jones lang lasalle q3 2011 global real estate overview
TRANSCRIPT
Global Real Estate Overview
July 2011
Global
Prime Offices - Capital Value Clock, Q2 2010 v Q2 2011
Capital Value growth slowing
Capital Value growth
accelerating
Capital Values bottoming out
Capital Values falling
AmericasEMEAAsia Pacific
Q2 2011
As of Q2 2011
The Jones Lang LaSalle Property Clocks SM
Q2 2010
Notional capital values based on rents and yields for Grade A space in CBD or equivalent. In local currency.
London Washington DC
Toronto, Seoul, Singapore
Beijing
Capital Value growth slowing
Capital Value growth
accelerating
Capital Values bottoming out
Capital Values falling
Hong Kong
Detroit, Madrid
Atlanta, Dallas, Amsterdam Brussels, StockholmJakarta, Mumbai, Tokyo
Shanghai
Milan, Sydney
New York, Sao Paulo Moscow
Chicago, San Francisco
Los Angeles, Berlin, ParisFrankfurt
MexicoCity
Atlanta, Dallas
Chicago, TorontoBeijing
Sao Paulo, Washington DC Amsterdam
New York, Moscow Singapore
San Francisco
Detroit, Mexico City
Los Angeles Berlin, Stockholm
Shanghai
Hong Kong
Brussels, Seoul Madrid, Tokyo
Paris, SydneyMumbai
London
Frankfurt, Milan
Jakarta
Prime Offices – Capital Value Trends, 2007-2011Ca
pita
l Val
ues
(% Q
oQ C
hang
e)
North America – average of 6 markets; Asia Pacific – weighted average of 27 markets: Europe – weighted average of 24 marketsSource: Jones Lang LaSalle, July 2011
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
North America Europe Asia Pacific
Prime Offices – Capital Value Trends, 2007-2011
North America – average of 6 markets; Asia Pacific – weighted average of 27 markets: Europe – weighted average of 24 marketsSource: Jones Lang LaSalle, July 2011
Capi
tal V
alue
Inde
x (Q
1 20
07 =
100
)
60
70
80
90
100
110
120
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
Asia Pacific
North America
Europe
% change
Prime Offices – Capital Value Change, Q2 2010 – Q2 2011
Americas EMEA Asia Pacific
Notional capital values based on rents and yields for Grade A space in CBD or equivalent. In local currency.Source: Jones Lang LaSalle, July 2011.
-20 -10 0 10 20 30 40 50 60 70
Mexico CityDubaiTokyo
MadridBrusselsSydney
ChicagoFrankfurt
Los AngelesMumbai
ParisLondon
New YorkStockholm
TorontoSingapore
Washington DCJakarta
ShanghaiSan Francisco
Sao PauloHong Kong
BeijingMoscow
Basis point change
Prime Offices – Yield Shift, Q2 2010 – Q2 2011
Source: Jones Lang LaSalle, July 2011
BrusselsFrankfurtLondonMadridMoscowParisStockholm
ChicagoLos AngelesNew YorkSan FranciscoTorontoWashington DCSao PauloMexico City
BeijingHong KongMumbaiShanghaiSingaporeSydneyTokyo
Q1 2011- Q2 2011Q2 2010 – Q1 2011
-150 -100 -50 0 50
Prime Office Yields – Global Cities
Source: Jones Lang LaSalle, July 2011Due to differences in reporting metrics across the globe, data are not strictly comparable.
%
2
3
4
5
6
7
8
Q2 2000 Q2 2001 Q2 2002 Q2 2003 Q2 2004 Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 Q2 2010 Q2 2011
New York Paris Frankfurt
London Tokyo
Prime Offices – Rental Clock Q2 2011
Rental GrowthSlowing
RentsFalling
Rental GrowthAccelerating
RentsBottoming Out
Source: Jones Lang LaSalle IP, July 2011
AmericasAsia-PacificEMEA
Abu Dhabi
SeoulDubaiDetroitMexico City
MadridBrussels, Los AngelesAmsterdamRome, Tokyo, Atlanta, ChicagoFrankfurt, Johannesburg, Milan, Dallas
DelhiToronto Mumbai
Sydney, Berlin, Paris
Washington DC, Stockholm, JakartaNew York, Beijing
San Francisco
Shanghai
São Paulo, Moscow, Zurich
London West End
Hong Kong, Singapore, London City
Prime Offices – Rental Clock, Q2 2010 v Q2 2011
Q2 2011
As of Q2 2011
The Jones Lang LaSalle Property Clocks SM
Rental Value growth slowing
Rental Value growth
accelerating
Rental Values bottoming out
Rental Values falling
AmericasEMEAAsia Pacific
Based on rents for Grade A space in CBD or equivalent. In local currency.
