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Investors eye the Global Commercial property market

A report by JLL shows that the commercial property market across the world continues to stage a recovery this year.

The volume of sales in the first 6 months of this year has increased by 11% in comparison to the first 6 months of last year. The report covers 60 countries and over 130 cities across the globe.

According to the report, the commercial property market recorded direct investment worth US$114 billion dollars in the second quarter of this year. This is an increase of 4% from the second quarter of last year and an increase of 9% from the first quarter of this year. Over the last five quarters, the commercial property market has recorded volume in excess of a $100 billion showing that investors are extremely confident in the sustainability of the sector.

A region wide breakup of the report is as follows. The American region witnessed investments nearing US$52 billion, an 11% increase on a yearly basis. Both the Mexican and Canadian markets almost matched the growth of the market in the US that recorded a 19% growth in the second quarter of this year. With regards to Asia and the EMEA regions, both the regions recorded a growth of 11% and 12% respectively on a yearly basis. However, the quarterly numbers remained the same in the APAC region. In the EMEA region, the quarterly numbers were down by 13% after the region recorded a strong start to the year.

The markets in United Kingdom, France, Germany, Japan and Australia witnessed increase in the transaction volumes in the first half of this year as compared to the first half of last year. China was the only market that recorded a drop in the overall volumes, but is expected to recover in the second half of the year. Investors from the Middle East were very active and continued to invest large amounts around the globe.

Mr. Moussalli, who is the head of the International Capital Group, stated that since the Middle East continues to benefit from a steady income flow due to its oil reserves, Investors from the region are looking at the commercial property market in Europe and America. He says that these investors have the capital to invest in good real estate assets across the world.
As per JLL, 2013 has already recorded an 11% increase in comparison to the same period last year and since the second half always sees much more activity on the investment front, last year’s investment figures will be easily surpassed.
Mr. Haast from JLL said that this level of investment was predicted by JLL. He added that investors are now looking at the global real estate market with two points in mind- diversifying their portfolios and better returns for their investments. Mr. Haast says that they feel investors will continue such a trend in the short run.

Mr. David Green-Morgan from JLL said that investors sees the commercial real estate market as a much more stable investment option. A major reason for such a sentiment is down to the volatile nature of the equity market and the bond market, especially over the last three months. He said that even a rise in the lending volumes in the global property market has not dented the number of sales. As per him, unless there is a significant increase in the debt ratio, there will be no major impact on the sales for this year.

Vietnam real estate market sees strong interest from Asian investors

After injecting billions of dollars abroad, investors from Singapore, China and Hong Kong are shifting their sights to Vietnam after news of its possible recovery spread like a wildfire.

The brighter prospects arose after the local property market increasingly became more open to overseas investment opportunities, which receives general approval from property experts. Vietnam Real Estate Association Deputy General Secretary Tran Ngoc Quang, for one, said that “the Vietnamese market is developing and all market forecasts confirm that this is a market with great potential.”

Also, the government may allow foreign ownership anytime soon as the lawmakers are now carefully considering the proposed law intended to lift the restriction for foreign investors. This has further roused the interest of Asian investors as indicated by the surge of investment in the property sector.

For example, Singaporean firm SLP Group is considering residential, commercial and industrial developments in Vietnam. Such interest is attributed by the firm’s CEO Tricia Teo to the country’s “attractive” housing prices, which are “balanced with investment capital.”

She also added that this particular trait serves as an encouragement for foreign investors to expand operation in the country.

This rings true for China and Hong Kong investors who reportedly upped their investments in the country. Vietnam Briefing reported that Hong Kong-based Sunwah Group spent USD $200 million for an apartment building project in Binh Thanh District, while China’s Textong Group spent USD $215 million to develop infrastructure in Quang Ning province’s 660-hectare Hai Ha Industrial Park.

Investors from South Korea and Japan are also showing strong interest in the Vietnamese real estate industry, according to Neil MacGregor, managing director of Savills Vietnam.

Just recently, the US-based Association of Foreign Investors in Real Estate ranked Vietnam as the fourth emerging market in the world for property investment, which is another indicative of the impending recovery of the property sector.

Majority of Indian buyers rely on Internet search for real estate decisions, new study shows

A new research revealed that majority of real estate buyers in India largely depend on Internet research when it comes to making decisions to enter into property deals.

Search engine giant Google said in a report that over 50% of Indian real estate buyers tend to research online for real estate information before deciding to get into the market and purchase property. In addition, 62% of the respondents cited aggregator sites such as makaan.com and magicbricks.com as their top sources of information.

