Encouraging Signals from Corporate Occupiers...Global Office Completions, 2000-2015 24 markets in...

Encouraging Signals from

Corporate Occupiers

Global Market Perspective | Q2 2014

COPYRIGHT © JONES LANG LASALLE IP, INC. 2014. All Rights Reserved 2

Global Market Perspective, Second Quarter 2014

Global Market Perspective Second Quarter 2014

Encouraging Signals from Corporate Occupiers

A perceptible change in global real estate dynamics has occurred in recent months as a result of more encouraging

signs from occupational markets across all commercial real estate sectors. For most of the past five years, investor and

occupational markets have moved along separate paths, but in the last two quarters we have seen a distinct

improvement in corporate occupier sentiment, further supporting investors’ decision-making.

Expect another strong year for global real estate investment markets

First quarter investment volumes were predictably down on the record levels of Q4 2013 as investors digested the robust

activity of the second half of last year. Nonetheless, the appetite for commercial real estate is as strong as ever with

yields continuing to compress and capital values once again accelerating. The increasing number of large single assets

and portfolios on the market points to further volume growth in 2014; JLL has therefore maintained its full-year 2014

forecasts at US$650 billion, a 15% uplift on 2013, with a growing likelihood that projections will be upgraded at mid-year.

Direct Commercial Real Estate Investment, 2006-2014

Source: JLL, April 2014

Many of the most desired assets remain in the world’s primary hubs. Four cities – Tokyo, New York, London and Paris

– accounted for 20% of all transaction volumes in Q1. But cross-border trading is boosting volumes in select ‘secondary’

cities such as Philadelphia, Houston and Melbourne; and investors are also seeking out markets further up the risk

curve like Poland and Mexico, or those markets that until recently were considered ‘out of bounds’ such as Ireland,

Spain and Italy.

0

100

200

300

400

500

600

700

800

Americas EMEA Asia Pacific Global

US

$ bi

llion

s

2006 2007 2008 2009 2010 2011 2012 2013 2014 (F)

15% Projected Change 2013-2014

10%

5%

20%

15%



Corporate occupier demand deepens

2014 is expected to be a year when many of the dominant office markets move into a more robust recovery phase.

Although overall leasing volumes were still relatively flat in Q1, there is mounting evidence of a much broader spread of

occupier demand by industry, geography and property sector. The major U.S. cities, London, Seoul, Mexico City and

Manila are among markets with the strongest occupier demand. With improving economic fundamentals and corporate

sentiment, we forecast global leasing volumes in 2014 to be 5-10% higher than in 2013. Corporate occupiers are

expected to remain cost-cautious however, with a clear preference for cost-effective space that drives productivity and

adds value to the business.

An uptick in new construction

A key change in the first few months of 2014 has been the uptick in new office construction, most notably in the United

States. Globally, office completions in 2015 are likely to be 30% higher than in 2014, although volumes will still be only

just above the historic norm. While emerging markets continue to dominate the construction landscape, significantly the

development pipeline is now growing steadily in most mature markets as developers’ confidence builds. Houston and

London are the standout markets in the U.S and Europe.

Global Office Completions, 2000-2015

24 markets in Europe; 25 markets in Asia Pacific; 44 markets in the U.S. Asia relates to Grade A only.


Office rental growth accelerating

Rents on prime office assets (in 25 major markets), which are currently growing by an average of 2% per year, are

expected to accelerate to nearly 4% by end-2014. Several markets could witness rental spikes in 2014 as momentum

builds and shortages of quality space intensify. Singapore is predicted to top the rental growth league table in 2014,

followed by Dubai, London, New York and San Francisco.

0

5

10

15

20

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(F)

2015(F)

U.S. Europe Asia Pacific

mill

ions

sq

m



Prime Offices – Rental Change, 2010-2014

Prime office rental growth, un-weighted average of 25 major markets.


Retail sector maintains steady recovery despite structural challenges

Requirements for retail space across the globe are fundamentally changing in response to shifts in consumer

preferences, spending patterns and robust growth in ecommerce. Yet despite these challenges, the U.S. and European

retail sectors have maintained their steady recoveries. Meanwhile, retailers continue to look for growth opportunities in

Asia arising from economic outperformance. Gateway cities such as London, New York, San Francisco, Hong Kong

and Shanghai are increasing their global dominance, attracting top retailers and outperforming their regional peers.

