German commercial property investment up 40% a year

Investment in German commercial property has risen nearly 40% year-on-year, new figures show.
Direct investment volumes reached US$94 billion in the first quarter of 2013 with annual rises of up 8% in all regions - the Americas, Europe, Middle East and Africa and Asia Pacific.

Improving confidence in the global economic recovery and a continued demand for direct real estate saw Germany, Japan, and the United States all strongly finishing the quarter, according to a report by global real estate consultants Jones Lang LaSalle.

Arthur de Haast, head of the International Capital Group, says, “Volumes of almost US$100 billion in the first quarter of the year, in what is historically a quieter period, demonstrates the desire investors continue to have for direct real estate investments.

“Encouraged by a slowly improving global economic environment and rising property values, especially in core cities, the number of assets for sale continues to increase.”

Global capital markets research director David Green-Morgan, says improving sentiment across all real estate markets is encouraging buyers to look at slightly riskier opportunities.

“Vendors are cheered by an increasing number of buyers examining assets in more secondary locations. These two factors are helping to drive volumes higher and we expect this to continue for the remainder of 2013.”

Growth in the Americas was driven by increases in the two largest markets of the United States (up 20%) and Canada (up 6%).

Asia Pacific volumes were boosted by a 30% year-on-year increase in Japan and increases in Singapore and Hong Kong. Overall the region is up 8% annually.

The market research, covering 60 countries, suggests commercial real estate continues to rank high on the list of acquisitions for investors around the world. Improving confidence in the global economic recovery and a continued demand for real estate continues to push volumes higher.
Europe’s three biggest markets, the United Kingdom, France and Germany all contributed to an average 8% rise in US dollar terms and 6% higher in Euro terms.

Jones Lang La Salle concludes, “With the improved results in Q1, we maintain our forecast for the year to be between US$450-500 billion, with further growth in quarterly volumes as we move through the year.”

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