Global direct investment up 50% to EUR 234b

A strong fourth quarter brought full-year global direct real estate transaction volumes in 2010 to $316 bn (EUR 234 bn), 50% higher than 2009 levels, according to Jones Lang LaSalle. The global property adviser said the increase reflected a significant recovery in investment activity across all three major regions. It expects volumes will increase a further 25% in 2011.

In the Europe, Middle East and Africa (EMEA) region, which recorded the highest overall volumes of the three regions in 2010, full-year volumes reached EUR 102 bn ($136 bn), up by nearly 40%on a year ago in dollar terms. Fourth-quarter volumes hit $49 bn marking the highest level since the first quarter of 2008 ($60 bn) by a significant margin.

Europe's largest markets, the UK, Germany and France made up over half of the region’s direct commercial real estate volumes, confirming the global trend of investor appetite for core product in mature and transparent markets, though there is clear evidence of investors being prepared to look further afield.

'In Europe, the Nordics, CEE countries and Germany have seen the greatest increases in activity over the year,' said Richard Bloxam, director of Jones Lang LaSalle's EMEA Capital Markets group. 'The restricted supply of core assets in Europe's major markets is driving investment demand to other cities and geographies. Additionally we are witnessing an increasing appetite from investors to step into core investments at an earlier stage of development.'

According to JLL's proprietary Global Capital Flows data analysis, after reaching a low of $209 bn for the full year 2009, global direct commercial real estate volumes were bolstered by an active first half of the year in key markets and a general surge in fourth quarter investment activity. In the fourth quarter global investment volumes exceeded $100 bn for the first time since the onset of the global financial crisis in 2007.

'At the beginning of 2010, we predicted total global volumes to land near $300 bn, and the fourth quarter surpassed our estimates,' said Arthur de Haast, head of the firm’s International Capital Group. 'Barring further sovereign debt crises or financial shocks, the momentum of 2010 is expected to continue over the next 12 months and we predict global volumes for 2011 should increase by 20 to 25%.'