Global Real Estate Market Perspective in 2015

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20/04/2015 Leave a comment

The major global real estate markets are in better shape than at any time since the Global Financial Crisis, with the continued momentum in capital markets now supported by improving corporate occupier demand across all the main global regions and property sectors. Meanwhile, rising construction levels and developer confidence underline the strength of demand for modern space.

Positive signals from real estate investment, occupational and development markets
The major global real estate markets are in better shape than at any time since the Global Financial Crisis, with the continued momentum in capital markets now supported by improving corporate occupier demand across all the main global regions and property sectors. Abundant liquidity has pushed investment volumes back to the level of 2006, with expectations of further growth during 2015. Meanwhile, rising construction levels and developer confidence underline the strength of demand for modern space. Economic and geopolitical headwinds may affect future growth prospects but, equally, 2015 offers the global real estate market upside potential on the back of a robust recovery in the U.S. economy, lower oil prices, quantitative easing in the Eurozone, a resurgence of India and 6%-7% economic growth in China.

Capital markets break new records
Records have been broken in the global capital markets over the past year. Asia Pacific volumes hit a new high in 2014 following a very strong final quarter; in the Americas they were also at near-record levels; and an exceptional Q4 in Europe propelled full-year totals well beyond expectations. The largest single quarter that JLL has recorded, pushed full-year 2014 global investment volumes to US$710 billion, a 20% increase on 2013.

Investors move up the risk curve
There is a notable growing interest in higher-yielding assets in smaller and second-tier locations, particularly in the U.S. and Europe – in part due to intense competition and yield compression in prime markets, but also now due to broadening and strengthening property market fundamentals. Investors are becoming more flexible and, in Asia, new players are moving into markets like South Korea, India and Thailand.

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