Global real estate investments to hit $500bn
London, February 11, 2013
The direct investment into commercial real estate globally is on a high and the volumes are likely to reach a whopping $500 billion in 2013 from $443 billion in 2012, due to increased levels of demand for real estate coupled with a strategic reallocation towards this asset class by institutional investors, said a new report.
The volumes in the Europe, Middle East and Africa (EMEA) are likely to remain the same in 2013 as those achieved in 2012, according to the latest research from property expert Jones Lang LaSalle (JLL).
The direct investment into commercial real estate in Europe, Middle East and Africa rose three per cent to 123 billion euros ($159 billion) in 2012, boosted by the strongest quarter since 2007, the report added.
Richard Bloxam, the head of European Capital Markets at JLL said: "The strong end to the year illustrates that investors remain attracted to real estate opportunities, especially in the UK, Germany, France and Sweden. Interestingly, there was also a marginal increase in activity in markets such as Ireland and Spain during Q4 2012 which signals increased momentum for 2013."
"While much has been made about the increasingly globalisation of capital flows, the strength of the domestic market should not be overlooked. German, French and UK investors were the largest gross investors in Europe over the last year," he stated.
According to him, the office sector had a stellar year in 2012, with activity increasing 24 per cent year-on-year; almost 60 per cent of office activity in 2012 was within London, Paris and the German Big 5 cities.
"This has helped consolidate London and Paris’ position as two of the top 10 traded cities globally, with London holding onto top spot in 2012. Despite on-going demand for good quality shopping centres as evidenced by several large deals in Q4, retail investment volumes over the full year 2012 were down year on year due to a limited supply of appropriate product," he explained.
Matthew Richards, the head of International Capital Group Europe said there was a 36 per cent increase in net investment into Europe by investors based outside the region compared to the year before.
"The largest growth originated from Asia, where purchases into Europe grew by a staggering 80 per cent year on year," noted Richards.
“We expect Asian offshore buyers to be many of the dominant sources of new capital this year and beyond as domestic regulations now allow investment outside of their domestic real estate market,” he added.-TradeArabia News Service