JLL report: Global commercial real estate transactions up in Q3 2013


Global commercial real estate markets continue to exceed expectations in 2013 as preliminary transaction volumes in the first three quarters of 2013 were up 16 percent over the same time period in 2012, according to Jones Lang LaSalle Capital Markets research, which spans 60 countries and more than 130 cities worldwide.  Preliminary direct commercial real estate investment volumes in Q3 2013 reached US$125 billion globally, up three percent over Q2 2013 and up 25 percent when compared to Q3 2012.

Global volumes have now been above US$100 billion for six consecutive quarters and this is expected to continue into the traditionally strong fourth quarter.  In light of this positive trend in activity, JLL has updated its 2013 projected transaction volumes to $475-500 billion, from $450-500 billion, with the final outcome likely to be closer to the upper limit.

Arthur de Haast, Lead Director International Capital Group at JLL said, “Global transactional volumes continue to be positively influenced by investors looking outside their home markets for opportunities.  With the improving levels of risk appetite and a more supportive economic environment, investors are more comfortable looking at opportunities across the spectrum both in terms of location and sectors.”

All three regions in the survey are ahead of this time last year with continued strong appetite for prime markets with only Asia Pacific seeing a pullback in Q3.  The Americas saw a 15 percent rise in transaction volumes in Q3 compared to Q2 2013, reaching US$60 billion (up 35 percent year-on-year).  Europe/Middle East/Africa (EMEA) also recorded strong growth reaching US$42 billion, a 27 percent year-on-year increase in volume.  Asia Pacific volumes are up just one percent in Q3 2013 over the same time period in 2012, reaching US$23 billion.  That’s down 30 percent from Q2 to Q3.

Year to date, the bigger countries continue to perform well with Australia (up 13 percent), China (up 10 percent), Japan (up 64 percent), the United States (up 21 percent) the United Kingdom (up 10 percent), France (up 24 percent) and Germany (up 35 percent) but increasingly transactional activity is spreading out from the prime cities, into more regional centres and secondary assets in the larger cities.

David Green-Morgan, Global Capital Markets Research Director at JLL concluded, “With the U.S. Federal Reserve and other central banks around the world content to provide accommodative monetary policy for the next few quarters at least, the prospect of higher funding costs has dissipated.  This will continue to provide support to transactional volumes, which combined with an increase in institutional allocations to the sector is the reason why we are confident that full year volumes will approach and may even exceed US$500 billion.”