Global direct commercial real estate investment rose 10% year over year in the second quarter, owing to a boom in activity in Asia.
According to Jones Lang LaSalle, direct commercial real estate volumes in Asia Pacific increased 18 percent in the second quarter compared to the same time a year ago. Outbound investments from South Korea and China, on the other hand, have more than doubled in the first half of this year compared to 2012.
"As investors seek to diversify their portfolios into prime global cities such as New York and London, we continue to see new capital emerging from Asia Pacific," Alistair Meadows, director, international capital group Asia Pacific, JLL, wrote in the paper. "Investors from China and South Korea have driven this growth in the past six months, especially in the residential and office sectors, and we expect emerging market institutional capital to be a major theme in commercial investment markets for several years to come."
In the second quarter of 2013, $121 billion was invested directly in global real estate, up 16 percent from the previous quarter and 10% from the previous year. According to Jones Lang LaSalle's new Global Capital Flows survey, total volumes reached $225 billion in the first half of the year.
Cross-border trade increased by 13% to $71 billion in the first half of 2013, accounting for 42% of all investment activity. In the first half, investment from the Americas and Asia Pacific into Europe totaled $12 billion, up 18% from the previous year. With $8.5 billion invested in European and American commercial real estate, Asia Pacific had the highest amount of foreign investment.
London received 60% of the $12 billion in capital that poured into Europe from the Americas, the Middle East, and Asia Pacific in the first half of the year, continuing a trend. According to JLL, investors are increasingly looking to invest in secondary cities. shop for sale in qatar
In the study, Arthur de Haast, lead director, international capital group at JLL, wrote, "Asia Pacific and the Americas are seeing continued growth in investor appetite for direct commercial property, but, in comparison to what we saw last year, both new and seasoned investors are taking on additional risk." "This has resulted in more capital flowing into secondary cities, particularly in Europe and the United States."
Tokyo's transactional operation increased by 50% in the first half of the year, putting it in the same league as London and New York, with volumes exceeding $10 billion.
The United States continues to be the most successful buyer of global real estate. The Japanese were the second most successful buyers, with nearly all of their purchases remaining in Japan.
JLL is retaining its estimate of $450 billion to $500 billion in global investments for the full year, based on a 10% rise in the first half.
"Over the second half of the year, which is typically busier than the first," Mr. de Haast said, "this more broad-based operation should continue and will maintain volumes."