Strong balance sheets and growing business confidence look set to make 2014 an “uplifting” year, for global commercial property markets according to Jones Lang LaSalle.
Next year’s markets could grow by at least 10 per cent with international sales topping $500bn, predicts the firm’s Global Market Perspective Report for the final quarter of 2013. It claims that virtually all major markets are recording sales volume growth which is expected to continue in the months ahead.
Liquidity is also improving and, barring external shocks, LaSalle expects that 2014 global sales volumes could be just 20 to 25 per cent lower than the boom years of 2006 and 2007.
The report says office rental growth is expected to gather momentum, increasing from the current year-on-year one per cent to 3.5 per cent in 2014. There will also be strong demand for luxury retail properties in all major international locations.
The quarter just ending saw the stabilisation of office space demand. Despite this vacancy rates are likely remain elevated throughout 2014. The medium term outlook is for a measured recovery, with strengthening rental growth.
In a separate report, US-based LaSalle Investment Management adds that changes linked to demographics, technology and urbanisation are likely to become key drivers for growth in the global property market.
Populations are ageing while younger people are increasingly drawn to city centre living and businesses are adapting to provide more connectivity in the workplace, its 2014 Investment Strategy Report claims. “This gives investors the chance to exploit opportunities such as healthcare, urban residential projects with good access to work and to shops, and office space that has e-commerce connectivity and sustainability.”
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