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News Release

Chicago, IL

Global Direct Real Estate Investment Volumes Rise Nearly 50 Percent to $101 Billion in Second Quarter 2011

North America rises to the top spot in transaction volumes as activity catches up to early movers


CHICAGO, LONDON, SINGAPORE,  July 12, 2011 —  Global direct real estate investment volumes[1] in the second quarter of 2011 totaled more than US$101 billion, up seven percent from the previous three months and a staggering 47 percent from the second quarter 2010, according to preliminary research findings from Jones Lang LaSalle’s global capital markets experts.

Arthur de Haast, Head of the International Capital Group at Jones Lang LaSalle said: “The upswing in activity continues, with exceptional gains in North America, which was late to the recovery, driving that region to the top spot in terms of volumes. Looking ahead, debt concerns in some advanced economies and the risk of overheating in some emerging markets will induce caution and careful asset selection, adding to a natural deceleration in the recovery.
 
Nevertheless, the pipeline of product in the market gives us confidence that full-year volumes will reach our forecast of US$440 billion.”

Regional highlights
The Americas experienced the most property trading activity since late 2007, moving to the top spot as activity catches up to the early movers in other regions.  All property sectors in the United States experienced strong growth given the increased debt availability and a hunger among investors for yield options in the very low interest rate environment. 
 
Volumes for the region rose 56 percent from the first quarter of 2011 to US$49 billion.  Canada also saw a sharp bounce, with activity more than tripling from first quarter 2011.  South of the border, Brazil slowed from the heated pace of the prior two quarters as several very large portfolio sales were digested. The volume of investment flows in the Americas should remain strong throughout the year, though at a slower pace of growth than previously witnessed.

Meanwhile, in Europe, the Middle East and Asia (EMEA), investment volumes broadly stood still in the second quarter at US$34 billion, while registering moderate growth compared to the same period of 2010. A strong upswing in the Nordics and in Russia was offset by a modest cooling off in the UK and a bigger slowdown amidst the troubled southern periphery, with the notable exception of Italy, which experienced a slightly smaller dip. In the Middle East, activity remains muted – at present, it is more notable as a source of capital.

Finally, in Asia Pacific there was a sizable fall (30 percent) in volumes compared to the previous quarter, but still a decent gain year-on-year to US$18.5 billion. The natural disasters in Japan, the region’s largest property investment market, aggravated a normal seasonal slowdown. It is not surprising that healthy markets elsewhere in the region, including strong growth in Australia and steady levels of activity in China and Hong Kong, failed to make up the shortfall.

Global forecast
Looking ahead to the remainder of the year, Jones Lang LaSalle’s Global Capital Markets Research Director Paul Guest said, “Our forecast calls for a further US$240 billion to transact in the second half. There are several supportive factors to note: Japan will rebound from March’s natural disasters; there is additional bank product coming up for sale in Europe and the United States, some of it very good quality; and the large emerging markets appear to be absorbing the impact of regulatory measures without a ‘hard landing’. Nonetheless, the rate of growth has started to decelerate and this will continue, particularly as central banks continue to tighten around the world.”

Notes to reporters and editors: bookmark our global data repository
 
Jones Lang LaSalle’s Global Capital Flows analysis provides a set of data designed to help investors understand how commercial real estate capital is moving around the world. The findings are released quarterly, first in the transaction volume analysis represented in this release, and secondly in a broader quarterly report which will be issued for the second quarter in the following weeks.
 
All of the current Global Capital Flows data can be found in interactive website which also acts as a portal for media and clients to access Jones Lang LaSalle’s global capital markets research. Bookmark this site for the most up to date global real estate and data at http://www.joneslanglasallesites.com/gcf
  1. Intra-regional: Both purchaser and vendor originate from the region where the asset is located.  For instance, a US REIT purchasing in Canada, or a German Open Ended Fund selling in the UK.
  2. Inter-regional: Purchaser, vendor or both originate from outside the region where the asset is located. For instance, a US REIT purchasing in Denmark, or an Australian Pension Fund selling in Canada.
  3. Cross-border: Refers to any purchaser, vendor or both that originates from outside the country in which the relevant transaction occurs. Categorised into Inter-regional and Intra-regional transactions.
  4. Domestic: Refers to any investor that originates from within the country in which the relevant transaction occurs. Transactions involving both “domestic” purchaser and seller are referred to as “domestic” activity.
  5. Entity-level transactions, development projects and multi-family residential investment are excluded from our provisional data and may change.
  6. Jones Lang LaSalle converts transaction values into USD at the average daily rate for the quarter in which the transaction occurred. In other words, the foreign exchange effect has not been removed.
  7. Global Funds are funds which raise capital in multiple regions.

Historic Global Direct Commercial Real Estate Volumes, US$ billion
 

Year
Americas
EMEA
Asia Pacific
Total
2004
185
162
46
393
2005
216
212
67
495
2006
283
322
95
700
2007
304
333
121
759
2008
126
167
85
378
2009
45
98
66
209
2010
97
136
83
316
2011 H1 (prelim)
80
70
46
196

    
 
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of more than $2.9 billion, Jones Lang LaSalle serves clients in 60 countries from more than 1,000 locations worldwide, including 185 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.8 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with more than $43 billion of assets under management. For further information, please visit our website, www.joneslanglasalle.com.