Skip Ribbon Commands
Skip to main content

News Releases

CHICAGO, LONDON, SINGAPORE

Global Transaction Volumes Hold Up Well in the Third Quarter Despite Sovereign Debt and Economic Growth Concerns

Jones Lang LaSalle’s Third Quarter 2011 Global Capital Flows Analysis Shows a 36 Percent Rise Over 2010


Global direct real estate investment volumes[1] in the third quarter of 2011 totalled US$99 billion, up 36 percent on the same period in 2010, according to figures released today by Jones Lang LaSalle. In the first nine months of 2011, investment activity increased by 43 percent, with total transaction volumes amounting to US$297 billion, compared to US$208 billion in the same period last year.

Regional Spotlight

Despite heightened economic and sovereign debt concerns, European transaction volumes have held up well, with a total of $US41 billion in the third quarter, an increase of 14 percent on the last quarter and a 38 percent rise on the third quarter 2010. The UK, the largest market in Europe, saw a marked improvement in the third quarter 2011, in part due to deal completions delayed from Q2. Germany, France, Scandinavia, Poland and Russia all continue to attract strong investor interest, with “safe haven” status and relative GDP growth considerations prevalent.

In Asia Pacific, transaction volumes amounted to $US20 billion in the third quarter. This represents an eight percent rise on the previous quarter, and a three percent increase on the third quarter 2010. The deal volume for China’s direct commercial property investments rose to approximately $US2.8 billion, up 13 percent  on last year. Japan the largest Asian market, saw volumes rise to over $US4.7 billion, in line with the same quarter in 2010, as the markets recovered following the tsunami and earthquake earlier in the year. 

The Americas saw a slowdown in the third quarter with volumes down 22 percent compared with what was a very strong second quarter. Investment reached $US38 billion, up 60 percent on the same period last year. 

Global Forecast

Arthur de Haast, Head of the International Capital Group at Jones Lang LaSalle said: “Real estate fundamentals remain relatively strong and the asset class has gained favour compared to equities and bonds. However, debt finance is harder to come by than earlier in the year, and the expected growth in interest in secondary product has stalled as investors take refuge in core, well-let product in specific markets. The market remains very much sentiment-driven and the mood is cautious, resulting in delays in closing deals and volatility in transaction volumes quarter-on-quarter.

In the context of the sovereign debt crisis and wider economic growth concerns, we feel that there is a possible downside of up to 10 percent against our original estimated volumes for 2011of $US440 billion.”

- ends –

Notes to Editors

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.
 
 

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

86

378

2009

45

98

66

210

2010

97

138

85

321

Q1-Q3 2011

(prelim.)

118

113

67

297