Increasing warehousing construction

Warehousing development starts are beginning to play catch-up with tenant requirements in both the United States and

Europe, though upticks in speculative activity will be measured. Build-to-suits will continue to be the main option for

aspiring corporate occupiers seeking to lease first-generation warehousing space.

Hotel investment maintains momentum

Increasing investor activity in the Americas is driving high levels of global investment volumes in the hospitality sector.

Yield compression and strong competition for assets in the global gateway cities is encouraging investors to move into

‘secondary’ and ‘tertiary’ locations.

Mixed picture in residential sector

All major rental apartment markets in the United States continue to experience tightening fundamentals, and the for-sale

market is firmly in rebound mode. By contrast, high-end residential sales in most Asian markets are subdued, with policy

restrictions in place in China, Hong Kong and Singapore.

0

1

2

3

4

5

6

7

8

9

10

2010 2011 2012 2013 2014

8.6%

7.6%

2.2%1.6%

Ren

tal c

hang

e (y

-o-y

%)

4.0%



Global Market Perspective

Contents

Encouraging Signals from Corporate Occupiers ........................................................................................................... 2

Global Economy ................................................................................................................................................................ 6

Real Estate Capital Markets ............................................................................................................................................. 8

Investment Volumes ............................................................................................................................................................ 8

Capital Values and Yields ................................................................................................................................................. 11

Corporate Occupiers ...................................................................................................................................................... 14

Global Real Estate Health Monitor ................................................................................................................................. 16

Office Markets ................................................................................................................................................................. 17

Office Demand Dynamics ................................................................................................................................................. 17

Office Supply Trends ......................................................................................................................................................... 19

Office Rental Trends ......................................................................................................................................................... 21

Retail Markets .................................................................................................................................................................. 23

Industrial Warehousing Markets .................................................................................................................................... 25

Hotel Markets ................................................................................................................................................................... 26

Residential Markets ........................................................................................................................................................ 30

Recent Key Investment Transactions ........................................................................................................................... 31



Global Economy

Recovery remains on track, but new global concerns emerge

The long-awaited recovery in the developed world has been overshadowed by risks materialising elsewhere. The most

obvious disruption has been the political crisis in Ukraine, but there have also been currency problems in other parts of

the emerging world, notably in the ‘fragile five’ (Brazil, India, Indonesia, South Africa and Turkey). Neither has the

developed world been immune: deflation in the Eurozone and muted employment growth in the United States have also

raised concerns about prospects.

Nonetheless, these new risks appear to be bumps on the road to recovery, not major setbacks. The latest views on the

larger economies are, on balance, more positive than at the start of the year, with the modest downgrade in the U.S.

growth outlook more than offset by stronger expansion within Europe. Notable in the latter group is the UK, which for

much of the last five years has underperformed its neighbours but is now re-emerging most vigorously.

Global Outlook, GDP Change % pa (PPP), 2013-2015

GDP growth % pa 2013 2014 2015

Global 3.0 3.4 3.8

Asia Pacific 5.3 5.0 5.1

Australia 2.4 2.9 2.9

China 7.7 7.2 6.8

India 4.7 4.7 4.9

Japan 1.5 1.3 1.3

Americas 1.8 2.9 3.5

U.S. 1.9 2.9 3.5

Europe 0.5 1.5 1.9

France 0.3 0.7 1.1

Germany 0.5 1.8 1.8

UK 1.7 3.0 2.5

PPP – Purchasing Power Parity. Source: Oxford Economics, April 2014

Central banks proceed with caution

After announcing a tapering in its QE programme just before Christmas, the Fed has continued to rein in its asset

purchases. The Fed has also revamped its Forward Guidance policy aimed at giving clarity about the future direction of

policy by broadening the range of indicators and signalling a more qualitative approach. New Fed Chair Yellen intimated

that interest rates could rise within six months of the end of tapering, so U.S. rates could be moving upwards by mid-

2015.

