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Property market

-10

12-month change in total vacancy
(bps)

0.9%

​​12-month net absorption
(as % of inventory)

1.4%

12-month completions
(as % of inventory)

2.3%

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

Investment market

$54.4

Investment sales
(H1 2018, billions of $US)

-12.9%

YTD investment sales growth

4.4%

Average cap rate

-10

12-month change in cap rate
(bps)

  • Demand: Growing competition among landlords for tenants and steadily rising vacancy are compressing effective rents.
  • Transactions:Despite soft first half of 2018, resurgence of large, single-asset transactions expected to drive uptick in the second half.
  • Markets: Primary markets see more momentum, yet barriers to investment remain.
  • Sources of capital: Foreign demand for office product remains healthy, but has tapered off modestly.
  • Sources of risk: Although improving somewhat in the second quarter, net absorption is expected to be one-third lower at year-end 2018 than in 2017.

U.S. Office cap rate map


The extended period of compressed pricing is leading investors to continue to seek alternative ways to source yield.


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

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