JLL: Markets Show Resilience In 'Tumultuous' Year

Tucker, Michael mtucker@mba.org

October 20, 2016


Global real estate markets held up well from July to September, putting full-year transaction volume on track to achieve $610-630 billion, reported JLL, Chicago.

The third quarter saw $163 billion in global investment activity, 6 percent ahead of the second quarter and just 5 percent below third-quarter 2015's strong performance. Overall, year-to-date volumes sit at $454 billion, 8 percent down from the same period in 2015.

"Though much of the global volatility from the first half of the year has continued, we see a realistic and comfortable cushion of activity ahead of year-end as a result of a better than anticipated third-quarter performance," said JLL International Capital Group Head Arthur de Haast. 

JLL said markets regained their footing during the quarter after a 'tumultuous' start to the year, giving the markets increased momentum ahead of the 'pivotal' final quarter.

In the Americas, activity picked up to reach $78 billion, 2 percent ahead of Q3 2015. Regional volume reached $208 billion for the year to date, 9 percent below the same period last year. Canadian activity increased considerably, recording volume 12 percent higher than second-quarter 2015, while Mexico remained Latin America's bright spot with almost $2 billion trading so far in 2016, de Haast said.

"Political and economic uncertainty may have occupied investors' attention, and global bond yields saw  some of the steepest price declines of recent times but, in a low-growth, low-yield economic scenario, real estate looks attractive," said JLL Global Capital Markets Research Director David Green- Morgan.

Europe saw a quarter-on-quarter decline with a 6 percent drop from the second quarter to the third to $53 billion. The United Kingdom market contributed to the region's dip with volume down close to 30 percent in local currency terms. 

de Haast termed the United Kingdom's real estate market "bruised" by Brexit. "However, we have seen some international investors take advantage of the repricing and fall in the [British] Pound to acquire assets, especially in London," he said. "There is additional product coming to the market in the next few weeks which will again be an important indication of buyer sentiment, who on the whole remain equity rich and keen to invest in real estate."

Other than the UK, the region showed stability year-over-year with France and Germany running at roughly the same pace as 2015 and continued strong investor activity in Central and Eastern Europe, Holland, Russia and the Nordic countries, JLL reported.

The Asia-Pacific region witnessed a pickup in activity with $32 billion recorded, 3 percent ahead of a year ago and 14 percent up from the second quarter, JLL reported. This brought year-to-date volumes up to $86 billion, just 2 percent below the same period last year.

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