“There are more prospective buyers than on-market opportunities, creating more intense bidding processes,” Coghlan says. “Greater competition and the deep pools of capital targeting real estate are combining to drive up pricing – while at the same time bringing what have been lagging areas of the market back into focus.”
There’s also a rising appetite for scale, as seen in increasing portfolio investment and M&A activity.
“It’s a unique, defining characteristic of the current recovery,” he says. “In recent quarters, markets that offer investors the ability to deploy capital at scale and efficiently have experienced remarkable resilience, with capital flows recovering. Scale is expected to remain an investment theme.”
While activity broadly rose across markets and sectors, the U.S. saw a particularly strong quarter, with volumes surging 161 percent to US$112 billion, JLL data shows.
Deals have come from a range of sources. Boston Properties recently teamed up with the Canada Pension Plan Investment Board and Singapore’s sovereign wealth fund GIC in a US$1 billion co-investment program targeting office properties in Washington D.C., Boston, Los Angeles, New York, San Francisco and Seattle.
In Europe, volumes climbed by 74 percent year-on-year, helped mainly by the popularity of the German and U.K. markets.
