The Jones Lang LaSalle commercial real estate investment team has followed their No1 success in 2009 by continuing to lead the commercial investment property market completing more investment property transactions than any other team in the first four months of 2010.
For our clients in particular, knowledge delivers its own rewards, as knowing who the buyers are allows our teams to connect buyers and sellers across the globe and has ensured that we have delivered over £1.5bn of commercial real estate investment transactions so far this year. It also allows us to get to the heart of some key questions, including:
Has the investment market run out of steam?
Yes in terms of yields compression, number of bidders and viewings. However, there remains £50 billion of equity targeting the UK. Whilst the demand from investors is being more evenly matched by increasing supply there is still activity across all our teams - perhaps a return to more steady market conditions? We sense investors are increasingly having an eye to the occupational markets across all the sectors and we expect more alignment between the occupational and property investment markets going forward.
Where are we seeing rental growth?
Rental values are now increasing in the prime central London office markets due to the impending supply shortage. Secondary assets and locations, however, continue to struggle, with the economic recovery unlikely to be strong enough to offset the inevitable combination of tax rises and public spending cuts that are coming.
Which business sectors are showing early signs of recovery and perhaps new occupier demand?
As is the cyclical way, certain sectors fall first (such as media & comms) and fast and others follow. Good results have been emerging from advertising and communications companies and very strong returns from the banks. So much restructuring has taken place within the financial sectors, with more to come, that this is the one to watch in terms of property need.
For more detail on these questions or other issues relating to current market conditions contact:
Winner of the Investment Agency Team of the Year Award 2010
Winner of the National Property Adviser of the Year Award for Offices 2009
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