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Cross-Border Transactions Rise 50 Percent to Half of Total Global Direct Real Estate Investment Volumes in Second Quarter 2011

Global, US and Singaporean investors emerge as the most active cross-border sources of capital

Cross-border transactions rose 50 percent to comprise half of the $103.5 billion[1] of direct commercial real estate investment transactions completed in the second quarter of 2011, according to Jones Lang LaSalle’s new Global Capital Flows report. Given the strong start to the year, Jones Lang LaSalle still expects market volumes to reach its full year forecast of $440 billion, so long as current market volatility and uncertainty abates and there are no further significant economic setbacks.  In an era of instability, good quality commercial property will benefit, but deals, particularly larger ones, will take longer to complete.

“In the first half of this year, we saw firms investing domestically and the private equity and unlisted funds investing across borders,” said Arthur de Haast, Head of the International Capital Group at Jones Lang LaSalle. “Funds are being more cautious with a focus on investing primarily at home and trusting experienced managers with their cross border investments. This trend should continue through the second half of the year if the economic environment remains uncertain.”
In net investment terms[2], global funds[3] were by far the most active investors with net purchases of more than $13 billion. Singapore was the next most active with $2.1 billion and Sweden third with $800 million of activity.
Alongside the global funds, which by their nature led net cross-border activity, Singapore was the second most active net cross-border purchaser in Q2 2011 as investors looked abroad for returns due to the capital appreciation occurring domestically.  Kazakhstan and Indonesia both accounted for around $550 million of net purchases in the quarter; the latter was almost exclusively made up by the purchase of Aviva Tower in London.
The top ten markets globally which attracted the most investment included four markets in Asia (Hong Kong, Seoul, Shanghai and Singapore); three in the Americas (New York and Washington, D.C. and Toronto) and three in EMEA (London, Frankfurt and Paris).
Top 10 Cities in Q2 2011 – investment volumes (excluding portfolios) in USD (bn) 
  1. New York City - 6.3
  2. London - 6.0
  3. Toronto - 2.7
  4. Hong Kong - 2.4
  5. Singapore - 2.2
  6. Seoul - 2.0
  7. Washington DC - 1.8
  8. Shanghai - 1.8
  9. Frankfurt - 1.7
  10. Paris - 1.6

De Haast added: “Risk aversion has risen over the past few months, meaning large deals are taking longer to close. While we’re seeing more transaction flow, in the second quarter there was a notable absence of big ticket, single asset transactions.  There were fewer than ten $500 million-plus single asset sales this quarter which is roughly the same number as the second quarter of 2010. There were over 20 big deals in the first quarter and while a significant number of large transactions are in the pipeline for H2, the volatility of markets could cause further delay.”

Sources of Capital

Capital around the globe is targeting both domestic and foreign investments. This quarter, the United States was once again the greatest source of capital purchasing $27.1 billion in direct commercial real estate, up $7 billion from first quarter, but the increased volume was mainly spent domestically. The United States was also the third most active cross-border purchaser at $2.6 billion. The booming U.S. investment activity is largely home-grown with more than 110 US cities appearing in the firm’s database in the second quarter versus less than 90 in first quarter and just 60 in the second quarter of 2010.

TOP 10 US CITIES in Q2 2011 (excluding portfolio transactions) – new entrants compared to Q1 2011 highlighted in bold

  1. New York City - 6.3
  2. Washington DC - 1.8
  3. Los Angeles - 1.5
  4. San Diego - 1.4
  5. Chicago - 1.3
  6. San Francisco - 0.9
  7. Seattle - 0.9
  8. Boston - 0.7
  9. Houston - 0.7
  10. Miami - 0.7

In addition to surging U.S. capital, the second quarter saw a doubling of acquisitions by the global funds to $20.6 billion and significant jumps in British, Canadian and German-sourced capital. Interestingly in these three countries most of the new capital was also spent domestically.

In the second quarter there was a total of $38 billion in cross-border purchases, up from $22.9 billion in the first quarter representing a 66 percent increase. This was driven by a doubling of foreign-bound Singaporean capital, led by several major acquisitions in China, and by a huge surge by the global funds. Purchase levels by the other top cross-border investors (the US, Germany, Canada and the UK) were broadly unchanged.

Preferred Sectors

The office sector was dominant in the second quarter, accounting for just over 40 percent of total volumes, down from 45 percent in the first quarter 2011. Retail’s share rose to 33 percent from 28.5 percent. The upsurge in hotels volumes (including casinos) led that sector to overtake industrial as the third most liquid sector globally with a share of eleven percent.  Industrial meanwhile accounted for ten percent.

Notes to 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 final Global Capital Flows report data can now 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

  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

Asia Pacific
















2011 1H





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 USD 2.9 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 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 USD 45.3 billion of assets under management.

Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 19,700 employees operating in 78 offices in 13 countries across the region. The firm was named the Best Property Consultancy in Asia Pacific at 'The Asia Pacific Property Awards 2011 in association with Bloomberg Television'. For further information, please visit our website,

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[1] All currency figures in this report are US dollars, unless otherwise noted. These are converted from local currencies using a quarterly average rate.

[2] Net investment measures the total amount of acquisitions a region made minus disposals.

[3] Groups that raise capital globally from multiple regions, and less than 70% of the capital is from a particular country.