JLL's regular view on the impact of economic forces on property markets worldwide. It is a unique combination of updates from professionals on the ground and the insights of our leading research organization.
Global Real Estate Markets Robust Despite Uncertainty
Global real estate market activity exceeded expectations in 2018, with investment and corporate occupier demand surpassing 2017’s totals and ending the year at their highest levels since 2007. However, there were signs in the final quarter that demand is softening; investment and leasing volumes were lower than the previous year, and this trend is likely to continue into 2019 as activity moderates from peak levels.
Leasing, vacancy, development, rents and capital values relate to the office sector. Full-year 2019 forecast values. Capital values, rents and development figures refer to percentage change. Global vacancy rate - percentage value, leasing volumes in million square metres, investment volumes in US$ billions. Source: JLL, January 2019
Investors maintain search for income-producing assets
With a significant weight of capital targeting real estate and robust occupier fundamentals, investment activity in 2019 is expected to remain strong. But investment is likely to slow marginally from the current high as investors look to hold their real estate exposure steady and become more selective in the search for income growth.
Global office construction cycle peaking
Buoyant occupier demand is encouraging construction activity, with new office completions in 2019 likely to be around 25% higher than 2018 and reaching a cyclical peak over 2019-2020. With elevated new deliveries and stable demand, the global vacancy rate is projected to rise modestly over the next year, dampening rental growth.
Logistics markets continue expansion into 2019
Global logistics real estate markets ended 2018 on a high note, with record levels of demand and robust pre-leasing keeping vacancy levels at historic lows. Despite concerns about tariffs and trade, structural demand drivers and low vacancy rates are expected to keep rents rising in many markets.
Institutional residential sector posts strong performance
The institutional residential investment market continues to record strong activity in Europe. Investment volumes rose in Germany, the Netherlands and Spain in 2018, while the UK had a breakthrough year for activity in the multifamily sector despite Brexit uncertainties. Meanwhile, the U.S. multifamily market saw full-year leasing levels reach a new high while national vacancy rates decreased to their lowest point in this cycle.