Global Real Estate Outlook

Transcription

1 Global Real Estate Outlook Jeremy Kelly Global Research David Green-Morgan Global Capital Markets Research 7 August 2014

2 Global Real Estate Market Outlook Jeremy Kelly Director, Global Research David Green-Morgan Director, Global Capital Markets Research Ben Breslau Head of Americas Research Arthur de Haast Lead Director Global Capital Markets Tom Carroll Director, Occupier Research 1

3 Corporate occupier demand strengthening 2014 Projections of Gross Leasing Volumes Office leasing U.S. +0-5% Highest net absorption of current recovery cycle Europe +5% London and Paris lead recovery in Europe Asia Pacific % Gross leasing volumes rebounding. Source: JLL, July 2014 but demand remains patchy and recovery in leasing volumes weaker than in previous cycles 2

4 millions sq m Uptick in construction, but late 2015 before delivery Office Completions, Office leasing 20 U.S. Europe Asia Pacific Average Asia Pacific completions 38% higher in 2015 European completions 20% higher in (F) 2015 (F) US construction up 38% 24 markets in Europe; 25 markets in Asia Pacific; 44 markets in the US. Asia relates to Grade A only. Source: JLL, July

5 Development hotspots in each region Office completions as % stock Office leasing Vancouver (6%) Calgary (5%) London (5%) Warsaw (14%) Moscow (14%) Houston (7%) Mexico City (19%) Bogota (23%) Dubai (17%) Delhi (26%) Mumbai (19%) Shanghai (30%) Manila (28%) Santiago (20%) Rio de Janeiro (32%) Sao Paulo (28%) Jakarta (20%) Source: JLL, July

6 Large majority of office markets are in upswing The JLL Property Clocks SM Office leasing Amsterdam Mexico City Moscow Shanghai Berlin Frankfurt Toronto Johannesburg Americas Asia Pacific EMEA San Francisco, Houston Dallas Rental Growth Slowing Rents Falling Sao Paulo London Stockholm, Tokyo, New York Boston Los Angeles, Delhi, Mumbai Rental Growth Accelerating Rents Bottoming Out Warsaw Singapore Istanbul, Beijing Dubai, Chicago, Seoul Hong Kong Prague Brussels, Madrid, Paris CBD, Milan, Sydney, Washington DC Source: JLL, July 2014 Based on rents for Grade A space in CBD or equivalent. This data is based on material/sources that we believe to be reliable. While every effort has been made to ensure its accuracy, we cannot offer any warranty that it contains no factual errors. Neither Jones Lang LaSalle nor any of its affiliates accept any liability or responsibility for the accuracy or completeness of the information contained herein

7 Rental Growth for Prime Office Assets Rental change (% y-o-y ) Office leasing 7.6% 8.6% 4.2% 2.2% 1.5% Prime Office Rental Growth, Unweighted average of 25 major markets. Source: JLL, July 2014

8 Office leasing Singapore and Tokyo - top office performers in % % + 0-5% Rental Values Singapore Dubai, London*, Tokyo Beijing, San Francisco, New York* Boston, Mexico City Stockholm, Hong Kong, Seoul Paris*, Sydney, Frankfurt, Chicago, Los Angeles, Toronto, Washington DC, Shanghai, Madrid, Brussels, Mumbai Capital Values Tokyo, Boston, Chicago Madrid, New York*, Los Angeles San Francisco, Mexico City Dubai, London* Seoul, Sydney, Beijing Frankfurt, Singapore Stockholm, Paris*, Toronto Washington DC, Shanghai, Mumbai Brussels, Hong Kong - 0-5% Moscow % Sao Paulo Moscow, Sao Paulo *New York Midtown, London West End, Paris - CBD. Nominal rates in local currency. Source: JLL, July 2014

9 Industrial Momentum builds in warehousing sector Upward pressure on rents Demand boosted by: Supply Chain Realignment Rental Value growth slowing Rental Values falling E-Commerce Export Recovery Rental Value growth accelerating Rental Values bottoming out US positions relate to the overall market Source: JLL, July

