The real estate market is one of the most attractive areas of business. It has been showing stable growth for several years in a row, and 2018 was not an exception. JLL’s research shows that last year financial injections into commercial real estate peaked over the last decade. The total figure was 733 billion dollars. Comparing this with 2017, the amount increased by 4%.

Trends in the commercial real estate market

Large companies invest in real estate in Hong Kong, London, and other large metropolitan areas, where the market is already well studied and the system of interactions has been established.
Last year, the leading position in the number of innovative transactions was taken by London. In 2018, the volume of investments amounted to 36.4 billion dollars, in 2017 the figure was 14% less.
The second place in financial investments in commercial real estate goes to New York. The influx of currency stopped at around 31.4 billion dollars.
The third place goes to Paris, where the volume of investments amounted to 27.2 billion dollars.
The trend of the real estate market in major cities around the world has been observed for a long time. This is due to the opportunities presented by the metropolis. They contain the most concentrated companies with large capital and highly qualified specialists.
Studies show that 12 cities account for 30% of global commercial transactions: London, Paris, Munich, Tokyo, Hong Kong, Shanghai, Seoul, Washington, New York, Toronto, Singapore, and Sydney.

General Real Estate Market Analysis

Describing the general state of the market, JLL director of financial markets and investments Richard Bloksam said that last year investors faced political instability, populism, protectionism, which sometimes assumed rampant proportions. But despite this, the real estate industry remains attractive for business and continues to grow steadily. The focus of investors is still large metropolitan areas, where the cost of construction is high. Instead of expanding opportunities and exploring new regions, investors are ready to diversify the asset portfolio in already explored cities.
The Asia-Pacific region shows good momentum. Due to the increased transparency of processes, the growth of financial investments in real estate in Hong Kong and other cities will continue to grow, improving positions in this and the years to come.
Despite the overall increase in investment in the field, 2018 was not successful for Moscow. In terms of capital in the market, the city fell to 78th position. Investments amounted to 1.6 billion dollars. At the same time, in 2017, the megalopolis held 37th place in the ranking with 3.4 billion. Experts predict that in 2019 the volume of transactions will grow by 30%, which will significantly improve the chances of Moscow to rise in the ranking.

An excellent breakthrough is observed in certain segments, for example, in industrial and warehouse real estate. If in 2009 it accounted for only 10% of investments, now it is at 17%.
A slight decline was observed in commercial real estate. This trend is associated with a change in the direction of investors’ actions under the influence of a reassessment of the behavior and needs of consumers.
Businessmen are trying to enter new markets, but not so willingly. The share of cross-border transactions was 31%.
Experts predict that in 2019 a decrease in activity may be observed. The inflow of investments in real estate can be reduced by 5-10%. It is likely that businessmen will want to keep assets, and will carefully analyze each transaction. Investors will be decided to buy only if the project has a high chance of becoming a tool to increase revenue.