Real estate investments increased across the globe in 2012, with the fourth quarter performing especially well. According to preliminary numbers from Jones Lang LaSalle, global volumes ended the year at $436 billion, a small increase over the $435 billion seen in 2011 and a 36 percent increase over numbers seen in 2010. The fourth quarter data signaled a huge turnaround, as investments saw $141 billion during this period.
The strong fourth-quarter numbers are in part attributed to worries about the "fiscal cliff" in the U.S. and the steps investors took to protect their finances from tax increases. Another factor may have been the pent-up demand seen across the country, as the market slowly recovers.
However, the U.S. wasn't the only market that saw an increase in investments. European markets exceeded expectations by matching numbers seen in 2011. France, Germany and Nordic countries experienced strong fourth quarters, like the U.S., boosting market activity within the countries.
2013 outlook strong
Numbers are also expected to stay strong within the coming year. Data from Jones Lang LaSalle indicated 2013 investments are anticipated to be between $450 and $500 billion. Even though numbers are still below peak levels, this could give entrepreneurs looking to expand significant potential.
"The greater allocations to real estate from a number of institutional and private equity groups are starting to have a real impact on the global real estate investment market," said David Green-Morgan, Global Capital Markets research director. "The threat of higher capital gains taxes in the U.S. triggered a wave of year-end transactions, but the underlying factor is the attraction of real estate in a low-yield, high-liquidity environment. Despite the improvement in values over the last three years globally, we are still 15 to 20 percent below the market peak. There remains a great deal of upside potential, particularly in secondary markets which have remained subdued since the financial crisis but are starting to attract investor interest given their more attractive yields."
Companies looking to further their options by expanding worldwide or even furthering their domestic reach may find they need increased options for international banking or corporate banking to ensure they are appropriately served in their new markets. Similarly, businesses looking to make investments in new real estate markets may need to work on obtaining investment loans that will allow them to procure the funds they require.
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