Global Market Perspective Q3 2015: Real estate markets thrive

Global Market Perspective, Madrid skyline at sunset

Our latest Global Market Perspective reports a continued momentum in the world’s major commercial real estate markets. For the first time in the current cycle, we are also seeing growth in leasing activity matching that of investment. Office leasing volumes are at their highest level for more than three years, with healthy uplifts recorded across all three global regions.

There continues to be good news to report in investment markets across the world, illustrated by global transactional volumes reaching US$177 billion, in Q2 2015. This represents a year-on-year increase of 9% and we are confident in our year-end forecast of investment levels reaching US$750-760 billion.

Office leasing market fundamentals made a significant rebound during Q2 2015, with volumes up 8% year-on-year, representing their highest level for more than three years. Technology is a key driver across the globe with tech hubs, such as Bangalore, London and San Francisco, making a significant impact on the sector. For further reading on the office market, please also see our latest Global Office Index.

Reduced fuel and energy prices, decreasing unemployment and lower interest rates are boosting disposable incomes across the globe. Retail sales are strengthening in Europe and also in the U.S., albeit at a more gradual rate. The Asia Pacific market is being supported by new-to-market foreign retailers and inbound tourism.
Continued innovation in order fulfilment and delivery is driving further adaption of logistics’ networks and heightening demand in multimodal locations, for automated facilities and for space supporting efficient urban logistics. Strengthening manufacturing is further boosting demand and the sector is benefiting from low vacancy levels.
Global hotel transaction volumes have gone from strength to strength. Of the three regions, the Americas have taken top position with investment up 55% from last year. Europe continues to be a magnet for foreign investment and we are seeing increased movement of overseas capital from China. 

Demand for institutional-grade residential product continues apace in many markets across the globe. In the U.S., multifamily investment sales momentum exceeds the 2007 peak and investor demand is also strong in Germany and in the fledging private rented sector in the U.K. Asia Pacific is recording gradual improvements, although at a slower pace.

For a more detailed overview of markets across the globe, please visit our new Global Market Perspective website, where you can also track your city with our interactive toolkits.

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