Paris, Beijing
Hong Kong
Sao PauloShanghai
Washington DC
Dallas, Toronto Rome, Seoul
Rental Value growth slowing
Rental Values falling
Rental Value growth
accelerating
Rental Values bottoming out
Detroit
Atlanta, ChicagoLos AngelesNew York
Stockholm, Tokyo
Brussels, Frankfurt, MilanAmsterdam, San Francisco
Berlin, MoscowMumbai, Sydney
London, Singapore
Q2 2010
Mexico City
Madrid
DubaiDubai
DallasFrankfurt, Milan
Johannesburg
Detroit
San FranciscoNew York, Beijing
Atlanta, Chicago Rome, Tokyo
Los Angeles, Brussels
Sao Paulo, Moscow
Mumbai
Mexico City
Hong KongSingapore
Shanghai
Sydney, Berlin, Paris
Seoul
London
Madrid
Amsterdam
Washington DCStockholm, Jakarta
TorontoJohannesburg, Jakarta
Prime Offices – Rental Trends, 2007-2011Re
ntal
Cha
nge
(% Q
oQ)
North America – average of 6 markets; Asia Pacific – weighted average of 27 markets: Europe – weighted average of 24 marketsSource: Jones Lang LaSalle, July 2011
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
North America Europe Asia Pacific
Prime Offices – Rental Trends, 2007-2011
North America – average of 6 markets; Asia Pacific –weighted average of 27 markets: Europe – weighted average of 24 marketsSource: Jones Lang LaSalle, July 2011
Rent
al In
dex
(Q1
2007
= 1
00)
80
90
100
110
120
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
Asia Pacific
North America
Europe
% change
Prime Offices – Rental Change, Q2 2010 – Q2 2011
Based on rents for Grade A space in CBD or equivalent. In local currency.Source: Jones Lang LaSalle, July 2011. Americas EMEA Asia Pacific
-25 -20 -15 -10 -5 0 5 10 15 20 25 30 35 40 45 50
DubaiMexico City
MadridLos Angeles
TorontoBrusselsFrankfurt
ParisTokyo
ChicagoNew York
MumbaiSydney
StockholmLondon
Wash. DCSan Francisco
JakartaShanghai
SingaporeHong KongSao Paulo
BeijingMoscow
Global Office Market Conditions Matrix*, 2011-13
* Relates to conditions in the overall office market of a city. Conditions for prime CBD space may differ from the above. Source: Jones Lang LaSalle, July 2011
Market MARKET
Chicago Brussels Beijing
Los Angeles Frankfurt Hong Kong
New York London Mumbai
San Francisco Madrid Shanghai
Toronto Moscow Singapore
Washington DC Paris Sydney
Mexico City Stockholm
Sao Paulo Dubai
2011 2012 2013
Neutral Market
Landlord Favourable
Market 2011 2012 2013 Market 2011 2012 2013
Tenant Favourable
Tokyo
Prime Offices –Projected Changes in Values, 2011
+ 10-20%
Capital ValuesRental Values
Shanghai, Singapore, Sao Paulo Washington DC, San Francisco
London*, New York*, Toronto
+ 5-10%
+ 0-5%
- 0-5%
- 5-10%
Paris, StockholmMumbai, Sydney
Frankfurt, Chicago, Los Angeles
Brussels, MadridMexico City
+ 20%
Shanghai, Singapore New York*, TorontoSao Paulo, London*
Stockholm, Paris, Frankfurt Chicago, Los Angeles, Mumbai
Sydney
Brussels, MadridDubai
*New York – Midtown, London – West End. Nominal rates in local currency. Source: Jones Lang LaSalle, July 2011
Beijing, Moscow, Jakarta, Hong Kong
- 10-20% Dubai
Moscow, Beijing, Hong Kong, Jakarta San Francisco, Washington DC
Tokyo Tokyo, Mexico City
% of occupied stock
Offices –Net Absorption, Year to Q2 2011
Source: Jones Lang LaSalle, July 2011. Covers all office sub-markets in each city. Tokyo - CBD-3 kus Americas EMEA Asia Pacific
-5 0 5 10 15 20 25
Los AngelesChicagoFrankfurt
MadridStockholmNew York
ParisWash. DC
BrusselsSan Fran.