Besides these sites, about 55% respondents said that websites of real estate companies are also excellent sources of information, while 45% revealed that broker sites, blogs and forums helped them to come up with a sound decision.

“There is tremendous opportunity for both online real estate aggregators, brokers and developers to engage the buyers online by providing rich, meaningful and immersive experience to buyers on the Internet,” said Google India Industry Director Nitin Bawankule.

According to the respondents, who were made up of 6,196 locals across 15 Indian cities, including the metros, Pune, Lucknow and Ahmedabad, the influence of Internet could be attributed to the following features: easy access to in-depth property information and market trends (60%); large comparison options (52%); easy access to contact details of owners and developers (49%); and financing and document processing information (43%).

”This phenomenon of researching online for real estate information before making a decision is not limited to metros but also extended to buyers in tier II cities,” added Bawankule.

The survey, conducted by consultancy firm Zinnov, also showed that the Internet brings in about USD $43 billion worth of overall real estate decisions for residential, commercial and rental property.

While Internet search is the primary tool that real estate buyers are inclined to use, the study reported that mobile devices are also becoming increasingly popular, particularly for those who research for property.

“Mobile queries (those originating from mobile phones) are doubling every year and about 40 percent of total searches came through mobile phones. Also, the study found 73 percent respondents saying they prefer using their mobile apps for researching for property,” Bawankule said.

UK named as world’s most transparent commercial property market

Although rife with talks about the impending bubble burst, the UK is still a best bet given that it has the most transparent commercial property market in the world.

In Jones Lang LaSalle’s (JLL) latest Global Real Estate Transparency report, which covers 102 key markets, the UK commercial property market tops the list as it proves to be at the forefront of “open data” initiatives and enhanced transparency reforms.

According to the report, the key drivers of enhanced transparency are very apparent in the UK market, including the return of stronger economic growth, the rising expectations from the “Millenial” generation and the wider adoption of sustainability tools. In addition, its government is also becoming increasingly aware of the importance of transparency in increasing investment flows and regulating the real estate.

Besides the UK, other countries that rounded out the top five most transparent markets are the United States, Australia, New Zealand and France. In the highly transparent category, countries such as Canada, the Netherlands, Ireland and Finland dominated the list, while the Sub-Saharan countries were hailed as this year’s top improvers, following their initiatives to move transparency into the frontiers of global real estate.

“The top improvers generally correlate with a surge in foreign direct investment and corporate occupier activity, as investors help to accelerate transparency reforms and governments realise that poor transparency will affect continued inward investment, long term growth prospects and the quality of life of citizens,” the report added.

Meanwhile, the report also noted that of the 108 key markets, around 80% showed an improved transparency level since 2012.

Singapore overtakes Hong Kong as the most transparent real estate in Asia

Singapore kept its 13th place finish in the newly released Global Real Estate Transparency Index 2014 published by consultancy firm Jones Lang LaSalle (JLL).

However, Hong Kong slipped to 14th place from 2012’s 11th place, making the tiny city-state the most transparent real estate market in Asia. JLL explains Hong Kong’s downgrade to lower scores caused by cooling measures initiated by the government as well as in accounting standards and corporate government.

It is the second time that Singapore ranked higher than Hong Kong since JLL started to publish the index in 1999. The 2014 study covers 102 markets globally.

JLL said, “All countries in emerging South East Asia have seen some advances (but less significant than 2012 when the sub-region accounted for 3 out of the top 10 global improvers). Greater availability of market data compared to 2012’s improvement, while incremental changes in the regulatory/legal and transaction processes contribute to both the 2012 and 2014 results.”

The 2014 saw the addition of Myanmar, formerly known as Burma, which placed 100th in a field of 102 markets, making it one of the least transparent markets.

JLL said, “Myanmar is more opportunistic currently. Potentially, it would have higher returns. I would even expect double-digit (returns) because of the unpredictability in government regulation.”

Here is the JLL index’s top 20 most transparent real estate markets and their respective scores are:
1. United Kingdom – 1.25
2. United States – 1.34
3. Australia – 1.36
4. New Zealand – 1.44
5. France – 1.52
6. Canada – 1.52
7. The Netherlands – 1.67
8. Ireland – 1.62
9. Finland – 1.69
10. Switzerland – 1.73
11. Sweden – 1.79
12. Germany – 1.79
13. Singapore – 1.81
14. Hong Kong – 1.87
15. Belgium – 1.92
16. Denmark – 1.96
17. Poland – 2.02
18. Spain – 2.05
19. Norway – 2.07
20. South Africa – 2.09