According to a recent research by Jones Lang LaSalle (JLL), worldwide direct trade investment in real estate decreased 21 per cent a year to 77 billion dollars in the first quarter of 2012, down from 97 billion dollars in the third quarter of 2011. Cross-border capital flows declined to only 39 percent in the third quarter, the lowest level since Q3 2010. used cars
Important Some of the highlights of the JLL report are as follows:
Direct investments in Asia Pacific totalled 20 billion US dollars in the first quarter of 2012, down from 28 billion USD in the third quarter of 2011 and 27 billion USD in the first quarter of 2011.
Asian investors dominate on the ground: The world's Asian sources have invested US$5.7 billion, compared to barely US$400 million in the USA and EMEA.
Japan's Revival: The flow of cross-border money into Japan increased significantly in the first quarter of 2012 (principally owing to two big logistics agreements) and also the first evidence that Japanese investors were exploring outside Asia-Pacific.
Stuart Crow, head of Asia Pacific Capital Markets, says to Jones Lang LaSalle, World Property Channel, "Although Asian real estate has still a great deal of interest, some investors are sitting on the sidelines waiting to see what is happening. In the second part of 2012, we see things shifting drastically with a big amount of liquidity looking for visibility. Investors across Asia Pacific focus on Japan's and Australia's high yield sectors as well as the retail and logistics industries. Approximately the previous three months, over USD 2.5 billion have gone to Japanese logistics, including a portfolio of Jones Lang LaSalle's assets for USD 1.6 billion."
According to Alistair Meadows, Director of the Asia Pacific International Capital Group, "'Asian investors are continuing to boost their investment in key European and US markets,' the research states. A cross-section of Korean, Malay, Singapore, Hong Kong, and Indonesian institutional and high-net-worth (HNW) investors has indicated interest. We are surprised to witness a comeback at international level of Japanese investors planning to extend their allocations to European and U.S. real estate."
Volumes in the Americas remain healthy, with EMEA and Asia Pacific decreasing.
Throughout the year, America has had a total transaction of $29 billion. While 6% lower than the first quarter of 2011 due to the remarkable activity in Brazil last year, the commercial property market in the United States was up 15% and Canada increased 52%.
Total spending in Europe, the Middle East and Africa was $28 billion in the first quarter of 2011, down 27% from the previous quarter. Despite improvements in transaction operations in Japan and Hong Kong, the Asia Pacific Region fell by 28 percent with $20 billion in transactions, the greatest year-on-year.
Inflows favor Europe, while Asia-Pacific outflows benefit.
The bulk of interregional capital movements in Europe remains concentrated with 67% of linked transactions targeted at wider, more liquid markets. $5.7 billion was spent in Asia Pacific while just $400 million was spent, following the pattern that began in 2011. Asian pension funds are increasingly seeking global diversification methods beyond their own markets.
London outperforms New York and Tokyo in the first quarter of 2012.
In the first quarter 2012, London reclaimed the title of Paris' most active worldwide city with considerable investment activity in the fourth quarter 2011. This change was partly due to strong backing from Middle East investors in London and the end of a tax benefit in France. With significant once-in-a-lifetime deals, Toronto and Oslo joined the top 10 traded cities in the first half of 2012.
Arthur de Haast, Lead Director International Capital Group, Jones Lang LaSalle remarked, "Despite the sluggish beginning of 2012, we remain hopeful and retain our forecasts for the whole year at $400 billion. While recent US economies are positive for global immobilization, more work still has to be done in the eurozone. Governments will continue to dominate the year ahead in reaction to continuing economic uncertainty, which world investors will follow with interest. We expect more private equity funds in the USA and Europe to seek debt and distressed assets, as banks start to deleverage."
The office industry is liquid, whereas manufacturing is gaining momentum.
The office sector has been the most liquid, gaining 54 percent of the total investment due to continuous interest in key global cities. The current retail trend, which accounted for a greater percentage of total transactional activities, came to a stop this year.
The industrial sector has received considerable interest, including large portfolio deals in Japan, and accounted for 15 per cent of all transactions. On the other hand, this quarter is projected to be the lowest in terms of both retail and hotel volumes, with $15 billion and $5 billion, respectively, owing to a recent worldwide closure or final diligence deals, which will help Q2 volumes.
David Green-Morgan, Global Capital Markets Research Director of Jones Lang LaSalle, stated, "As the output of the office and retail industries has shrunk worldwide in the previous two years, we believe that investor interests will remain in the industrial sector in 2012. As pricing stays high in primary markets, we anticipate a deeper look at value added possibilities, including previously ignored secondary markets. However, transactions will take longer as many investors carry out more due diligence."