Resurgence in cross-border investment to continue in 2011: JLL

The growth in cross-border investment seen in 2010 is expected to continue in 2011 as investors move up the risk curve, according to new research from Jones Lang LaSalle's global capital markets experts. Global cross-border investment increased by 60% year-on-year and accounted for 40% or $130 bn (EUR 94 bn) of all direct commercial real estate investments in 2010 ($318 billion), the research shows. This proportion is equal to the boom years of 2006-07.

Arthur de Haast, head of the firm's International Capital Group, commented: 'During the downturn, domestic trading held up better globally than cross-border activity as investors focused their attention on familiar markets. In 2010 however, equity-rich investors led the flight to quality assets in core, mature and transparent markets which has supported the resurgence in cross-border investment volumes over riskier secondary and tertiary domestic markets. We expect domestic and cross-border transaction growth to continue in 2011 as investors move up the risk curve.'

In 2010, Europe and the Middle East boasted more cross-border transactions (53%) than domestic (47%), with cross-border volumes made up equally of inter and intra-regional activity. In 2010 cross-border volumes in Europe and the Middle East reached $72 bn of a total market of $136 bn, which was a 53% increase on 2009 when cross-border activity accounted for $47 bn of $97 bn total European and Middle Eastern volumes.

Richard Bloxam, director of Jones Lang LaSalle’s EMEA Capital Markets group said: 'With two of the most sought-after global markets in the region - namely London and Paris - and a large number of active global investors, it is no surprise that this region led the world once again in terms of cross-border activity of both buyers and sellers; we expect this trend to continue.'