Commercial real estate sees strong investment in 2013

Investment in the global commercial real estate sector has had a promising start to 2013, with transaction volumes up 11% on the same period last year, according to the latest figures.

Jones Lang LaSalle found in its capital markets research that strong performance in the second quarter - which saw volumes reach $114bn (€88.7bn) across the world - ensured sales remained above $100bn for the fifth quarter in a row.

The confidence of investors when it comes to commercial real estate is particularly important when considering the volatility of other markets, such as equity and bonds.

The world’s largest markets have experienced growth in the first half of the year, with only China seeing a contraction (-20%). However, the Far East giant is due to have a much stronger performance in the latter half of the year when some of its bigger deals in progress are completed.

Japan and Germany were standout performers, undergoing 50% and 43% growth respectively, while Australia (+10%), France (+6%) and the UK (+4%) all saw a rise in sale volumes.

Overall, EMEA has seen the largest growth, with year-on-year volumes rising 12%, while Asia Pacific rose 11% and the Americas experienced a 9% lift.

“The volatility we have seen in equity and bond markets over the last quarter has further added to the attraction of commercial property as an asset class,” said David Green-Morgan, Global Capital Markets Research Director at Jones Lang LaSalle.

“So far, the rising cost of global real estate debt has had little effect on transaction volumes with most deals funded on modest loan-to-value ratios. Unless there is a substantial rise in the cost of debt, it is only likely to have a marginal impact on transactional volumes for the remainder of 2013.”s

The real estate firm forecasts that sales in 2013 will reach $450-500bn, which remains in line with previous expectations. The latter half of the year typically sees a larger volume of sales and this will help to push the global investment market beyond 2012’s figures.

The global commercial real estate market is an effective sector in which to invest capital. At TMF Group we combine our extensive global resources with our unrivalled knowledge of local regulations, cultures and languages to help you achieve your investment goals, which allows you to concentrate on your core duties.

 
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