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Global transaction volumes surge 41 per cent in third quarter

Global transaction volumes in the third quarter cross the US$140 billion mark

PUBLISHED : Friday, 08 November, 2013, 1:57am
UPDATED : Monday, 11 November, 2013, 5:03pm

Global transaction volumes of commercial real estate increased more than 40 per cent year on year in the third quarter to reach US$140 billion, crossing the mark for only the second time in the past six years.

According to Jones Lang LaSalle's report on global capital flows, the 41 per cent rise represents a 16 per cent jump from the second quarter of this year, with the largest growth taking place in the Americas and Europe.

"With economies across the globe gaining momentum, investors of all types are becoming more aggressive in their pursuit of commercial real estate, and we expect sales to continue to grow," said David Green-Morgan, a global capital markets research director for Jones Lang LaSalle.

The property consultant projects global transaction volumes to exceed US$500 billion this year. "We believe we will see volumes grow 10 per cent next year," said Green-Morgan.

North American private equity and pension funds are looking for opportunities outside of their home region as their search for yield expands beyond the secondary and tertiary markets of the United States into Europe, says the Jones Lang LaSalle report.

US private equity firms have joined investors from the Middle East and Asia in targeting opportunities in Europe.

The amount of US investment into European commercial real estate in the first three quarters of this year was up 50 per cent from the same period last year, according to Jones Lang LaSalle.

Since the global financial crisis five years ago, private investors have increasingly sought out bricks and mortar as a means of preserving and growing wealth, according to property consultant Knight Frank.

Prime real estate prices in key locations such as Dubai and Hong Kong, as a result, had risen 63 per cent and 81 per cent since early 2009, it said.

Mainland investors are the most influential buyers by nationality in the world's "prime new-build" segment.

They prefer to buy properties in Hong Kong, New York and London, according to Knight Frank's latest report titled "Global Development Insight".

Investors from Singapore and Russia come in second and third, respectively.

Chinese, Russian and US-based investors were all expected to retain and grow their market share in new-build property over the next 12 months, Knight Frank said.