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Property market

7

12-month change in total vacancy
(bps)

1.3%

12-month net absorption
(as % of inventory)

1.4%

12-month completions
(as % of inventory)

2.4%

12-month rent growth
(p.s.f.)

Investment market

$66.2

Investment sales
(H1 2018, billions of $US)

10.2%

H1 2018 investment sales growth

4.1%

Average cap rate

-18

12-month change in cap rate
(bps)

  • Demand: Even as deliveries remain high, rents experience slight uptick and vacancy rates hold steady.
  • Transactions: Although quarterly volumes slipped in Q2, transaction activity remains elevated through the first half of 2018.
  • Markets: Secondary and tertiary markets are capturing greater share of investment as cycle progresses.
  • Sources of capital: Private buyers continue to dominate the marketplace; foreign investment concurrently marks uptick.
  • Sources of risk: Investors prioritizing suburban properties as lower yields and supply-side risk in urban submarkets lead to more cautious underwriting.

U.S. Multifamily cap rate map

Multifamily yields continued to compress despite supply-side risk due to elevated deliveries.


Methodology: Cap rates pertain to JLL’s expected average ranges for Class A CBD assets being priced as of Q2 2018.

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