Global property investment up 7%

Global direct property investment volumes in the second quarter totalled more than US$101 billion, an increase of seven percent from Q1 2011 and a whopping 47 percent from Q2 2010, according to latest research conducted by Jones Lang LaSalle (JLL).

“The upswing in activity continues, with exceptional gains in North America, which was late to the recovery, driving that region to the top spot in terms of volumes,” said Arthur de Haast, Head of the International Capital Group at JLL.

“Looking ahead, debt concerns in some advanced economies and the risk of overheating in some emerging markets will induce caution and careful asset selection, adding to a natural deceleration in the recovery. Nevertheless, the pipeline of product in the market gives us confidence that full-year volumes will reach our forecast of US$440 billion.”

The highest property investment volumes came from the US, while volumes for the region rose 56 percent from Q1 2011 to US$49 billion.

Meanwhile, the investment volumes in Europe, the Middle East and Asia (EMEA) region, largely stood still in Q2 2011 at US$34 billion.

Asia Pacific saw a 30 percent decline in investment volumes compared with the last quarter but still a decent increase year-on-year to US$18.5 billion. The massive natural disasters in Japan, the region’s largest real estate investment market, worsened a normal seasonal slowdown.

“Our forecast calls for a further US$240 billion to transact in the second half. There are several supportive factors to note: Japan will rebound from March’s natural disasters; there is additional bank product coming up for sale in Europe and the United States, some of it very good quality; and the large emerging markets appear to be absorbing the impact of regulatory measures without a ‘hard landing’,” said Paul Guest, JLL’s Global Capital Markets Research Director.

“Nonetheless, the rate of growth has started to decelerate and this will continue, particularly as central banks continue to tighten around the world.”

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