According to the latest data from Jones Lang La Salle, global investment volumes have remained robust despite registering a slight year over year decline in Q3 2012.
According to the report investors transacted $96 billion during the quarter across the 60 markets monitored by JLLS capital markets. While this is slightly less than the US $106 billion (approx. €81 billion) total recorded in Q2 2012, transaction levels have held up in the summer months of Q3. This is due to strong performance in established major markets in all three regions, such as the United States, UK, Germany and Australia.
Arthur de Haast, Head of the International Capital Group at Jones Lang La Salle explained that volumes are being held up by strong demand across the sectors in major global markets, which are making up for weaker sentiment overall.
"Investors have been placing capital in the major cities in these safer markets," he said. "These larger markets have more liquidity and lower risks and whilst returns might not be as attractive as emerging markets such as Brazil, India and China, these economies have slowed and market transparency is lower."
Meanwhile David Green-Morgan, Global Capital Markets Research Director for the firm pointed to increasing availability of financing as shoring up the outlook for the rest of 2012, he said
"Financing for real estate transactions shows signs of improving in the US with CMBS issuance set to surpass the levels seen in 2011 and debt levels are steadily coming down, demonstrating that refinancing activity is taking place. Government quantitative easing and central bank policy activity has also improved global liquidity and confidence."
Arthur de Haast added: "Q4 is historically the busiest quarter of the year and that will be no different this year for real estate transactions. Whilst global investors might be watching the upcoming US presidential elections with interest, we expect this to have limited impact on activity as proved the case with the recent London Olympics.
"Looking further forward we expect volumes to increase in 2013 and one trend to watch is the continued activity in alternative sectors, where our teams are currently extremely busy."
- Tuesday 16 October 2012