GLOBAL - Global real estate investment in 2012 will match last year's volumes - but most of it will be directed to prime assets and core markets, according to Jones Lang LaSalle's Q3 Global Market Perspective.
The report showed second-quarter volumes up by 24% from the previous quarter to a "psychologically important" $108bn (€87bn).
It forecast overall global volumes of $400bn for 2012.
However, JLL acknowledged deals were taking longer to close - first-half transactions were down 7% over the same period last year - and said investors would continue to avoid risky assets in favour of prime.
"As the yield gap widens, we expect more investors to start looking at secondary, but debt will be a constraint, especially in Europe," the report said.
However, it also suggested yields in global the secondary market would begin to look attractive for opportunistic investors in the second half of 2012, though with no let-up in demand for prime.
Meanwhile, Aberdeen's Global Property Market Outlook predicted European prices would fall over the next year for secondary property.
Despite value in repriced Southern European markets, where distressed opportunities are beginning to emerge, short-term capital falls indicate investors should avoid the region for the time being, it said.
According to JLL, overall occupier demand is currently hovering 10-15% lower than last year.
Demand growth, such as it has been, has come from emerging markets and niche technology and commodity-driven markets, such as San Francisco and Houston.
In the meantime, a near-absence of speculative development has lowered office vacancy rates to a global average of 13.3%, a three-year low.
Asia posted a year-on-year 30% increase in investor activity compared with last year, boosted in part by Japan's recent natural disasters
However, overseas investment in Asian markets fell by 31%, accounting for only 20% of volumes in the second quarter.
According to JLL, Q2 activity in Japan, China and Australia showed that "domestic investors continue to search out opportunities, particularly in prime locations" - but demand from local investors is effectively keeping cross-border investors out of those markets.