Direct commercial real estate sales volumes globally reached US$218 billion in the fourth quarter of 2014, up 28% on the previous quarter and 4% higher than quarter four of 2013.
It means that global direct commercial real estate investment transaction volumes hit a new record high in the final quarter of 2014, according to the data from international real estate firm JLL.
Full year 2014 volumes reach US700 billion, up 18% on 2013. The data also shows that Asia Pacific and EMEA were both up 40% quarter on quarter and the Americas up 15% over the same time period.
According to Arthur de Haast, lead director of the International Capital Group at JLL, the Americas and Europe have been the driving forces of global growth, with economic recovery in the US and the UK a key component.
‘Asia Pacific had been lagging for most of 2014, but a strong final quarter brought it in line with 2013 levels. Despite there being more uncertainty in the world than there was 12 months ago, we expect direct real estate to continue to appeal in a low interest rate environment, so we are forecasting transactional volumes of between US$730 and US$750 billion in 2015, which would be the sixth consecutive year of volume growth,’ he explained.
David Green-Morgan, global capital markets research director at JLL, believes that after such a strong run up in transactional activity over the last six years, growth in 2015 looks as though it may be slightly more subdued as investors weigh up their next moves.
‘The global economy faces new challenges with changing monetary policy in the US, Euro Zone and Japan, pivotal elections in the UK, Spain, Canada and Greece and a Chinese economy coming to terms with lower GDP growth,’ he said.
‘However, the macro drivers of investment into real estate remain, fund raising was robust in 2014, institutions continue to allocate more money to direct real estate and emerging economies are relaxing the rules on the export of capital,’ he added.
The Americas continued to lead performance globally with volumes of US$298 billion in 2014, which is 24% higher than 2013. This number was boosted by another strong final quarter in the US where volumes reached almost US$85 billion, some 6% higher than the final quarter of 2013.
The JLL report says that the US, Brazil and Mexico have maintained good transactional momentum throughout the year while Canada is slightly down on 2013’s performance.
European volume growth almost matched those of the Americas rising 21% to US$267 billion for the full year. Whilst the biggest markets of the UK, France and Germany recorded solid growth of 17%, some of the smaller markets saw considerably higher growth. For example the Nordics was up 41%, CEE up 51%, Benelux up 61% and Southern Europe up 70%.
A stronger than expected final quarter in Asia Pacific has brought the region back in line with 2013 activity. The US$42 billion recorded in the fourth quarter is the highest quarter on record for Asia Pacific, almost 40% higher than the third quarter and was boosted by a surge in activity in China and South Korea, both markets that had lagged the region during 2014.
Full year 2014 volumes are at US$128 billion with Australia up 17% and Japan up 4% on 2013. But China was 20% lower, despite the strong final quarter.
This article was republished with permission from Property Wire.