Despite a challenging economic landscape, JLL’s recently published Global Real Estate Perspective—Highlights presents an optimistic perspective. While the global economy remains uncertain, the report authors note that growth has proven to be resilient and forecasts have been revised upwards throughout the year.
Capital Flows
The report indicates that investor sentiment improved in mid-year despite ongoing uncertainty surrounding interest rates. Some of the largest markets are expected to ease monetary policies by year-end; however, there is still confusion regarding timing and geopolitical factors. Nevertheless, momentum is anticipated 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 states that pricing has stabilized at levels seen since the beginning of 2024 with indications of yield compression in parts of North America, Asia Pacific and Europe.
Debt Markets . Debt market conditions are also improving due to greater clarity on pricing and spread compressions during 1H 2024. Lender confidence remains varied but strongest for high-demand sectors; however loan workouts and refinancing remain areas of focus.
Property Sectors
The report also highlights trends within various property sectors around the 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 towards leasing activities in North America & Europe while cost concerns & lower availability dampened numbers in Asia Pacific region.
Industrial/Logistics . Leasing volumes increased for industrial/logistics properties across EMEA & Asia Pacific regions but stalled slightly in North America due record-high deliveries leading vacancy rates higher than usual levels.. Occupiers continue exercising caution when making decisions about leases accordingtothe reports findings..
Retail . Despite a softening retail spending growth rate globally , consumer demand remains strong driving strength among storefronts worldwide.The forecast predicts retail spending will increase during second halfof2024in mature markets due to rising real disposable incomes, international tourism and an expected increase in 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. Although Asia Pacific investment volumes were lower than other regions, they did see an increase from the previous quarter.
Hospitality . Global hotel RevPAR remained high during first half of 2024 but demand is normalizing in multiple markets. Business travel and growing international demand are driving this growth; however resorts and leisure destinations have seen a significant decline except for European RevPAR which is expected to rise due to the upcoming Paris Olympics generating record demand for surrounding areas accordingtothe report’s authors..
