Cross-border deals make up half of global Q2 volume: JLL

Cross-border transactions rose 50% to comprise half of the EUR 72 bn of direct commercial real estate investment completed in the second quarter of 2011, according to Jones Lang LaSalle.

JLL's latest Global Capital Flows report indicates that global, US and Singaporean investors were the most active cross-border sources of capital.

The property adviser expects global volumes to reach its full-year forecast of EUR 306 bn given the strong start to the year - but only so long as the current market volatility and uncertainty abates, 'and there are no further significant economic setbacks'.

JLL stressed that good quality commercial proeprty will benefit in a period of instability. However deals, and big ticket ones in particular, will take longer to complete.

In net investment terms , global funds were by far the most active investors in Q2 with net purchases of more than EUR 9 bn. Singapore was the next most active with EUR 1.5 bn and Sweden third with EUR 556 mln of activity.

Alongside the global funds, which by their nature led net cross-border activity, Singapore was the second most active net cross-border purchaser in Q2 2011. Kazakhstan and Indonesia both accounted for around EUR 382 mln of net purchases in the quarter; the latter was almost exclusively made up by the purchase of Aviva Tower in London.

The US was once again the greatest source of capital purchasing EUR 19 bn direct commercial real estate, up EUR 5 bn from first quarter, but the increased volume was mainly spent domestically. The US was also the third most active cross-border purchaser at EUR 1.8 bn.

In addition to surging US capital, the second quarter saw a doubling of acquisitions by the global funds to EUR 14 bn and significant jumps in British, Canadian and German-sourced capital. Most of the new capital was also spent domestically in these three countries.