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News release


Jones Lang LaSalle predicts that global real estate investment volumes will rise by 25-35% in 2011

The final 2010 edition of the firm’s Global Market Perspective Report reveals the top 10 trends in commercial real estate in 2011

SYDNEY, 23 NOVEMBER 2010 – The final 2010 edition of Jones Lang LaSalle’s Global Market Perspective projects that global direct commercial real estate investment volumes will  increase by around 25-35% in 2011, which will see volumes at their highest level since 2008.
The report states that a significant weight of equity capital is targeting real estate across the globe, and further capital-raising is underway; combined with positive investor sentiment and improving market fundamentals, capital allocation is expected to continue to rise during 2011.
Managing Director, Investments and Advisory in Australia for Jones Lang LaSalle, John Talbot, said further capital raising would invigorate the Australian market in 2011, combined with continued repositioning of portfolios which would see further asset sales, predominantly in the secondary market.
“We expect to see A-REITS and other funds to continue to reposition portfolios. Banks are also looking to reduce exposure to direct property investment and this may result in further real estate asset divestment.
“Credit market spreads continue to ease, business confidence is up and leasing enquiry has improved across the office sector.
“We believe that the national vacancy rate has reached the cyclical peak and the forecast is for office vacancy to start trending downwards across most CBD markets. The decline in vacancy should precipitate an increase in rental growth in Sydney and Melbourne over 2011.
“Australia’s labour force is forecast to record an increase in total employment and this should support retail spending and retail turnover over the next 12 months. The local retail sector continues to show its resilience, supported by the strength of the domestic economy. Retail rents are expected to record above CPI rental growth in 2011 and 2012, with the strongest growth in the resource markets of Queensland & Western Australia. 
“The Industrial sector is also expected to record rental growth over the next 12 months supported by growth in the logistics and transport sector.
“The Australian commercial property markets continue to recover. Market fundamentals remain strong and will continue to support the recovery over 2011,” Mr Talbot said.
Jones Lang LaSalle’s Global Market Perspective reveals the top trends for commercial real estate markets across the globe in 2011:

1. Global direct commercial real estate investment volumes will rise by 25-35% on 2010 levels.  A significant weight of equity capital will target real estate and fresh capital-raising will further enliven the market
2. Banks and servicers will adopt a more aggressive approach to the disposal of non-performing assets, leading to the release of more secondary product
3. The CMBS market in the US will continue to gather pace, but will remain well below pre-crisis levels
4. Leasing volumes will be at their highest level since the Global Financial Crisis, with corporate occupiers displaying greater confidence to do deals - but they will continue to push for the best possible terms 
5. Asia Pacific will lead the upswing in leasing markets, ahead of Europe and North America 
6. Prime property will continue to outperform secondary.  Expect double-digit capital value growth for trophy assets in many of the world’s high-order business hubs 
7. Shortages of prime product in Tier I cities will encourage investors to widen their search to Tier II
8. Latin America will continue to build momentum, attracting strong corporate occupier and investor interest
9. A lack of available Grade A stock in many markets will start to limit relocation options for corporate occupiers 
10. The domestic corporate sector will come to the fore in Asia Pacific, particularly in India and China

The Global Market Perspective can be found at: