alone, Jones Lang LaSalle Capital Markets completed $63 billion in investment sale and debt and equity transactions globally. The firm’s dealmakers completed $60 billion in global investment sales and buy-side transactions, equating to nearly $240 million of investment trades completed every working day around the globe. The firm’s Capital Markets team comprises more than 1,300 specialists, operating all over the globe.

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About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $47.7 billion of real estate assets under management. For further information, visit www.jll.com