“There are more potential buyers than opportunities in the market, which creates more intense bidding processes,” explains Coghlan. “Increased competition and large capital pools targeting real estate combine to drive up prices – while at the same time bringing backward areas of the market to the center of attention. “
There is also a growing appetite for scale, as evidenced by the increase in portfolio investment and mergers and acquisitions.
“This is a unique and defining characteristic of the current recovery,” he says. “Over the past few quarters, markets that offer investors the opportunity to deploy capital at scale and efficiently have experienced remarkable resilience, with capital flows resuming. Scale should remain an investment theme.
As activity grew across all markets and industries overall, the United States had a particularly strong quarter, with volumes up 161 percent to $ 112 billion, according to JLL data.
Offers come from a variety of sources. Boston Properties recently partnered with the Canada Pension Plan Investment Board and Singapore Sovereign Fund GIC on a US $ 1 billion co-investment program targeting office buildings in Washington DC, Boston, Los Angeles, New York, San Francisco and Seattle.
In Europe, volumes increased 74% year-on-year, mainly helped by the popularity of the German and UK markets.