Jones Lang LaSalle has said it expects total direct investment in commercial real estate in the UK to total around £22 - £23 bn (EUR 24-25 bn) by the end of 2009. This is comparable with turnover in 2001 and would represent a 10% increase on last year's total of £21 bn.
Jones Lang LaSalle has said it expects total direct investment in commercial real estate in the UK to total around £22 - £23 bn (EUR 24-25 bn) by the end of 2009. This is comparable with turnover in 2001 and would represent a 10% increase on last year's total of £21 bn.
Julian Stocks, head of Capital Markets England, Jones Lang LaSalle said: '2009 has been a year of two halves. The first six months of the year were characterised by low investment volumes, falling prices and worsening occupational markets. However, over the second half of the year investor sentiment dramatically changed and a confidence formed over the summer resulting in demand for stock outstripping supply. This wave of optimism has resulted in higher prices and rising activity.'
The current weight of money and the supply and demand imbalance have resulted in sharp compression of prime yields across the three major sectors. Prime yields in the West End and City office markets have moved in by 50 basis points to 5.00% and 6.25% respectively over the last six months.
Julian Stocks concluded: 'Next year should be a more balanced market and we expect more stock to be released both by the banks and other vendors as the market continues to improve. Retail funds, REITs and private investors will all remain active and we expect turnover to be close to £30 bn.'
