JLL predicts UK investment to fall as much as 40%

UK investment turnover is set to drop by as much as 40% in 2008, creating real opportunities in the market, Jones Land LaSalle said at a presentation at MIPIM. This compares with a predicted 25% drop for Europe as a whole - a EUR 60 bn decrease on the total of EUR 260 bn investment in 2007.

Tony Horrell, head of European capital markets at JLL, noted this was similar to the volume in 2005, which he said was considered to be a very good result at the time. Horrell said that whereas an estimated EUR 5 of money was chasing every euro of real estate product in Europe in March last year, there had been a drastic change. 'There is still money out there chasing, but the ratio is now around EUR 1.5 for every euro of product.'

In line with prediction made by other market watchers, JLL believes Germany will have the strongest rental growth in Western Europe this year. 'We expect investment turnover in the UK to be down year on year by 30-40% at the end of 2008. Activity remains at lower levels than in the past few years,' said Julian Stocks, JLL’s head of UK capital markets.

'Germany stands out in Europe as we expect it to have the strongest rental growth in the region this year and we also believe that balance sheet lending of German banks differentiate the market from elsewhere in Europe,' said Christian Ulbrich, CEO of JLL Germany.