Global real estate transaction volumes declined by 13% year-on-year to $187 bn in the first quarter of 2021, according to a new research report by JLL.
The first quarter volumes were bolstered by stronger performance in more mature and liquid markets, including the US, UK, France and Japan.
Throughout the first quarter, appetite for higher-quality core and core-plus product persisted. In tandem, demand increased for opportunistic plays in competitive segments of the market. Logistics and multifamily investments represented 63% of all opportunistic transactions in the first quarter (up from 44% in Q1 2020).
For Europe, Q1 2021 posted the strongest first quarter on record for industrial and logistics investment with nearly €10 bn transacted, which is more than 40% higher than the Q1 five-year average (2016-2020).
‘While the overall global investment market remained resilient, its recovery is proving to be uneven across geographies and sectors. We continue to see improving economic conditions, continued government stimulus and increasing inoculation rates as providing reasons for optimism and avenues for market improvement, but we do remain cautious given ongoing restrictions in Western Europe and large scale flare ups in India,’ said Sean Coghlan, global director, Capital Markets Research and Strategy, JLL.
An accelerated focus on portfolio diversification was noticeably observed in the multifamily sector. Investment into the sector saw an increase of 66% in Europe (from Q1 2020), led by the UK, Germany and France.
‘One year into the pandemic, operators and investors have a greater understanding of cash flow stability and subsequent operational performance. We see renewed economic optimism unleashing market confidence, and when coupled with the continued appetite to deploy capital into real estate, we expect volumes to improve in the upcoming quarters,’ added Coghlan.
