Global commercial real estate investment returned from the doldrums in the first half of this year.
Research from Jones Lang LaSalle shows that $132bn of deals were transacted in the first half, which was 74% higher than the $76bn in the first half of 2009. Cross-border activity, which hit a low of 31% of the total volume in the first half of 2009, bounced back to 43% in the first half of this year.
Looking ahead to the rest of the year, Arthur de Haast, head of the international capital group at JLL, said: “Mixed economic news plus longer transaction processes due to investor due diligence may mean that investment volumes do not continue to grow at levels seen in the first half 2010.
“However, full-year volumes will be between $275bn - $300bn, significantly ahead of 2009 ($209bn), with cross-border investors continuing to be very active.”
Europe had the highest volumes of cross-border activity – 54% - in the first half of 2010.
Richard Bloxam, head of pan-EMEA capital markets, said: “After the retrenchment in 2008 and 2009 of many investors to their domestic markets, 2010 has seen a bounce back to pre-crisis proportions of cross-border activity. Total volumes, whilst recovering markedly year on year, remain subdued in comparison to 2007.
“Much inter-regional activity has targeted London and latterly Paris and we are currently witnessing increasing interest in Germany. Intra-regional investment in EMEA has also seen a strong recovery, particularly of the larger lot sizes and shopping centres as institutional demand and available debt continue to return to real estate; particularly for the more prime assets.”
The UK has been the most popular destination for cross-border investment so far in 2010 with $7bn invested, whilst Germany replaced the US as the second most popular destination. Japan, Australia and Sweden feature in the top 10, having not featured in the first half of 2009.
Cross-border investment continues to be dominated by major and mature institutional investors from the world’s most liquid capital sources. Global funds were the largest investor group, followed by German, Singaporean, Dutch, Middle Eastern, British, South Korean, American, Hong Kong and Swedish sources.