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real estate markets
Arthur de Haast
Real Estate Investment Volumes
Institutional Property Investment
David Green Morgan
Global Capital Markets Research
Direct Real Estate Ownership
Global real estate investment volumes are back on the up, with preliminary data from Jones Lang La Salle suggesting total transaction volumes for 2012 somewhere in the region of $436 billion, up from $435 billion in 2011 and up 36% compared to 2010.
The total was boosted by a strong final quarter in which $141 billion was invested. A year-end rush of United States investors seeking to allocate funds to avoid capital gains taxes from the government's "fiscal cliff" crisis is at least partly responsible for the year end surge. This is confirmed by the 51% quarterly rise U.S. volume. Mexico, Canada, France, Germany and the Nordic countries also finished the year strongly. Arthur de Haast, Head of the International Capital Group at Jones Lang La Salle said, "The surge in the final quarter of the year demonstrates once again that real estate markets are well through the recovery phase of the cycle and are now supporting year-on-year increases in transactional volumes. Based on this evidence we anticipate that 2013 will be another one of growth with global volumes set to be between $450-500 billion."
David Green-Morgan, Global Capital Markets Research Director also commented, "The greater allocations to real estate from a number of institutional and private equity groups are starting to have a real impact on the global real estate investment market. The threat of higher capital gains taxes in the U.S. triggered a wave of year-end transactions, but the underlying factor is the attraction of real estate in a low-yield, high-liquidity environment. Despite the improvement in values over the last three years globally, we are still 15 to 20 percent below the market peak. There remains a great deal of upside potential, particularly in secondary markets which have remained subdued since the financial crisis but are starting to attract investor interest given their more attractive yields." Key highlights from Jones Lang La Salle report include:
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