Despite a murky economic climate, JLL’s recently published Global Real Estate Perspective—Highlights presents an optimistic perspective. While the global economy remains uncertain, the authors of the report note that growth has proven to be resilient and forecasts have been revised upwards throughout the year.
Capital Flows
The report indicates that while there is still uncertainty surrounding interest rates, overall investor sentiment has improved in recent months. Some of the largest markets are expected to see monetary policy easing by year-end; however, there is still confusion regarding timing and geopolitical factors. Despite this uncertainty, momentum is expected to increase with early signs of improvement in real estate markets.
Pricing . In most global markets, pricing continues to stabilize as bidder activity increases and negotiations become more realistic. The report notes that pricing levels have remained stable since earlier this year and yield compression can be seen in certain parts of the U.S., Asia Pacific region, and Europe.
Debt Markets . Conditions in debt markets are also improving due to increased clarity on pricing and spread compressions during 1H 2024. Lender confidence varies but remains strongest for high-demand sectors; however loan workouts continue to be a focus for many investors.
Property Sectors
The report also highlights trends within various property sectors around world:
Office . Demand for office space continues its gradual recovery with leasing volumes up by 10% compared to last year at this time. Hybrid work policies stabilizing contributed positively towards leasing activities in North America & Europe while cost concerns led Asia Pacific numbers down slightly due lower availability.
Industrial/Logistics . Leasing volumes increased across EMEA & Asia Pacific industrial/logistics properties but stalled out somewhat within North America marketplaces despite record-high deliveries which boosted vacancy rates globally according JLL research team members who added “occupiers remain cautious when making decisions.”
Retail . Retail spending growth may have softened slightly yet consumer demand persists driving strength among storefronts worldwide – mature retail spending could rise in 2H 2024 due to rising real disposable incomes, international tourism and increased economic activity.
Residential . The global living investment market continues to strengthen with large transactions occurring in the U.S. & Europe while EMEA living investments nearly doubled its Q1 figures according JLL research team members who added “Asia Pacific investment volumes were lower than other regions but still up from previous quarter.”
Hospitality . Global hotel RevPAR remained high during first half of 2024 as demand normalized across multiple markets – business travel & growing international demand are main drivers yet resorts/leisure destinations fell precipitously except for European RevPAR which is expected to increase thanks Paris Olympics generating record city-wide/surrounding area demands.
