Global Real Estate Investment Reaches $900 Billion

According to Jones Lang LaSalle’s latest global real estate capital report, ‘Moving Further and Faster’, the amount of capital invested in real estate worldwide has reached the $900 billion mark. Out of the $900 billion, $682 billion has been invested in commercial real estate, multi-family residential investments account for $170 billion and privatised Real Estate Investment Trusts, along with other listed real estate owning entities, account for $48 billion.Guy Hollis, International Director of Jones Lang LaSalle’s International Capital Group, says “There is currently a large overhang of investment targeting the sector with $5 of money chasing every $1 of product. Global real estate markets performed very strongly throughout 2006… Investment was driven by increased allocations to the asset class, growth in investible stock and by the increased attention of opportunistic private equity players who identified relative value in the sector.”

The report states that the emerging markets had a strong year in 2006, with over $40 billion of transactions recorded. Many of the emerging countries showed staggering rates of growth: the Russian market saw growth of over 700% during 2006, with China, Turkey, Mexico and Brazil also seeing strong deal flow.
Mr Hollis says, “Real estate fundamentals remain strong, with solid economic growth projected, vacancy rates remaining low in most major markets, and development pipelines remaining modest.”