Global Market Perspective
May 2018

Five Trends to Watch

One

Strong Start for Real Estate Markets in 2018

Global real estate investment and corporate occupier activity were at their highest levels for a decade in the first months of 2018. A resilient global economy and positive first-quarter results put the market on track for another robust year, although it will be difficult to match last year’s impressive performance.

2018 Prospects

Capital Values 4% Increasing

Rents 3% Increasing

Development 14% Peaking

Vacancy Rate 12.1% Rising

Leasing 40 m sqm Lower

Investment -5-10% Lower

Leasing, vacancy, development, rents and capital values relate to the office sector. Full-year 2018 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, May 2018

Two

Investors broaden approach to accessing real estate

Direct investment volumes are set to soften slightly in 2018 as investors look to new ways to access the sector. The growing prominence of debt financing, M&A activity and alternative sectors all demonstrate that while the way investors access the sector may be shifting, robust fundamentals continue to support their appetite for real estate.

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City performance

Three

Competition for talent and high-quality space shapes corporate location strategies

Co-working operators were a key source of office leasing demand in early 2018, with take-up volumes rising in all three global regions. Employee attraction and retention are increasingly playing a key role in corporate occupiers’ site selection as the availability of talent tightens. Firms are seeking high-quality but affordable locations and adopting co-working space into their real estate strategies.

Four

Omni-channel retail expands as e-commerce companies open new stores

Omni-channel retail networks are expanding as technology and e-commerce continue to dominate the retail agenda. E-commerce retailers and consumer goods manufacturers have shown a growing interest in opening physical outlets that provide a more engaging in-store shopping experience.

Five

Logistics markets maintain strong performance

Buoyant demand in the logistics sector is pushing vacancy rates to historic lows. With increasing competition for quality space, we expect further acceleration in rental growth over the rest of this year.