Global direct commercial real estate investment reached $121 billion in the second quarter 2013, according to the newest Global Capital Flows report from Jones Lang LaSalle. Volumes increased 16 percent from Q1 and 10 percent over Q2 2012, with investments totaling $225 billion for the first half of 2013. During the first half of the year, cross-border activity rose to $71 billion.
The report also indicates that London remains the most actively traded city and that U.S. investors remain the most active purchasers of property globally. The South Koreans, Chinese, and Norwegians increased their overseas buying activity over the first half of the year, acquiring prime assets in the U.S., UK, France, and Germany. In addition, more secondary markets-particularly those in the U.S.-are attracting foreign investment flows. Furthermore, Middle Eastern investors continue their penchant for hotel purchases in the United States.
“Asia Pacific and the Americas are seeing continued growth in investor appetite for direct commercial property; however, in contrast to what we witnessed last year, both new and experienced investors are taking on additional risk,” says Arthur de Haast, lead director, International Capital Group at Jones Lang LaSalle. “This has led to increased capital into secondary cities, particularly in Europe and the U.S. This more broad-based activity should continue and will sustain volumes over the second half of the year, which is traditionally busier than the first.”
As a result, Jones Lang LaSalle is maintaining its forecasts of $450 to $500 billion for the entire year.
