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Jones Lang LaSalle’s iDesk Outlook defines where U.S. industries are growing and which industries are moving operations back home in 2011
WASHINGTON, D.C., Jan. 25, 2011 -- With the global economy in recovery, many U.S. corporations are back in expansion mode and seeking the most attractive and accretive real estate locations across the globe. While the BRIC countries (Brazil, Russia, India and China) are still an expansion priority for Corporate America, Germany is gaining ground fast. According to Jones Lang LaSalle’s International Desk (iDesk) Outlook, some companies also are onshoring, bringing operations back to the United States.
Jones Lang LaSalle’s iDesk Outlook provides a first-hand perspective on the migration patterns of U.S. companies in 2010 and 2011. It stems from proprietary market intelligence gathered via research and hundreds of direct client conversations. The following report highlights 2010 corporate expansion trends, predicts which countries and industries will see growth from U.S. companies in 2011, and explains why some U.S. companies are onshoring and foreign investment is headed into the United States.
Germany on the BRIC bandwagon– A Look Back at 2010According to Jones Lang LaSalle iDesk’s Outlook report, India remained the first choice for corporate expansion in 2010 given it has the highest levels of information technology (IT) expertise, followed by China, Brazil and Russia. But there is another key player emerging from the European field – Germany.
“While India was still the top choice for outsourcing in 2010, China, Russia, Brazil and Germany have become best bets for corporate expansion,” said Thierry Delvaux, Managing Director at the iDesk. “These five countries represent a market equal to almost half of the population of the entire world, and U.S. corporations are driving investment into real estate locations where there is a large population and strong GDP growth prospects.”
Many factors signal real estate investment in foreign locations:
What To Expect in 2011?Despite tightening real estate conditions, and operational and transparency issues, Corporate America will continue its foray into BRIC countries, and Germany, for many years to come. In most markets, 2011 will remain tenant-friendly but prime real estate may be scarce. However, landlords will reclaim the balance of power over the next 12 months.
The property clock above shows that most of the markets are now between the 4 o’clock and the 8 o’clock segment, meaning that rents have started to accelerate or will very soon. This is mainly the result of a large demand for commercial space in those markets.
The markets where Jones Lang LaSalle’s iDesk expects to see the most growth in 2011 include:
U.S. industries that are expected to grow and have increased real estate needs overseas in the coming year include:
Onshoring and Foreign Investment – A 2011 Trend“You may also see U.S. companies bringing operations back to the United States as well as foreign companies expanding in various U.S. markets,” added Delvaux. “For instance, a joint venture with two large German companies is planning to develop the world’s largest solar-thermal power plant in Southern California. French companies, such as EDF and Alstom Power, have also shown major interest in building reactors in the United States.”
In addition to foreign energy companies looking to expand operations in U.S. markets, the iDesk Outlook Report notes that technology firms in India and European defense contracting companies will be looking to expand in the United States.
A few U.S. companies doing business in China are onshoring – moving some operations back to the U.S. in reaction to the rising wages of Chinese workers, the weakening of the dollar against the Yuan and an increase in shipping rates from China. According to the Wall Street Journal, Caterpillar Inc. is considering relocating some heavy-equipment overseas production to a new U.S. plant. The Milwaukee Journal-Sentinel reports that General Electric Co. is preparing to move water-heater production from China to Louisville, KY, and Wham-O Inc. is shifting a share of its Frisbee and Hula Hoop production back to the United States.
About Jones Lang LaSalle’s iDeskJones Lang LaSalle’s iDesk assists corporations with key transactions and client relationship management required to operate in international markets. The team works to target and accelerate the growth of inter-regional business, particularly from current and prospective US-based multinational clients. The iDesk team is comprised of real estate experts whose diverse backgrounds, linguistic skills and geographic experiences enable successful service delivery across all international markets.
About Jones Lang LaSalleJones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of more than $2.9 billion, Jones Lang LaSalle serves clients in 60 countries from 750 locations worldwide, including 180 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.7 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with more than $41 billion of assets under management. For further information, please visit our website, www.joneslanglasalle.com.
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