TorontoSydneyLondon
Hong KongMexico City
MoscowTokyo CBDSao PauloShanghai
SingaporeMumbai
Beijing
GDP Change, % pa
Demand Drivers – GDP Change, 2011-2012
Source: IHS Global Insight, Experian, Jones Lang LaSalle, Conference Board of Canada, Deloitte Access Economics, July 2011. Americas EMEA Asia Pacific
0 2 4 6 8 10
MadridTokyo
San FranciscoBrussels
Los AngelesParis
ChicagoLondon
FrankfurtNew York
Washington DCTorontoSydney
StockholmMexico City
SingaporeMoscow
Sao PauloDubai
Hong KongMumbai
ShanghaiBeijing
Completions as % of existing stock
Office Supply Pipeline - Major Markets, 2011-2012
Source: Jones Lang LaSalle, July 2011. Covers all office sub-markets in each city. Tokyo - CBD-3 kus
20112012
0 10 20 30 40 50 60
ChicagoNew York
San FranciscoToronto
Los AngelesWashington
SydneyBrussels
MadridFrankfurtLondon
ParisStockholm
Hong KongTokyo CBD
MoscowMexico City
BeijingSingapore
DubaiSao PauloShanghai
Mumbai
Office Vacancy Rates - Major Markets, Q2 2011
Source: Jones Lang LaSalle, July 2011
Europe 10.2%
Asia Pacific 10.5%
Regional vacancy rates based on 46 markets in the Americas, 24 markets in Europe and 24 markets in Asia Pacific.Covers all office sub-markets in each city. All grades except Asia and Latin America (Grade A only). Tokyo relates to CBD only
Americas17.1%
%
0
5
10
15
20
25Sa
o Pa
ulo
Toro
nto
New
York
Mex
ico C
ity
Was
hing
ton
DC
San
Fran
cisco
Los
Ange
les
Chica
go
Lond
on
Paris
Mad
rid
Brus
sels
Stoc
khol
m
Fran
kfur
t
Mos
cow
Hong
Kon
g
Toky
o CB
D
Sing
apor
e
Shan
ghai
Sydn
ey
Beijin
g
Mum
bai
Prime Retail – Rental Clock, Q2 2011
Source: Jones Lang LaSalle IP, July 2011
Rental GrowthSlowing
RentsFalling
Rental GrowthAccelerating
RentsBottoming Out
London, Milan New York City
San Francisco, Los Angeles
Washington DC
Chicago
AmericasEMEAAsia Pacific
Beijing
Singapore
Hong Kong
Moscow, Shanghai
Sydney
Paris, MumbaiMadrid, Tokyo
Dubai
Berlin
Prime Industrial – Rental Clock, Q2 2011
Rental GrowthSlowing
RentsFalling
Rental GrowthAccelerating
RentsBottoming Out
Source: Jones Lang LaSalle IP, July 2011 Chicago, Dallas, Houston, Los AngelesParis, Madrid
Amsterdam
Singapore
AmericasEMEAAsia Pacific
Atlanta, New York / Northern New Jersey
Hong Kong
Beijing
Shanghai
Tokyo
London
Philadelphia, Frankfurt Warsaw, Sydney
Direct Commercial Real Estate Investment - Annual Trends, 2003-2011
Source: Jones Lang LaSalle, July 2011
US$ billions
0
100
200
300
400
500
600
700
800
2003 2004 2005 2006 2007 2008 2009 2010 2011Projection
Asia PacificEMEA
Americas
US$ billions
188
206
203
161
137
102 92
4841
35
6470 66
7369
Source: Jones Lang LaSalle, July 2011
114
95
Direct Commercial Real Estate Investment - Quarterly, 2007-2011
103
0
50
100
150
200
Q10
7
Q20
7
Q30
7
Q40
7
Q10
8
Q20
8
Q30
8
Q40
8
Q10
9
Q20
9
Q30
9
Q40
9
Q11
0
Q21
0
Q31
0
Q41
0
Q11
1
Q21
1
Americas EMEA Asia Pacific
Direct Commercial Real Estate Investment - Regional Trends
% change expressed in USD terms which may differ from % change expressed in local currency Source: Jones Lang LaSalle, July 2011
$US Billions Q2 11 Q1 11
% change Q1 11 - Q2 11 Q2 10
% change Q2 10 - Q2 11
Americas 48.7 31.3 56% 21.4 128%EMEA 35.7 36.3 -2% 30.3 18%Asia Pacific 19.0 27.1 -30% 17.1 11%TOTAL 103.5 94.7 9% 68.8 50%
Direct Commercial Real Estate Investment - Largest Markets
% change expressed in USD terms which will differ from % change expressed in local currency Source: Jones Lang LaSalle, July 2011
$US Billions Q2 11 Q1 11
% change Q1 11 - Q2 11 Q2 10
% change Q2 10 - Q2 11
US 41.7 22.9 82% 16.2 157%UK 10.8 14.0 -23% 11.1 -3%Germany 7.9 7.3 9% 5.2 53%Canada 5.1 1.7 206% 3.5 47%China 5.1 4.2 20% 2.1 146%Australia 4.0 1.4 193% 1.9 109%France 3.7 3.4 10% 2.9 29%Sweden 3.0 2.2 32% 1.8 65%Hong Kong 2.4 2.6 -7% 2.3 3%Russia 2.3 1.1 111% 0.7 239%Singapore 2.2 4.0 -44% 0.7 225%South Korea 2.0 2.7 -26% 1.3 51%Japan 1.5 9.0 -84% 5.8 -75%Brazil 1.5 6.7 -78% 1.6 -12%Norway 1.3 0.4 224% 0.8 62%Netherlands 1.1 1.2 -11% 1.4 -27%
Direct Commercial Real Estate Investment, 2005-2011
Source: Jones Lang LaSalle, July 2011
+75-80% +25%
+15-20%
0
50
100
150
200
250
300
350
Americas EMEA Asia Pacific
US$
billio
ns
2005 2006 2007 2008 2009 2010 2011 Projection
This presentation is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Jones Lang LaSalle IP, Inc. The information contained in this publication has been obtained from sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information. We would like to be informed of any inaccuracies so that we may correct them. Jones Lang LaSalle does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication.
Contact:
Jeremy KellyNational DirectorGlobal ResearchTel: + 44 20 3147 [email protected]