Oversea Property News

Investors eye

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.