Jul 10, 2012
by Cheryl Tay
There is more positive activity in the global commercial property investment market, based on preliminary data gathered from over 60 countries by Jones Lang LaSalle (JLL) Capital Markets Research.
Data shows that volumes increased 10 percent to US$103 billion (S$130.83 billion) from Q1 2012, as investors evade equities and move towards assets. Investment activity increased all across Asia Pacific, the Middle East, Africa, Europe and the Americas.
But on a year-on-year basis, only the Asia Pacific region showed growth in investment volumes, with a 21 percent increase in Q2 2012.
Additionally, investor sentiment is more optimistic, as reflected by the 50 percent increase in volumes in 1H2012, compared to 1H2010's fragile market.
According to Arthur de Haast, Head of the International Capital Group at JLL, "Clearly we remain in a challenging environment. However, the demand for good quality, well located direct commercial property remains high globally as evidenced by the rising transactional volumes this quarter."
"In the light of ever diminishing yields from other asset classes the potential income returns offered by core, prime commercial property are attractive to many investors," he added.
Over recent years, cash-rich buyers have been the key players in the investment market, especially in core prime locations.
JLL added that institutional, private equity and high net worth buyers will continue to lead purchasing activity "at the expense of distressed vendors and developers in particular."
David Green-Morgan, Global Capital Markets Research Director at JLL, said, "While volumes have improved in the second quarter and the pace of activity is broadly in-line with that of 2011, the investment market globally continues to evolve with new equity rich entrants attracted by the immediate income return as well as the longer term capital growth."
