European commercial property “slowing down”
EUROPE – Commercial property investment in Europe is slowing down and will be about 10% less than in 2002, according to Jones Lang LaSalle.
In the first half of this year, direct investment in commercial property In Europe was 31.4 billion euros – 18% less than that recorded in the first period of last year. But the decline is a result of lack of supply rather than lack of demand, says Jones Lang LaSalle.
In its European Capital Markets report, the real estate manager says that investment would have been higher in the first half “but for a shortage of available property, caused mainly by fewer developments coming onto the market and a mismatch between sellers’ and buyers’ price expectations”.
Demand remains high, according to the report, as investors seek well-let, income-producing property, and have access to cheap bank loans.
Investment levels in commercial property are expected to be higher in the second half of the year, although not enough to bring 2003’s levels in line with those of 2002.
Says Tony Horrell, chief executive of European Capital Markets at Jones Lang LaSalle: “Looking forward, we estimate that investors now have of over 100 billion euros, including debt finance, to spend on commercial property across Europe.
“In view of the number of transactions in the pipeline, we forecast that the second half of the year will see a higher value of investment than the first. But that 2003 is likely to fall short of 2002’s record level of 87.3 billion euros by about 10%.”
LaSalle Investment Management, the asset management arm of Jones Lang LaSalle, has 20.5 billion dollars (18.1 billion euros) under management.