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News Release

Chicago, London & Singapore

Global Cross-Border Commercial Real Estate Investment Recovers

Global Capital Flows Picks up in Retail, Hotel and Industrial Sectors as Investors Diversify Investments

Chicago, London & Singapore 14 SEPTEMBER 2010 – The near doubling of global commercial real estate transactions in the first half of 2010 compared to the same period a year ago was underpinned by a return to pre-crisis levels of cross-border investment, according to new research from Jones Lang LaSalle.  Total global commercial real estate investment totaled US$132bn for the first half of 2010, compared to US$76bn in H1 2009 , and after reaching a low of 31% of total volumes in the first half of 2009, cross-border  activity is now back above 40% (43%), a trend set to continue for the remainder of 2010.  This reflects a general market pick-up as confidence improved, a return to the globalisation of real estate investment and a search for value by investors. 

Looking ahead to the rest of the year, Arthur de Haast, Head of the International Capital Group at Jones Lang LaSalle, commented: “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 US$275 - 300bn for 2010, significantly ahead of 2009 (US$209bn), with cross-border investors continuing to be very active.”

Regional trends

Europe had the highest volumes of cross-border activity in the first half of 2010 (over 54% of European transactions were cross-border, of that 24% was inter-regional).  The Americas transactions, historically driven by strong domestic investors, recorded the highest proportion of inter-regional investment of all three regions (over 35% of all the Americas transactions were inter-regional).  Asia Pacific transaction volumes were up 40% in the first half of 2010 compared to the first half of 2009; 69% of transactions in Asia Pacific were domestic and, of the 31% cross-border transactions, 15% were inter-regional.

Richard Bloxam, Head of Pan-EMEA Capital Markets at Jones Lang LaSalle, commented: “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."

Alistair Meadows, director of the International Capital Group for Asia Pacific said, “The return to pre-crisis levels of cross-border investment has also signaled increased activity from Asian buyers in major international markets including the commercial and residential sectors in London.  Cross-border capital from both institutional and private Asian investors in Malaysia, Singapore, Hong Kong and Korea (the 4th most active globally in 1H 2010), will continue to make a major impact on tier one global markets.”

Destination of Cross-Border Investment

The UK has been the most popular destination for cross-border investment so far in 2010 with $7bn invested, whilst Germany replaces the US as the second most popular destination.  The US was in third place (from second in H1 09) despite a doubling in transactions in the US market from $2.2bn to $4.3bn.  Japan, Australia and Sweden feature in the top 10 for H1 2010’s most popular destinations for cross-border investment, having not featured in H1 2009.

Cross-border Investors

In the first half of 2010, cross-border investment continues to be dominated by major and mature institutional investors from the world’s most liquid capital sources; global funds (which raise capital in multiple regions) were the largest investor group, followed by German, Singaporean, Dutch, Middle Eastern, British, South Korean, American, Hong Kong and Swedish sources.

Inter-Regional Investors

Global Funds (which raise capital in multiple regions) were the most active inter-regional purchasers in H1 2010 and doubled the amount they invested compared to H1 2009.  Middle Eastern investors remained the second largest inter-regional purchasers also more than doubling their investments in H1 2010 compared to the same period in 2009.  US investors increased their inter-regional investments by 48% year on year and South Korean investors were fourth most active inter regionally in H1 2010 with US$0.8bn having not featured in the top 10 Inter-regional purchaser list in 2009.

"The rise in cross border transaction volume also shows a real estate return in the major markets, and an encouraging 176% increase year over year in the United States, which held the greatest fall in cross border investment during the down turn,” added Steve Collins, managing director, Americas, International Capital Group. “Investors have started to move back into the United States with major purchases thus far in 2010.  However, investor appetite has led to a differentiated landscape where demand is especially robust for well-leased, core-style product in gateway markets such as New York and Washington, DC; whereas demand remains much weaker for the non-gateway cities markets.”

German investors on the other hand have been less active on the inter-regional front, with volumes falling from $1.1bn in H1 2009 to $0.5bn in H1 2010; this in part reflects a more conservative approach whilst German Fund legislation is under review. 


Although the office sector remains dominant, it represented less than half (48%) of global transaction volumes in H1 2010 (compared to 53% in H1 2009) as retail, hotel and industrial activity picked up with investors diversifying their investments.