Outside of the United States, there have been no major shifts by the key central banks. In the UK, Bank of England

Governor Mark Carney was forced to change his own version of Forward Guidance as the recovery has taken

unemployment below the trigger rate much earlier than anticipated. The view is that the U.S. and UK will lead the upturn

in rates from mid-2015, but thereafter will proceed with caution with interest rates well below their long-term averages

into the medium term.

http://www.ft.com/cms/s/0/e1cef0e4-0b84-11e3-bffc-00144feabdc0.html?siteedition=uk#slide0



For the ECB, priorities are quite different with interest rates expected to be on hold for several years; the latest inflation

figures in the Eurozone have been worryingly weak. The fear is that a slide into deflation could reverse the recent

economic recovery as consumers and businesses postpone their purchases while the burden of their debts increases.

This remains a remote risk, but there is a view that the ECB could cut rates further or even introduce some form of

quantitative easing.

Steady global recovery

Global GDP growth is expected to hit 3.4% during 2014, reaching a rate in line with its historical average (after three

relatively subdued years). This growth is being led by emerging markets, although prospects there have cooled slightly

since the last quarter. In the developed world, after a long period of subdued expansion, a marked upturn is the

likelihood, but growth will remain a little below trend until 2015.

Asia Pacific continues to drive the global recovery. Growth rates in the region are expected to remain high, but are stable

overall as a deceleration in China is offset by recovery elsewhere. China’s slowdown is in part a reflection of an

economy rebalancing growth towards consumers – this will be managed carefully by the authorities, who are also still

concerned about potential risks within the financial sector. India has seen activity dip in recent years and faces some

policy challenges in the near term, but the outlook is likely to improve in 2015. By contrast, Japan is set to maintain its

unspectacular growth trajectory, despite the much-heralded ‘Abenomics’ stimulus.

The outlook for the Americas is expected to improve steadily. The United States has led the upturn in the developed

world, although a weather-affected Q1 means that growth has been revised slightly lower this year. The underlying

health of the economy is not in doubt, however, and a return to trend next year remains in prospect, even against a

background of tightening monetary conditions and fiscal consolidation.

Europe continues to be the global laggard. The Eurozone is projected to return to growth this year, but rates of growth

still compare unfavourably with other regions. Germany is expected to show the strongest expansion during 2014, while

France’s recovery is considerably slower than a sluggish European average. By contrast, fortunes for the troubled

fringe economies have improved somewhat, and Spain and Italy are forecast to see modest growth this year, ending a

prolonged period of contraction.

In the rest of Europe, prospects are healthier. The UK is now predicted to be the most dynamic of the larger economies.

The Nordics are a little less buoyant, but their recovery broadly mirrors the UK pattern. The outlook for Russia and

Turkey has been downgraded significantly in 2014, while the upturn in CEE markets continues, with Poland performing

particularly robustly.



Real Estate Capital Markets

Investment Volumes

Investment volumes continue to grow, encouraged by improving occupier sentiment

The first quarter of 2014 has seen investment markets maintain their year-on-year growth, rising 26% compared to Q1

2013. With the weight of capital targeting commercial real estate continuing to increase from traditional and new

sources, the US$136 billion recorded in Q1 2014 provides further evidence of the appeal of the sector at this point in

the economic cycle. The seasonal trends we have witnessed over the last seven years held true in the year’s first three

months, with transactional volumes down from Q4 2013. However, this was to be expected as the final quarter of the

year, at US$210 billion, was the busiest JLL has ever recorded, beating Q2 and Q3 of 2007.

Direct Commercial Real Estate Investment – Quarterly Trends, Q1 2007-Q1 2014


Slower Q1 for Asia Pacific, although Japan continues to expand

The first quarter of the year in Asia Pacific is traditionally the slowest, and this proved to be the case in 2014. Regional

volumes stood at US$23 billion, a 15% fall on the same period a year ago, with activity tempered by concerns about the

growth outlook in emerging markets and renewed fragilities in China’s financial markets.

Most of the markets were lower, although Japan and Australia did buck the trend by achieving year-on-year growth. In

Australia’s instance the market maintained the momentum of the second half of 2013 by growing 31% compared to the

first quarter of last year. Japan continues to grab many of the headlines in the region – it was this time last year that we

first saw signs of renewed optimism and improved sentiment amongst investors, and this has carried on into the first

quarter. Investment volumes are up 15% year-on-year, and Japan is one of just a handful of markets globally that

witnessed Q1 volumes sustain their Q4 2013 levels. In contrast, investment activity in China cooled in Q1 where debt

markets remain a concern following a large default by a Chinese developer.

