By: Omar Khattaly Researcher & Consultant on MENA Political Economy and Sovereign Wealth Funds
March 2014 How will the global CRE market expected to perform in the short term? According to Jones Lang LaSalle, 2014 will create new records. The overall investment picture is appealing with a rise in investor confidence and an increase in competition for core assets in core locations. This will, in turn, push down yields and drive investor appetite up the risk curve. In 2014, investment transactions estimated to be in the range of $525-575 billion. 2013, was definitely a year of impressive growth, over $500 billion in CRE transactions, corporate balance sheets are looking great, stock markets in major financial center have closed the year with a big plus, and Europe seems to be on track to come out of its recession and Asia Pacific region is maintaining its growth. Globally, third Quarter 2013 results are 16% ahead of second quarter 2013 results. When compared to 2012 results, activities through the end of the third Quarter are up 21%, $366 billion vs. $301 billion. The report estimates the U.S. real estate market, the world’s largest, will grow 10-15% in 2014. Q3 2013 U.S. investment volume was $55 billion; this was the first time since 2007 that quarterly volume has passed $50 billion. Investor demand in the U.S. market remains strong, especially in the core market. Office sector led the growth with a sales volume increase of 32% over previous years. This growth mainly credited to the availability of money and low interest rates in the market. Secondary markets in the U.S., such as Atlanta, have contributed to this growth, where investors are starting to look for better yields outside the heavily competitive primary markets. The graph below provides a clear picture of quarterly activity over the last 6 years. 2013 will finish about 33% lower than the peak of 2007, which was $758 billion in total transactions globally. The global market is recovering at an impressive and steady rate.

- Environmental issues.
- Oversight of real estate property and control.
- Tax cost.
- Limiting administration costs.
- Protection of CBL and Libyan assets.
- Proper subsidiary / corporate structure.
- Risk management and assessment.
- Corporate governance & transparency.
- Tax benefit agreements with investment recipient countries.
- Joint Ventures with successful SWFs in Libya, Europe and the U.S.
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