Global direct commercial real estate investment volumes totalled $69 bn (EUR 49.5 bn) in the third quarter of 2010, according to a preliminary figures from Jones Lang LaSalle. This level is similar to the second quarter of 2010 and indicates that the recovery in investment activity seen in the previous four quarters has levelled off.
Global direct commercial real estate investment volumes totalled $69 bn (EUR 49.5 bn) in the third quarter of 2010, according to a preliminary figures from Jones Lang LaSalle. This level is similar to the second quarter of 2010 and indicates that the recovery in investment activity seen in the previous four quarters has levelled off.
Europe, Middle East and Africa (EMEA) turned in a 12% decline in volumes compared to Q2 at EUR 21 bn. However, full-year volumes are expected to be 30% higher than in 2009. A lull during the summer months, a lack of core product and ongoing concerns around sovereign debt in some countries have restrained transaction volumes in the past quarter. In Spain and Italy, volumes are down significantly from second quarter, while in the UK and Germany, the pace of activity has slowed. This is counterbalanced by an increase in investment volumes quarter-on-quarter in France and, more notably, in Sweden.
Richard Bloxam, head of the firm's pan-EMEA Capital Markets team commented: 'Compared with 2009, investor sentiment remains positive across the region. For the full year we expect EMEA investment volumes to be 30% than in 2009. Looking forward, both Germany and the Nordics are likely to see higher volumes, where improving fundamentals and resilient economies are boosting investor confidence.'
Overall, direct commercial real estate investment volumes in the first three quarters of this year have reached $202 bn compared to the $139 bn transacted over the same period in 2009. JLL expects volumes for the full year to reach $280 to $290 bn.
Arthur de Haast, head of the International Capital Group (ICG) at Jones Lang LaSalle commented: 'A significant weight of equity capital is targeting prime assets across all sectors, but a scarcity of prime product for sale is constraining investment volumes. Product shortages are also resulting in yield compression and substantial rises in prime capital values across many of the world’s leading office markets, from London to Washington DC to Shanghai.'
