JLL: Global commercial direct real estate investment proves resilient in 2011

Preliminary numbers from Jones Lang LaSalle's upcoming 2011 Global Capital Flows report show there was US $400 billion (approx. €315 billion) of direct investment into commercial real estate in 2011, a 25% increase on 2010.

David Green-Morgan, Global Capital Markets Research Director at Jones Lang LaSalle commented: "Despite the numerous country, regional and global economic headwinds, commercial real estate continued to attract capital from investors who are looking at opportunities not only domestically, but also within their own regions and other regions globally."

In the fourth quarter of 2011 volumes were 3% higher than the third quarter 2011, at US$102 billion. The US $102 billion fourth quarter was only the third time in the last three years that volumes had passed the US $100 billion mark. Compared to Q4 2010 direct investment transactions were down 10% in Q4 2011.

"Debt in all its forms, deleveraging, bank stability and currency movements will continue to dominate the economic outlook in 2012 as they did in 2011," said Arthur de Haast, Head of the International Capital Group at Jones Lang LaSalle.

"Sentiment and economic forecasts in Europe imply that we could be in for a difficult year, although in the Americas in particular confidence does seem to be returning on the back of improving economic indicators, while Asia Pacific looks set to continue on its growth path."

Green-Morgan continued: "In 2011 we recorded a 25% increase in transactional activity with the Americas up almost 60% and EMEA up 16% in US dollar terms. Asia Pacific, despite several natural disasters across the region, maintained similar investment levels in 2011 to the strong performance of 2010."

De Haast concluded: "The on-going deleveraging by the commercial banks will exert positive and negative push and pull factors on the real estate investment market, however, good quality, well-leased commercial buildings in the major cities of the world remain an attractive asset class for many long term investors."

Jones Lang LaSalle believes that volumes in 2012 will match those of 2011, although downside risks from the Eurozone sovereign debt crisis could have a substantial effect on transactional volumes.

Source: Jones Lang LaSalle

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