Jones Lang LaSalle is predicting what everyone already knew: 2010 isn’t going to be a bed of roses for investors. “Challenging” is the word they use, with the most interesting tidbit being that investment volume should hit the heady heights of, wait for it….2002.
€85bn to be precise, by JLL’s estimate. They still manage to be somewhat upbeat about it, under the circumstances.
Despite the fact that occupier markets have remained weak and will stay that way this year, we will see a growing wall of equity selectively targeting the real estate sector. The main focus of this capital will remain on well-let, prime assets and due to a lack of suitable opportunities, this has the potential to exert downward pressure on prime yields as it has done in the UK in the second half of 2009.”
Warsaw gets in with a shout for one of the most hopeful scenarios.
In the early 1990s the rental market recovery lagged the investment market recovery by three years. Jones Lang LaSalle believes that this cycle will be different and those prime office markets which are furthest ahead in their rental cycles are beginning to reach the bottom such as London, Oslo and Warsaw.
Everyone is complaining about the withering pipeline for office, but this is being seen as the best chance for the investment market, as tightening rents will give investors the sort of security they crave.