Commercial Real Estate Investment Tipped for Growth

Despite the apparent slowdown in momentum at the start of the year, Jones Lang la Salle has issued a report predicting that real estate investment volumes will be as high as last year. According to the firm's second quarter 2012 Global Market Perspective...

Despite the apparent slowdown in momentum at the start of the year, Jones Lang la Salle has issued a report predicting that real estate investment volumes will be as high as last year. According to the firm's second quarter 2012 Global Market Perspective, investment and leasing volumes in the first quarter were 20% lower than the same time last year.

“We believe this is a lagged market response to the escalation of the Euro crisis during the second half of 2011 and, as such, it is likely to be a temporary slowdown. Given the more positive outlook for the global economy, the significant weight of capital targeting commercial real estate and the strong pipeline of deals, we fully expect the global real estate markets to resume their steady, measured recovery during the remainder of 2012,” the report said.

This prediction is the same as the firm was predicting in Q1 which would seem to indicate that the worsening of the European debt crisis is not having a major impact on commercial real estate investment. However, that is hardly surprising given that real estate is considered a safe haven investment during volatile times.

In its Q1 report Arthur de Haast, Head of the International Capital Group forecast that real estate investment will pick up over the year to finish about the same level as 2011 ($400 billion), citing the underlying attractiveness of real estate continues due to strong demand and sound fundamentals.

"Whilst volumes are down in Q1 2012 and the economic backdrop remains uncertain, the underlying attractiveness of real estate continues due to strong demand and sound fundamentals,” he said.

- Tuesday 05 June 2012

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