Jones Lang LaSalle on September announced its in new global retail real estate report released at ICSC 2012 Retail Real Estate World Summit.The property consultancy estimates that annual investment volumes in retail real estate could hit US$180bn globally by 2020 due to increasing cross-border activity, showing growth of around 50 percent on the projected volumes for 2012 (US$110-125bn). Retail’s overall contribution to real estate investment is expected to sit at close to 30 percent over the remainder of this decade, an increase from the 24 percent last decade.
The company also said that growth markets are projected to account for around one-quarter of global retail investment by 2020, compared to less than 10 percent today. By contrast, established markets will decline from 83 percent to just above 60 percent.China and India top Jones Lang LaSalle’s Retail Real Estate Momentum Index which identifies the top 20 countries with the strongest momentum in retail real estate globally.The Redefining Retail Investment report confirms that in the last decade, more than US$1 trillion of retail real estate has been traded around the world. Global direct investment has averaged more than US$100bn per year since 2004 and in 2011 annual volumes hit US$122.5bn.
In 2011 cross-border activity accounted for nearly half of all retail investment whilst levels accounted for only one-quarter of all trade in 2004. Crossborder activity will continue to track at around half of all retail investment, boosting annual investment volumes to US$160-180bn by 2020, representing a 30-50 percent increase on 2011 levels.
Arthur de Haast, head of International Capital Group, Jones Lang LaSalle said: “The number of investable geographies has expanded globally as growth markets like China, Brazil and Turkey are attracting global investors. Together with an improvement in the quality and availability of retail assets, rising liquidity levels and further progress in real estate transparency, the retail investment sales sector is set for further rapid globalisation.
”The company predicted that There will be a general rebalancing in capital flows towards the Asia Pacific region, due to favourable demographics and the growth of the middle class. By 2020, Asia Pacific is forecasted to account for 26 percent of global retail investment volumes, up from 22 percent currently and from only 11 percent in the mid-2000s. The report projects that the Americas will hold onto around 33 percent of volumes between now and 2020, whilst EMEA will take around 41 percent (compared to 45 percent currently).
The report also introduces the Retail Real Estate Momentum Index, which lists the top 20 countries with the strongest momentum in retail real estate. China and India sit at the top of the list, though South East Asia and Latin American nations also feature well.