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Direct commercial investment in 2011 surged 28 percent to US$410.6 billion (S$511.19 billion), with the office sector remaining the favourite among investors, according to Jones Lang LaSalle (JLL).
“Despite the financial crisis over the past two years, commercial real estate remains a core asset class for many investors,” said David Green-Morgan, Global Capital Markets Research Director at JLL.
“The year 2011 finished with a bang and it was the activity in the European markets that grabbed the headlines in the final quarter of the year, against most people’s expectations.”
The property consultancy said that the level of cross-border purchasing activity climbed 31 percent last year, from a 27 percent increase in the previous year. London came out on top as the main active city globally in 2011, with New York, Paris, Tokyo and Singapore completing the top five spots.
Global direct investment volumes rose four percent to US$106.2 billion (S$132.23 billion) in Q4 last year, marking the third time in the last three years that volumes exceeded the US$100 billion (S$124.51 billion) mark.
The total number of cross border purchases remained very stable between Q3 and Q4 at 30 percent. However, investors have been more bullish, increasing the level of cross border purchasing activity to 31 percent in 2011, from 27 percent in the preceding year.
“This is a firm indication that investors are prepared to increasingly look outside their own countries for suitable opportunities when macro circumstances allow,” commented Arthur de Haast, Lead Director of the International Capital Group at JLL.
“However, cross-border activity only tends to do well when the global economy is supportive. If investor sentiment turns more negative, then it will be cross-border and inter-regional flows that will be the first casualty.”
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