Sydney moves into the Top 10 globally for most traded direct real estate markets

2011-12-07T06:00:00Z

Jones Lang LaSalle’s Q3 2011 Global Capital Flows Report notes that the extent to which the change in sentiment from global volatility impacts real estate volumes will be played out in the fourth quarter

AUSTRALIA, 7 DECEMBER 2011 – Sydney has moved into the top 10 most active markets for global real estate transactions, according to Jones Lang LaSalle’s Global Capital Flows Report for Q3 2011. 

Sydney moved up the rankings to number 8 in Q3 measured by the volume of direct commercial real estate transactions.  This compares with a ranking of 39 the previous quarter. 

Stephen Conry, CEO of Jones Lang LaSalle Australia said, “Sydney is once again shown to be a leading destination for real estate capital, with USD 1.6 billion of direct commercial real estate investment sales recorded in the third quarter.  London was the most active market at USD 6.9 billion and New York City came in a strong second at USD 4.3 billion.” 

Of the top 10 most traded direct real estate markets, four markets were in Asia Pacific (Tokyo, Shanghai, Sydney and Hong Kong); four were in North America (New York, Washington DC, Toronto and Chicago); and two were in Europe (London and Paris). 

Rank

Rank Last Quarter

City

Q3 11 (US$ bn)

Q2 11 (US$ bn)

%change Q3 11 - Q2 11

1

2

London

6.9

6.0

15%

2

1

New York

4.3

6.3

-32%

3

4

Hong Kong

4.2

2.4

74%

4

18

Tokyo

3.6

0.9

284%

5

8

Shanghai

1.9

1.8

4%

6

10

Paris

1.8

1.6

15%

7

7

Washington DC

1.7

1.8

-10%

8

39

Sydney

1.6

0.5

228%

9

3

Toronto

1.6

2.7

-42%

10

15

Chicago

1.6

1.3

20%

Mr Conry said the capital market volatility and continuing problems with sovereign debt management in both Europe and the United States were reflected in the Australian market. 

“The third quarter saw a large volume of commercial transactions in Australia but also saw the onset of more caution from many investors and corporate occupiers, corresponding to global trends. 

“Some transactions slowed or deferred, however there is still momentum with solid interest locally and abroad in the many opportunities available in Australia. 

“The market is providing many investment opportunities, particularly in Sydney and the active leasing markets of Brisbane and Perth, where there are a number of large offerings and good competition remains for many of the quality assets available for sale. 

“Australia as an investment destination so far appears well insulated from global financial market pressures.  Australia continues to be in an envied position globally due to our place in the dynamic Asia Pacific region, strong underlying property fundamentals and relatively robust economic performance.  Foreign investors favour this combination. 

“Business and consumer confidence will not remain immune from global financial pressures in the longer term if economic concerns abroad become tumultuous.  The commercial property markets will feel this,” said Mr Conry. 

The Global Capital Flows Report notes that the extent to which the change in sentiment from global volatility impacts real estate volumes will be played out in the fourth quarter. 

Australasian Head of Research at Jones Lang LaSalle, Dr David Rees said, “Our reading of the third quarter to 2011 is that the data across commercial property markets was strong, but there is no doubt that sentiment has weakened.  The ongoing uncertainty about the global economy will be a negative for all categories of capital investment, including investment in real estate if it persists into 2012. 

“What these Q3 global transactions numbers reveal is that, at least in a relative sense, Australia is punching above its weight in terms of real estate investment,” said Dr Rees.