0

30

60

90

120

150

180

210

240

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

Q31

1

Q41

1

Q11

2

Q21

2

Q31

2

Q41

2

Q11

3

Q21

3

Q31

3

Q41

3

Q11

4Americas EMEA Asia Pacific Rolling Four-Quarter Average

US

$ bi

llion

s

205

107110

100

113

7369666666

100

118120

159

204

190

119

91

110100

162

40 4335

106

124

146

210

136



... yet another record year ahead for Asia Pacific in 2014

We expect investor activity to pick up during the year, with transaction volumes across Asia Pacific projected to reach

another record of US$140 billion by year-end. Larger markets are again anticipated to drive much of the growth,

particularly in China and Japan. A number of mega-deals are being prepared for disposal and we also predict significant

turnover in the private equity market with a wave of closed-end funds maturing throughout the year. On the flipside, a

number of large PE firms have raised fresh equity, so that segment of the market will be active on both sides of the

ledger.

Direct Commercial Real Estate Investment – Regional Volumes

Source: JLL, 2014

German optimism helps push European volumes higher

While we continue to see the smaller markets in Europe attract increasing levels of investor interest, it was Germany

and the UK (two of the ‘big three’) that contributed a significant proportion of the 19% growth in regional volumes in the

first quarter. German investment volumes were up by 34% compared to a year ago, while the UK recorded a 12% uplift;

France (the other of the ‘big three’) was flat compared to a year ago. German volumes were impacted by a big rise in

portfolio deals, a facet of the market that we expect to grow even further during 2014. European volumes stood at

US$51 billion in Q1 and, while Germany and the UK were major contributors, Spain, Netherlands and Ireland all grew

substantially.

Direct Commercial Real Estate Investment – Largest Markets

Source: JLL, 2014

$US Billions Q4 13 Q1 14

% change

Q4 13-Q1 14 Q1 13

% change

Q1 13-Q1 14 2012 2013

% change

2012-2013

Americas 88 62 -30% 38 63% 204 241 18%

EMEA 85 51 -40% 43 19% 161 220 37%

Asia Pacific 37 23 -38% 27 -15% 98 127 29%

TOTAL 210 136 -35% 108 26% 463 588 27%

$US Billions Q4 13 Q1 14

% change

Q4 13-Q1 14 Q1 13

% change

Q1 13-Q1 14 2012 2013

% change

2012-2013

USA 80.2 55.8 -30% 34.1 64% 177.5 214.6 21%

UK 36.8 17.4 -53% 15.6 12% 51.2 87.3 70%

Japan 12.2 12.2 0% 10.6 15% 25.0 41.7 67%

Germany 14.7 11.8 -20% 8.8 34% 31.1 37.7 21%

France 7.6 5.1 -32% 5.1 0% 22.2 24.6 10%

Australia 6.4 4.2 -34% 3.2 31% 16.5 21.9 33%

Canada 5.7 3.8 -34% 3.1 22% 15.2 18.1 19%

Sweden 3.6 3.0 -16% 1.9 64% 12.4 10.3 -17%

China 8.5 3.0 -65% 3.6 -18% 14.7 25.1 71%

Netherlands 1.6 2.0 28% 0.6 256% 3.8 4.9 31%

Mexico 1.3 1.5 13% 0.3 367% 4.5 5.8 27%

Ireland 1.2 1.4 19% 0.4 205% 0.9 2.5 191%

Poland 1.4 1.3 -7% 0.7 90% 3.5 4.0 16%

Spain 1.1 1.3 17% 0.4 242% 2.6 3.3 28%

Singapore 3.3 1.2 -64% 2.1 -42% 8.4 11.6 38%

Italy 2.6 1.1 -56% 0.8 44% 2.3 6.0 154%

Switzerland 1.6 1.1 -30% 0.1 1598% 4.3 3.7 -14%

Hong Kong 1.8 1.0 -43% 3.3 -69% 11.3 7.3 -35%



Liquidity and increasing allocations make for a powerful cohort

The Americas saw the most significant regional growth over the first quarter, moving 63% higher than a year ago to

US$62 billion. All markets across the region grew, with the United States showing the most sizeable uplift. However,

the magnitude of the percentage increase is partially due to a somewhat weaker than trend Q1 2013, when some activity

had been ‘pulled-forward’ into the final quarter of 2012 due to U.S. tax changes. Nonetheless the environment for

investment activity remains favourable and JLL expects a strong year in 2014, with volumes up 20% on 2013.

