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Bangkok

Global Commercial Direct Real Estate Investment Proves Resilient in 2011


Bangkok – Preliminary numbers from Jones Lang LaSalle’s upcoming 2011 Global Capital Flows report show there was US$400 billion of direct investment into commercial real estate in 2011, a 25 percent increase on 2010.
 
David Green-Morgan, Global Capital Markets Research Director at Jones Lang LaSalle commented: “Despite the numerous country, regional and global economic headwinds, commercial real estate continued to attract capital from investors who are looking at opportunities not only domestically, but also within their own regions and other regions globally.”
 
In the fourth quarter of 2011 volumes were 3 percent higher than the third quarter 2011, at US$102 billion.  The US$102 billion fourth quarter was only the third time in the last three years that volumes had passed the US$100 billion mark.  Compared to Q4 2010 direct investment transactions were down 10 percent in Q4 2011.
 
“Debt in all its forms, deleveraging, bank stability and currency movements will continue to dominate the economic outlook in 2012 as they did in 2011,” Arthur de Haast, Head of the International Capital group at Jones Lang LaSalle said, “sentiment and economic forecasts in Europe imply that we could be in for a difficult year, although in the Americas in particular confidence does seem to be returning on the back of improving economic indicators, while Asia Pacific looks set to continue on its growth path.”
 
Mr Green-Morgan continued: “In 2011 we recorded a 25 percent increase in transactional activity with the Americas up almost 60% and EMEA up 16% in US$ terms.  Asia Pacific, despite several natural disasters across the region, maintained similar investment levels in 2011 to the strong performance of 2010.”
 
Mr de Haast concluded: “The on-going deleveraging by the commercial banks will exert positive and negative push and pull factors on the real estate investment market, however, good quality, well-leased commercial buildings in the major cities of the world remain an attractive asset class for many long term investors.”
 
Jones Lang LaSalle believes that volumes in 2012 will match those of 2011, although downside risks from the Eurozone sovereign debt crisis could have a substantial effect on transactional volumes.
 
Table: Global commercial direct real estate investment 2004 – 2011 (US$ billion)
 
Year 
Americas 
EMEA 
Asia Pacific 
Total
2004 
185 
162 
46 
393
2005 
216 
212 
67 
495
2006 
283 
322 
95 
700
2007 
304 
334 
121 
758
2008 
126 
167 
86 
378
2009 
45 
98 
66 
210
2010 
97 
136 
85 
321
2011 (prelim) 
155 
161 
84 
400
 
Jones Lang LaSalle’s Global Capital Flows analysis provides a set of data designed to help investors understand how commercial real estate capital is moving around the world. The findings are released quarterly, first in the transaction volume analysis represented in this release, and secondly in a broader quarterly report which will be issued for the second quarter in the following weeks. All of the current Global Capital Flows data can be found in interactive website which also acts as a portal for media and clients to access Jones Lang LaSalle’s global capital markets research. Bookmark this site for the most up to date global real estate and data at http://www.joneslanglasallesites.com/gcf