According to a Jones Lang LaSalle report issued today, a record $900bn (£466m) was invested in global real estate last year
As the global property market prepares to descend on the MIPIM property conference in Cannes, JLL’s report ‘Moving Further and Faster’ said that last year’s investment volumes were up almost 40% from 2005. The lion’s share of global real estate investment continued to target direct commercial real estate with $682bn (£353m) invested in 2006.
Tony Horrell, chief executive officer of Jones Lang LaSalle’s international capital group, said: ‘There is currently a large overhang of investment targeting the sector with $5 of money chasing every $1 of product. These increased flows into real estate gave rise to two notable phenomena in 2006 – an increasing number of ‘mega-deals’, and continued globalisation of the asset class.’
Horrell said cross border transactions account for 42% of the total investment volumes. The largest increase in investment came from global co-mingled funds, which are now involved in deals representing 17% of direct real estate investment globally.
Padraig Brown, global strategy and research director at JLL, said much of the investment was driven by corporate real estate disposals: ‘Corporate occupiers sold over $55bn of real estate assets during 2006 with the large corporate disposals occurring in Japan and Germany.’