Global Real Estate Perspective May 2021
JLL’s latest Global Real Estate Perspective looks at market dynamics during the last quarter and the prospects for 2021 and beyond.
A mixed start to the year
With vaccination programs at differing stages around the world some countries are now moving into recovery territory while others remain in the midst of the pandemic. Expectations are for a stronger second half to the year as pent-up demand starts to filter through the economy.
Momentum in global office markets remains subdued, with Q1 leasing volumes down 31% on Q1 2020. However, there are now tentative signs of an improving outlook with leasing activity in some countries including China back above pre-pandemic levels. Retail and hospitality, the two sectors most directly impacted by social restrictions, are continuing to face challenges. The logistics sector, the standout performer throughout the pandemic, maintained its robust growth in Q1.
Resilient, yet uneven, market conditions
The strength of the capital markets recovery varies by country, with larger and more liquid markets exhibiting greater resilience. Globally, transaction volumes totaled US$187 billion during Q1 2021, marking a 13% decline year-on-year. Domestic access to capital is playing a pronounced role in the markets, as cross-border capital flows remain stunted by challenging border restrictions. Despite near-term hindrances, longer-term tailwinds favor commercial real estate markets. Institutional allocations are forecast to climb further during 2021 and fundraising efforts are stabilizing, providing ample liquidity to the property market.
Key sector highlights:
- Investment: Resilient, yet uneven, market conditions
- Corporate occupiers: Corporates navigate uncertainty
- Offices: Leasing market remains subdued
- Living: Secular demand drives Living sector activity
- Logistics: Ongoing robust demand for logistics space
- Hotels: Renewed optimism for lodging sector’s recover
- Retail: First signs of improving leasing activity
Please visit www.jll.com/gmp to explore the Global Real Estate Perspective website and data visualization tools.
Global Real Estate Perspective is 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.