Global Commercial Property Investment Hits 10-Year High in Q1

Global Commercial Property Investment Hits 10-Year High in Q1

updated July 23, 2018

Stats from the recently released JLL report highlight how real estate markets have kicked-off 2018 on a high note. While 2017 ended strong, 2018 has gotten off to an even better start for the commercial property sector, with $165 Billion invested into worldwide commercial assets in Q1. This represents the highest Q1 level in 10 years. This marks the most active quarter since 2007, with investments 15% higher than the same period last year. Investor appetite for industrial assets shows no signs of slowing down as the sector recorded year-on-year investment growth of 35%. This is the fifth consecutive quarter of double-digit growth, representing the best performance of any asset class.

In addition to this record-breaking worldwide investment level, investment in Asia Pacific continued to shatter records, with $40 Billion invested into the region. This marks an increase of 34%, and out-performs the previous record from 2008, by 22%. Investment into EMEA remained flat, but strong.

With debt financing, M&A activity, and alternative sectors growing, the appetite for commercial real estate is clearly stronger than ever.

The report also demonstrated how coworking and shared office space is on the rise globally and how the coworking market is transforming real estate across the globe, fast becoming a crucial part of wider corporate real estate and portfolio strategies. While SMEs, freelancers, and mobile workers continue to be the backbone of the coworking industry, medium and large companies have begun to realise the benefit of having flexible office space to manage their liquid workforce. This trend is further supported through some large-block corporate leasing.

Shared workspaces have grown at a rate of 200% over the past five years, and in prime cities, such as London and New York, they are expanding at a rate of 20% annually, cementing coworking as an institutional part of the market. Flex space providers accounted for about one-fifth of activity in London alone.

Increasing interest and a lot of aggressive growth from a number of the key providers is translating into investment, JV and acquisition activity from real estate investment. A rising share of enterprise users is likely to continue to underpin the demand for flexible space over 2018 and beyond.

2018 looks set to be an increasingly promising year for both commercial real estate and coworking industries. This is promising news for us at WSC, as we continue to grow and expand within these sectors. To hear more about our upcoming investment opportunities, get in contact at info@wsc-intl.com