Global direct real estate investment returned to pre-recession levels in 2014, according to research by JLL, and should reach about $1 trillion annually within five years.
Driven by a robust economic environment, last year’s total investment is estimated at $700 billion—a level not seen since 2006. JLL predicts a further increase of 10-15 percent in 2015 and $1 trillion in annual direct real estate investing by 2020.
“We expect investments to continue to grow because the market is on a sounder, more sustainable footing than it was before the recession and has more robust controls and scrutiny on investments,” JLL CEO Colin Dyer said in a statement at the World Economic Forum annual meeting, where he served as a discussion leader in sessions on investing for the future.
The improved controls include reduced reliance on leverage and greater use of equity, stricter underwriting standards and increased scrutiny by investment committees. Other reasons for optimism include new sources of capital from Asia and other emerging markets, and more focus on direct real estate investment from institutional investors lured by low interest rates and an evolving regulatory environment.
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LinkedIn post: According to the JLL research released at the World Economic Forum, half of the world’s commercial real estate investment is in 30 cities. The ranking reveals market trends and what to expect in the next five years. Share on LinkedIn
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