Brazil leads global commercial growth
Global commercial real estate markets have seen a solid progression as volumes reach US66 billion in the second quarter of 2010 with the strongest growth in Brazil, the latest figures show...
While this level is similar to the first quarter 2010, it nearly doubles the levels of the market bottom of one year ago, according to new research from international property consultants Jones Lang Lasalle.
Its global capital markets research shows that in the first half of 2010 global direct commercial real estate investment volumes totalled US$130 billion. The Americas saw an increase of 54%, EMEA was up 15%, but Asia Pacific dropped 34% quarter on quarter.
‘This is solid progress for commercial real estate investment markets, reflecting the pick up in trading which we have witnessed in certain countries globally. That said, volumes are still well below pre-credit crisis levels and since third quarter 2009 incremental growth has been relatively modest,' said Arthur de Haast, head of the International Capital Group (ICG) at Jones Lang Lasalle.
Looking ahead he said that the firm anticipates volumes globally of around US$300 billion, which represents a healthy 40 to 50% increase on 2009. ‘This is still less than half the pre-credit crisis levels of 2006 and 2007, but we must take into account the fact that those were heady years for commercial real estate investment, with unprecedented record trading volumes,' he added.
Significant regional differences have emerged in the second quarter of the year. Most notably Asia Pacific has seen a 34% quarter on quarter decline in investment volumes to US$15 billion, with sizeable falls registered in Japan, China and Australia, while Hong Kong and Taiwan saw an increase. Compared to the same quarter last year, volumes were up by 21% from US$13 billion during the same period in 2009.
‘In Asia Pacific, the first half of 2010 has posted reasonably strong increases over the corresponding periods of 2009. If this trend continues, aggregate volumes could be around 30% higher this year to reach the mid US$80 billon range,' said Stuart Crow, head of the firm's Asia Capital Markets Group.
In Europe, Middle East and Africa (EMEA) the second quarter has seen a modest 15% increase in volumes on the first quarter to €23 billion, which is up 80% on a year ago. In US dollar terms, volumes totalled US$29 billion, up 5% on the quarter and 70% over 2009.
The UK accounts for over 40% of EMEA volumes, while London maintains its position as the world's most active market with volumes close to US$5 billion, though investors are increasingly focusing on France, Germany, the Nordics and Poland.
In EMEA, Jones Lang Lasalle expects investment volumes will be 35% higher in 2010 compared to 2009, reaching the €100 billion, around US$130 billion, mark by the end of then year.
‘We have seen a strong bounce back in activity and pricing so far this year especially for prime London. However, in the last few weeks I have noticed a slight Change in sentiment and the balance between buyers and sellers has altered. I expect yield movement to be minimal for the next few months and turnover in England to be slightly ahead of 2009,' said Julian Stocks, head of Capital Markets England at Jones Lang Lasalle.
The Americas have seen a sharp uplift in volumes in the second quarter, but from a low base. Volumes have risen by 54% to US$ 21 billion on the first quarter and are more than quadruple the $5 billion level of the same period in 2009. Quarter over quarter growth in Canada and Brazil outstripped the United States.
‘Globally, the strongest growth has been recorded in Brazil, where volumes have tripled on the first quarter to US$1.6 billion and are now at record levels. Canada has also seen strong improvement on the quarter doubling to US$3.5 billion,' said Steve Collins, head of the ICG in the Americas.
He expects total transaction volume in the Americas region for the full year 2010 to increase by at least 80% over 2009 and reach the US$80 to 85 billion range.
Source: www.propertywire.com