The outlook for real estate is mixed worldwide, with momentum gradually building through the rest of the year, according to JLL’s Global Real Estate Perspective May 2024 report.
The real estate markets showed continuing resilience in the global economy in the first quarter of 2024, despite geopolitical uncertainty and shifts to the interest rate outlook. Growth remains subdued by historic standards, but as inflation eases further and the timing of policy rate reductions becomes clearer, momentum should build through the second half of the year and into 2025, it said.
Signs of a continued gradual improvement in activity were evident in office markets, with global leasing volumes rising by 7% from the previous year. In the logistics sector fundamentals cooled across regions during the quarter as occupiers remain cautious, although the outlook for the full year is positive, with rising inquiries in major markets. Robust retail and hospitality demand has carried over into early 2024, boosted by growing international travel and rising real wages, the reported noted.
JLL also noted that investor sentiment has been relatively mixed but stable, with some improvement evident during the first quarter. Debt market conditions continued to improve in early 2024, both in pricing and liquidity. Investor propensity to transact is greater in markets where price adjustments are more transparent. Pricing is believed to be stabilizing in the U.S. and UK for core product.
In Asia Pacific and parts of Europe, investors remain concerned about further price adjustments, in particular where there is less alignment between buyers’ and sellers’ expectations and a lack of transactional evidence. Price adjustments in Asia Pacific to-date are coming through most quickly in Australia and South Korea.
More buyers are active in the U.S. and UK markets, a function of increasing confidence in pricing levels and a fear of missing out on opportunities. While less evident in closed transactions to date, an uptick in cross-border interest is evident in bidding activity, the report concluded.
Jones Lang LaSalle Incorporated is a global real estate services company, founded in the United Kingdom with offices in 80 countries.