Direct Commercial Real Estate Investment – Volumes in Top 20 Cities, Q1 2014

Source: JLL, 2014

U.S. cities dominate the global Top 20

More than half of the world’s 20 most active cities in Q1 were in the U.S, testament to the strength of the nation’s

investment market. While the most desired assets still reside in the world’s primary hubs (e.g., London, New York,

Tokyo, Paris and Los Angeles), cross-border trading activity has helped boost volumes in select ‘secondary’ cities.

Large deals have taken place during Q1, for example, in Philadelphia, Houston, Melbourne and Stockholm (See

Recent Key Investment Transactions). As investors become more comfortable in the assessment of risk at the market

level and the search for yield continues, we can expect more buying and selling activity to occur in a growing number of

secondary cities.

Tokyo leads the global ranking for Q1, which is not untypical for the first quarter of the year, but this year its overall

volumes have been heightened by a number of mega-deals, and the city now stands ‘head and shoulders’ above New

York and London for the first time in several years. Notable by their absence from the Top 20 are Hong Kong and

Singapore; this is due to government policies aimed at cooling their markets, although there is scope for greater liquidity

in 2014 due to more assets coming to the market and a significant amount of dry powder in the private equity

community.

0 2 4 6 8 10

Silicon Valley

Shanghai

Houston

Munich

Sydney

Melbourne

San Diego

Stockholm

Dallas

Toronto

Boston

San Francisco

Philadelphia

Chicago

Washington DC

Los Angeles

Paris

London

New York

Tokyo

Americas

EMEA

Asia Pacific

US$ billions



Capital Values and Yields

Capital values accelerate; yields compress further

The huge ‘wall of money’ targeting real estate continues to push up prices, with capital values on prime office assets

across 25 major global markets accelerating to 8.2% year-on-year in Q1. Although prime office yields in most core

locations are at, or close to, peak levels, these have in some cases continued to move in.

U.S. cities showed the largest yield compression during the first quarter, with Chicago (30 bps) and Boston (20 bps) the

standout markets. Prime yields continue to harden in the major global ‘gateways’ (London City 25 bps; Paris 25 bps;

Tokyo 10 bps), but compression is also a feature of the next tier of investment destinations such as Madrid (25 bps),

Sydney (12.5 bps), Munich, Berlin and Hamburg (10 bps each).

By contrast, the geopolitical tensions in Russia have had a sharp impact on investment levels, and prime office yields

moved out by 25 bps during the quarter in Moscow.

5% capital appreciation predicted for 2014

Single-digit capital value growth (averaging about 5%) is expected in most major office markets in 2014, largely on the

back of rental growth, while yields are forecast to remain generally flat. The largest increases in capital values are

projected for Tokyo, New York, San Francisco and London (City). Meanwhile, Madrid is bouncing back strongly. In

contrast, Moscow and Sao Paulo are likely to see further falls in office capital values during 2014.

Prime Offices – Annualised Capital Value Change, 25 Major Office Locations, Q1 2010-Q1 2014

Un-weighted average of 25 major office markets across the globe


0

5

10

15

20

25

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q12014

% pa

23.3%

12.7%

3.2%

8.2%



Prime Office Yield Trends, Q1 2010-Q1 2014

*Across 25 major office markets.


Prime Offices – Capital Value Clock, Q1 2013 v Q1 2014

Based on notional capital values for Grade A space in CBD or equivalent. U.S. positions relate to the overall market.


5.4

5.8

6.2

6.6

-30

-20

-10

0

10Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014

‘Average’ Prime Office Yields*

6.62%

5.47%

Yield Compression (bps)

%

bps

Americas EMEA Asia Pacific

Q1 2014

Capital Value

growth slowing

Capital Value

growth

accelerating

Capital Values

bottoming out

Capital Values

falling

Q1 2013

Capital Value

growth slowing

Capital Value

growth

accelerating

Capital Values

bottoming out

Capital Values

falling

Paris

Beijing

Milan

MadridBrussels

Shanghai

London

Frankfurt

Moscow

Berlin, San Francisco

Washington DC, Toronto

Amsterdam

Dallas

Mexico City, Sydney

New York, Chicago, Sao Paulo

Boston, Los Angeles, Stockholm

Houston

Hong Kong

Seoul

Tokyo

Singapore

Mumbai

Amsterdam, Madrid

Berlin, Sydney, Shanghai

Brussels

San Francisco

Houston, Frankfurt

London

Milan

Paris

Mexico City, Moscow

Stockholm

Tokyo

Beijing

Dallas, Seoul

Singapore Washington DC

Sao Paulo

New York, Chicago

Boston, Los Angeles

Toronto Hong Kong

Mumbai



Prime Offices – Capital Value Change, Q1 2013-Q1 2014

Notional capital values based on rents and yields for Grade A space in CBD or equivalent. In local currency.


