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JLL report indicates "robust" global real estate investment market

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Favourable economic conditions around the world have combined to strengthen the global real estate investment market, according to Jones Lang LaSalle (JLL).

The property investment giant recently released the Q3 2014 edition of its Global Market Perspective report, which analyses the latest movements in real estate markets around the world. The report scrutinises several key property sectors covering both the residential and commercial markets.

As we approach the last quarter of the year, the indications from JLL are largely positive, suggesting it may be an opportune time to be working on your investment appraisals. The global commercial real estate market, for example, is on track to reach its highest number of transactions in seven years.

Looking at the market on the whole, total investment volumes have surged by over a quarter (28 per cent) over the past year. Meanwhile, capital values also inched up 8.8 per cent year-on-year.

Such positive signs are thanks largely to a confluence of factors such as growth in equity and and improvements in debt liquidity, as JLL outlines. 

Regional differences

But which areas around the globe are driving the majority of growth?

According to JLL, the Americas and EMEA showed the strongest increase in volume. For example, the United States was revealed to be the strongest contributor to growth in the first half of 2014. Total transactions in H1 2014 amounted to US$129 billion, almost 50 per cent above the level seen in the same period last year.

The Asia Pacific region displayed contrasting fortunes, failing to build on its momentum from last year. Volumes in the first half of the year were down 8 per cent from those seen in H1 2013. However, with investor interest still strong, JLL expects transaction volumes to recover promptly.

In addition to comparing differences in investment levels around the world, it is also worth looking at how different real estate sectors are faring. So which areas of property investment have been showing the strongest signs of growth over 2014 to date?

Residential

Results were mixed for residential real estate investment in the first half of 2014, with some regions performing better than others. Again, the strongest demand was witnessed in Europe and the Middle East, while investment in Asia Pacific was relatively "subdued".

Thanks to strong international demand, there was plenty of activity in the high-end residential sectors in London and Dubai - investment growth in these regions was recorded at 19 per cent and 35 per cent respectively. JLL warned that the growth seen in Dubai could be "unsustainable" however, given the slight decline in activity in the most recent quarter. 

A range of factors, such as quiet economic growth and restrictive policies, has meant that residential sales were not as strong in Asia Pacific. Shanghai and Manila reported the biggest growth over the past year (both 10 per cent), while Hong Kong also recorded some growth in volumes.

Commercial

A bright outlook is also in store for the office rental market, potentially indicating auspicious times for commercial investors. 

JLL expects leasing volumes for the entirety of 2014 to not be significantly higher than 2013, with a forecast growth of just 5 per cent. However, favourable economic conditions could point to better results in 2015 - for example, office construction is slated to rise, with worldwide office completions next year expected to be 25 per cent higher than in 2014.

Is now the time to jump into the investment market?

With the JLL report indicating a generally positive outlook around the world, investors and developers around the world may certainly fancy their chances in the real estate market.

Thankfully, there is a range of technology and tools professionals can use to make the most of their opportunities. Property valuation software, for example, can give investors the vital insight they need before launching into a transaction.

Date Published: 26 Sep 2014
Category: General News

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