Property investment volumes rocket in smaller European markets - JLL

Smaller European markets were prominent outperformers in 2014 as data released by JLL put preliminary global real estate investment volumes at $700 bn (€594 bn), up 18% on 2013.

The Americas continued to lead the performance globally with volumes of $298 bn in 2014, an increase of 24% on 2013.

European volume growth almost matched that of the Americas, rising 21% to $267 bn for the full year. Whilst the biggest markets of the UK, France and Germany recorded solid growth of 17%, some of the smaller markets saw considerably higher growth: the Nordics (up 41%), CEE (up 51%), Benelux (up 61%) and Southern Europe (up 70%).

The full-year volume for the Asia-Pacific region came to $128 bn, with Australia (+17%) and Japan (+4%) up on 2013. However, volumes for China came in 20% lower, despite a final quarter.

Globally, direct commercial real estate investment transaction volumes hit a new record high in the final quarter of 2014, according to JLL. Volumes in the fourth quarter reached $218 bn, bringing preliminary full year volumes for 2014 to $700 bn, an 18% on 2013.

Arthur de Haast, lead director of the International Capital Group at JLL, said: 'The Americas and Europe have been the driving forces of global growth, with economic recovery in the US and UK a key component. Asia-Pacific had been lagging for most of 2014, but a strong final quarter brought it in line with 2013 levels.'

He continued: 'Despite there being more uncertainty in the world than there was 12 months ago, we expect direct real estate to continue to appeal in a low interest rate environment, so we are forecasting transactional volumes of between $730 and $750 bn in 2015, which would be the sixth consecutive year of volume growth.'

Click here for a video interview with JLL's Arthur de Haast on the outlook for global capital flows and the likely impact on European real estate markets

2015
Commenting further on the next 12 months, David Green-Morgan, global capital markets research director, JLL added: 'After such a strong run-up in transactional activity over the last six years, growth in 2015 looks as though it may be slightly more subdued as investors weigh up their next moves. The global economy faces new challenges with changing monetary policy in the US, Eurozone and Japan, pivotal elections in the UK, Spain, Canada and Greece and a Chinese economy coming to terms with lower GDP growth. However, the macro drivers of investment into real estate remain, fund raising was robust in 2014, institutions continue to allocate more money to direct real estate and emerging economies are relaxing the rules on the export of capital.'