Global real estate investment up in Q2
By Cherry Cao |
00:00 UTC+8 August 14, 2012
|
Print Edition
Print Edition
PURCHASING activity among global real estate investors picked up in the second quarter of this year with total volumes rising 24 percent from the first quarter to US$108 billion, according a report by Jones Lang LaSalle Capital Markets Research, which tracks more than 60 countries and regions.
That compared with a slight dip in activity recorded in the first quarter when volumes reached US$87 billion.
Key regions including the Asia Pacific, Europe, the Middle East and Africa, and the Americas all recorded quarter-on-quarter increases in activity between April and June. The Americas posted a 33 percent increase, or the most significant quarterly gain, to US$47 billion. The Asia Pacific recorded a 19 percent rise to US$26 billion and Europe saw volumes up 17 percent from the first three months to US$35 billion.
"Investment volumes remained resilient. Demand for the best income-generating real estate was robust across the world as sovereign wealth, pension funds and private wealth continued to diversify across investment classes," said Arthur de Haast, head of the International Capital Group at Jones Lang LaSalle.
"Despite European economic headwinds, appetite for real estate continued to be strong. This was mainly due to improving real estate market transparency and falling government bond yields."
Around the globe, the Asia Pacific was the only region to register year-on-year growth, with US$26 billion compared to US$20 billion registered in the second quarter of 2011, reflecting the "shut-down" in Japan last year following the earthquake and tsunami. The Chinese mainland and Hong Kong, Singapore and Australia all recorded increased trading activity.
"Direct commercial real estate transaction volume in the Chinese mainland rebounded as expected during the past quarter with an impressive 55-percent surge," said David Hand, head of China Investment at Jones Lang LaSalle. "We are starting to see a gradually improving investment backdrop as monetary easing efforts start to filter through. Despite uncertainties posed by the external environment, China's domestic situation should turn increasingly constructive for investment as the economy rebounds in the second half of the year."
Only 19 percent of the acquisitions made in the Chinese mainland during the second quarter was completed by owner-occupiers, in contrast to a 60-percent proportion in the first three months, according to Jones Lang LaSalle research.
Global appeal
At the city level, London retained the top spot for most active city in the second quarter of this year, with volumes totaling US$8.7 billion, nearly twice that of Paris and New York, which saw investment of US$4.7 billion and US$4.3 billion, respectively.
"London retains global appeal. Real estate lot sizes are in the right bracket to attract the big ticket money. You also have all the benefits of a strong education system, a central time zone, good transport links and a stable government," said Alastair Meadows, director of International Capital Group Asia Pacific at Jones Lang LaSalle. "If the market picks up in the second half of the year, we will see interest grow in real estate outside of the capital."
Globally, the retail sector increased its investment volumes by two thirds from the previous quarter to US$31 billion, following US$50 billion for offices. In Europe, however, retail investment dropped to US$12.4 billion in the first half after a record US$54.5 billion in the full year 2011, mainly due to lack of deals completed.
The hotels sector, meanwhile, is predicted to have a busy second half as global deals progress and close, while niche assets like data centers will attract more attention as corporates focus on core business activities and look to off-load non-core real estate assets.
"We predict increased activity in the second half of the year as investors continue to move towards real assets as yields from other asset classes remain low," said David Green-Morgan, Global Capital Markets Research director at Jones Lang LaSalle.
"We have seen increased activity from Canadian, US and Middle Eastern money and we can also expect increased activity from capital from Asian countries such as China, Indonesia and Thailand."
In conclusion, Jones Lang LaSalle expects full-year volumes to be broadly consistent with 2011 at US$400 billion, despite the fact that global half-year volumes are slightly below the level of 2011. There has not been a dramatic decline in investor activity or capital raising, although transactions are taking longer to close and debt financing remains an issue, the company said.
That compared with a slight dip in activity recorded in the first quarter when volumes reached US$87 billion.
Key regions including the Asia Pacific, Europe, the Middle East and Africa, and the Americas all recorded quarter-on-quarter increases in activity between April and June. The Americas posted a 33 percent increase, or the most significant quarterly gain, to US$47 billion. The Asia Pacific recorded a 19 percent rise to US$26 billion and Europe saw volumes up 17 percent from the first three months to US$35 billion.
"Investment volumes remained resilient. Demand for the best income-generating real estate was robust across the world as sovereign wealth, pension funds and private wealth continued to diversify across investment classes," said Arthur de Haast, head of the International Capital Group at Jones Lang LaSalle.
"Despite European economic headwinds, appetite for real estate continued to be strong. This was mainly due to improving real estate market transparency and falling government bond yields."
Around the globe, the Asia Pacific was the only region to register year-on-year growth, with US$26 billion compared to US$20 billion registered in the second quarter of 2011, reflecting the "shut-down" in Japan last year following the earthquake and tsunami. The Chinese mainland and Hong Kong, Singapore and Australia all recorded increased trading activity.
"Direct commercial real estate transaction volume in the Chinese mainland rebounded as expected during the past quarter with an impressive 55-percent surge," said David Hand, head of China Investment at Jones Lang LaSalle. "We are starting to see a gradually improving investment backdrop as monetary easing efforts start to filter through. Despite uncertainties posed by the external environment, China's domestic situation should turn increasingly constructive for investment as the economy rebounds in the second half of the year."
Only 19 percent of the acquisitions made in the Chinese mainland during the second quarter was completed by owner-occupiers, in contrast to a 60-percent proportion in the first three months, according to Jones Lang LaSalle research.
Global appeal
At the city level, London retained the top spot for most active city in the second quarter of this year, with volumes totaling US$8.7 billion, nearly twice that of Paris and New York, which saw investment of US$4.7 billion and US$4.3 billion, respectively.
"London retains global appeal. Real estate lot sizes are in the right bracket to attract the big ticket money. You also have all the benefits of a strong education system, a central time zone, good transport links and a stable government," said Alastair Meadows, director of International Capital Group Asia Pacific at Jones Lang LaSalle. "If the market picks up in the second half of the year, we will see interest grow in real estate outside of the capital."
Globally, the retail sector increased its investment volumes by two thirds from the previous quarter to US$31 billion, following US$50 billion for offices. In Europe, however, retail investment dropped to US$12.4 billion in the first half after a record US$54.5 billion in the full year 2011, mainly due to lack of deals completed.
The hotels sector, meanwhile, is predicted to have a busy second half as global deals progress and close, while niche assets like data centers will attract more attention as corporates focus on core business activities and look to off-load non-core real estate assets.
"We predict increased activity in the second half of the year as investors continue to move towards real assets as yields from other asset classes remain low," said David Green-Morgan, Global Capital Markets Research director at Jones Lang LaSalle.
"We have seen increased activity from Canadian, US and Middle Eastern money and we can also expect increased activity from capital from Asian countries such as China, Indonesia and Thailand."
In conclusion, Jones Lang LaSalle expects full-year volumes to be broadly consistent with 2011 at US$400 billion, despite the fact that global half-year volumes are slightly below the level of 2011. There has not been a dramatic decline in investor activity or capital raising, although transactions are taking longer to close and debt financing remains an issue, the company said.
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