Prime Offices – Rental Value Change, Q1 2013-Q1 2014

Based on rents for Grade A space in CBD or equivalent. In local currency.


-10 -5 0 5 10 15 20 25

Moscow

Sao Paulo

Beijing

Mumbai

Hong Kong

Singapore

Mexico City

Brussels

Frankfurt

Shanghai

Toronto

Washington DC

Seoul

Paris

Sydney

Los Angeles

Tokyo

Boston

Chicago

London

Stockholm

New York

Madrid

Dubai

% change

Americas

EMEA

Asia Pacific

-15 -10 -5 0 5 10 15

Sao Paulo

Moscow

Beijing

Paris

Sydney

Seoul

Brussels

Madrid

Washington DC

Mumbai

Hong Kong

Stockholm

Boston

Frankfurt

Chicago

Mexico City

Shanghai

Toronto

Tokyo

New York

Los Angeles

San Francisco

London

Dubai

Singapore

% change

Americas

EMEA

Asia Pacific



Corporate Occupiers

Momentum builds in occupational markets

Momentum continues to build in occupational markets across the world. Demand is increasing as improved economic

sentiment fuels corporate confidence that, in turn, is allowing well-developed portfolio strategies to be finally executed.

This is leading to a broader base of leasing activity by geography and industry sector and a growing level of pre-

commitments from corporate occupiers keen to secure high-quality space in markets with below-trend completion

volumes.

The TMT sector remains active globally with enquiry levels up in Asia, supplementing already robust tech markets such

as San Francisco, Silicon Valley, Austin and London. Financial and business services continue to recover with

strengthening intentions to hire, although transactional activity is still largely limited to relatively small-scale transactions

by hedge fund, investment management businesses. In Asia domestic corporations, rather than just MNC’s continue to

feature in the core space, especially in China.

The Life Sciences sector is also proving dynamic with multibillion dollar M&A deals emerging during Q1. Although these

deals are being driven by a desire to increase market penetration or share, consolidation will inevitably lead to churn in

occupied portfolios. Indeed, increasing M&A volumes across all industry sectors is both an illustration of increased

corporate intentions to spend and an indicator of future real estate market activity.

In the United States, corporate occupier activity is now spreading beyond those markets dominated by the energy and

TMT sectors; Atlanta and Los Angeles witnessed a marked upturn in activity during Q1. We are also seeing growing

occupier interest around Salt Lake City – referred to as ‘Silicon Slope’ – where a combination of relatively low costs and

high concentrations of talent has already enticed occupiers such as eBay and Goldman Sachs. In Asia, Korea

experienced record levels of take-up during Q1, while Manila is performing strongly on the back of shared service and

BPO demand. In Europe, corporate occupier activity showed steady improvement over Q1 with notable increases in

Paris, with a welcome return of large leasing transactions, and in more peripheral markets such as Spain. One

significant dynamic in Europe was a clear slowdown in activity in Central and Eastern Europe, and specifically Russia

which is, in part, a response to growing geopolitical instability in the region. Such geopolitical tensions present the

greatest risk to the momentum currently being witnessed in global occupational markets.



Global Office Market Conditions Matrix*, 2014-2016

* Relates to conditions in the overall office market of a city. Conditions for prime CBD space may differ from the above. Source: JLL, April 2014

MARKET

Brussels Beijing

Frankfurt Hong Kong

London (West End) Mumbai

Madrid Shanghai

(Pudong)

