As investors move away from equities, more of them are pouring money into direct commercial property investments, Jones Lang LaSalle said in a new research report.
Much of that activity is driven by cash-rich investors who are snapping up properties in prime locations.
The commercial real estate firm collected data from over 60 countries and discovered in the second quarter that the volume of the direct commercial property investment market grew by 10% when compared to 1Q. In fact, the volume in the U.S. alone hit $103 billion.
Markets in Asia, Europe, the Middle East, the Americas and Africa also saw direct commercial property investment activity rise in the second quarter when compared to the first quarter.
“In contrast to the fragile market of the first half of 2010, investor sentiment is much more optimistic and this is reflected in volumes being up by more than 50% in H1 2012,” Jones Lang LaSalle concluded in its study. “However, the positive attitude of the first half of 2011, when government stimulus was in full swing globally, has not been sustained in the face of continuing debt and economic growth concerns and volumes are down 9% on H1 2011.”
Jones Lang LaSalle noted another significant trend of banks exiting commercial lending, leaving a void that is being filled by private equity firms, as well as individual and institutional investors.
The commercial real estate firm is forecasting $400 billion in total investments in the direct commercial property segment this year alone.
