The global market in commercial property investment is set to hit new highs this year after a surge in deals in the Asia-Pacific region, according to a survey published today.
There is likely to be a record $550 billion (€468 billion) of global transactions this year, after the market rose 18 per cent to $237 billion in the first half, according to Jones Lang LaSalle, the property agents.
Investors have been enthusiastic buyers of commercial property across the world, partly as a backlash against the stock market crash of four years ago.
The most frantic activity this year looks certain to be in the relatively small markets of Asia-Pacific, where deals were up 45 per cent in the first half. This reflects a growing interest from international investors in the region.
For example, this month saw the launch of a new fund from Aetos Capital the US private equity group, with $10 billion to spend just in Japan, the largest commercial property market in the region.
Investors are also looking closely at China and India - albeit from a small base. The value of Chinese transactions in the first half was 2.5 times higher than for the whole of 2004.
The search for higher returns in Asia-Pacific is likely to lead to more deals, said Tony Horrell, chief executive of JLL's international capital group, who argued this would make their property markets more liquid and transparent.
The US still dominates the global real estate market, accounting for 53 per cent of all transactions in the first half, according to the JLL figures.
Groups such as Morgan Stanley and Lehman Brothers will have raised $18 billion this year, giving them about $100 billion to spend on global property in the coming months, according to the report by Ernst & Young.
- (Financial Times service)