10 Retail Revival, polarisation and consolidation Retail Americas EMEA Asia Pacific United States and European retail sectors maintain recoveries Rise in new shopping centre development in Europe Moscow Paris, Hong Kong, Singapore Berlin, Beijing London Rental Value growth slowing Rental Values falling International retailers target Asia World s largest mall announced in Dubai Tokyo Miami Dubai, Mumbai, San Francisco, Houston Delhi New York, Boston, Washington DC Shanghai Madrid, Milan, Los Angeles Rental Value growth accelerating Rental Values bottoming out Chicago Sydney US positions relate to the overall market Source: JLL, July 2014

11 Regional divergence as AP slows in H1 Direct Commercial Real Estate Volumes by Region, Investment $US Billions % change % change H H % change H H Americas % 52 30% % EMEA % 32 85% % Asia Pacific % 40-21% % TOTAL % % % Source: JLL 10

12 Americas & Europe keep the momentum going Direct Commercial Real Estate Volumes by Region, Investment US$ bn Source: JLL Q3 07 Q4 07 Americas EMEA Asia Pacific Rolling Four Quarters Average Q3 08 Q Q3 09 Q Q3 10 Q Q3 11 Q Q3 12 Q Q3 13 Q

13 Portfolio deals have a major impact on biggest sectors Transactional Volumes by Sector, H & H Investment Office 29% Retail 28% Industrial 22% Hotel 39% H Mixed 3% H Other 38% Source: JLL US$ bn 12

14 Europeans finally look outside Net Buying & Selling, H & H Investment Americas H H Europe Asia Pacific Middle East Global Source: JLL US$ bn 13

15 Cross-border competition increases Top 10 Cross-Border Purchasers by Source of Capital, H & H Investment USA Germany Canada Middle East UK France Singapore China Hong Kong Norway Source: JLL H H US$ bn 14

16 Interest spreading beyond the obvious choices Largest Recipients of Cross-Border Investment, H & H Investment London Paris New York Sydney Tokyo San Francisco Beijing Seoul Melbourne Amsterdam Source: JLL H H US$ bn 15

17 Plenty of equity ready to be spent Closed-end Private Real Estate Dry Powder, Dec June 2014 Investment US$ bn 120 North America Europe Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Jun-14 Asia ROW Source: Preqin 16

18 Investment Prime Offices Annual Capital Value Change 25 Major Office Locations % pa % % % 8.8% 5 3.2% Q Q Q Q Q Q Q Q Un-weighted average of 25 major office markets across the globe Source: JLL, July

19 US$ billions It s 2006 all over again, US$700 bn for 2014 Direct Commercial Real Estate Volumes by Region, Investment Global 20% Americas 25% EMEA 15% Asia Pacific 10% (F) c. 20% Projected Change Source: JLL

20 Global Markets Outlook 2014 Investment Weight of money trumps monetary tightening 28% growth over the first half reflects increasing equity allocations and debt liquidity Portfolio deals up 30%, continental Europe & Latin America lead the way Big markets dominate, but spread to more countries a key factor $700 billion in sight for 2014, up from US$650 billion Leasing Strengthening markets trigger development cycle Uptick in construction, but pipeline still under control Absorption rising, but still patchy Shortage of Grade A space until 2015 / 2016 Rental growth accelerating (4% in 2014) 19

21 Questions and Answers Jeremy Kelly Director, Global Research David Green-Morgan Director, Global Capital Markets Research Ben Breslau Head of Americas Research Arthur de Haast Lead Director Global Capital Markets Director, Occupier Research Tom Carroll! 20

22 GMP: A New Dynamic Website Modern, dynamic, easy to navigate website, with a fully optimised mobile version Web-friendly sector summaries A series of 4 data visualisations including: global clock, regional and city comparisons and a new transactions matrix 21