Moscow Singapore

Paris Sydney

Stockholm

Dubai

Market 2014 2015 2016 Market 2014 2015 2016

Tokyo

Neutral Market

Landlord Favourable

Tenant Favourable

Market

Chicago

Los Angeles

New York

San Francisco

Toronto

Washington DC

Mexico City

Sao Paulo

2014 2015 2016



Global Real Estate Health Monitor

Economy Real Estate Investment Markets Real Estate Occupier Markets

National

GDP

OECD

Leading

Indicator

City

Investment

Volumes

Capital

Value

Change

Prime

Yield Yield Gap

Rental

Change

Net

Absorption

Vacancy

Rate

Supply

Pipeline

Dubai 4.1% na 456% 25.2% 7.3% na 10.1% na 26.0% 17.3%

Frankfurt 1.8% 0.04 24% 4.0% 4.7% 313 2.9% 1.0% 11.4% 2.7%

Hong Kong 3.0% na -60% 0.5% 2.9% 52 0.7% -0.1% 4.4% 5.6%

London 3.0% -0.12 43% 14.9% 3.8% 101 7.7% 1.5% 5.3% 4.7%

Moscow 0.6% -0.11 -60% -7.0% 9.0% na -4.3% 6.0% 13.9% 11.1%

Mumbai 4.7% -0.07 -48% 0.4% 10.1% 111 0.5% 9.0% 22.3% 17.4%

New York 2.9% -0.09 20% 17.5% 4.1% 138 4.7% 1.2% 11.1% 1.2%

Paris 0.7% 0.00 7% 8.8% 4.0% 191 -3.3% 0.2% 7.5% 4.0%

Sao Paulo 1.6% -0.21 -81% -5.4% 8.5% na -10.7% 5.1% 19.8% 28.6%

Shanghai 7.2% 0.01 24% 4.9% 5.9% 134 3.8% 12.0% 12.1% 28.5%

Singapore 3.6% na 13% 3.2% 3.8% 126 11.9% 2.6% 6.6% 4.4%

Sydney 2.9% -0.08 7% 9.2% 6.6% 256 -1.9% -0.3% 10.5% 3.0%

Tokyo 1.3% -0.02 43% 10.4% 3.6% 298 4.5% 1.9% 3.7% 11.0%

Real estate data as at end Q1 2014

Definitions and Sources

National GDP: Change in Real GDP. National Projection, 2014. Source: Oxford Economics

OECD Leading Indicator: Composite Leading Indicator. Change in Index. Latest Month. Source: OECD

City Investment Volumes: Direct Commercial Real Estate Volumes. Metro Area Data. Rolling Annual Change. Source: JLL

Capital Value Change: Notional Prime Office Capital Values. Year-on-Year Change. Latest Quarter. Source: JLL

Prime Yield: Indicative Yield on Prime/Grade A Offices. Latest Quarter. Source: JLL

Yield Gap: Basis Points that Prime Office Yields are above or below 10-year Government Bond Yields. Latest Quarter. Source: JLL, Datastream

Rental Change: Prime Office Rents. Year-on-Year Change. Latest Quarter. Source: JLL

Net Absorption: Annual Net Absorption as % of Occupied Office Stock. Rolling Annual. Source: JLL

Vacancy Rate: Metro Area Office Vacancy Rate. Latest Quarter. Source: JLL

Supply Pipeline: Metro Area Office Completions (2014-2015) as % of Existing Stock. Source: JLL



Office Markets

Office Demand Dynamics

Corporate occupier demand deepens

Following two years of weak leasing activity (2012-2013), 2014 is expected to be a year when many of the dominant

office markets move into a more robust recovery phase. Although overall leasing volumes were still relatively flat in Q1,

there is mounting evidence of a much broader spread of occupier demand by industry, geography and property sector.

Occupier demand is deepening across the United States, Western Europe and parts of Asia, such as Korea and the

Philippines, although absorption is weak in Australia and Canada.

With improving economic fundamentals and corporate sentiment, we expect gross leasing volumes in 2014 to be 5-10%

higher than in 2013, with strongest growth in the Asia Pacific region (where forecasts have been upgraded to 10-15%).

We also anticipate further expansion demand – office net absorption in 2014 is likely to be at its highest level since 2011.

Office Leasing Volumes, 2013 v 2014


Momentum builds in the U.S.

In the U.S, momentum is building, with Q1 net absorption levels at their highest within the current recovery. Top markets

for absorption were Houston, Atlanta, Silicon Valley, Baltimore, Los Angeles and Denver – illustrating a greater

variety than in previous quarters; from energy hubs to tech-rich cities and secondary markets. Leasing volumes fell by

4.1% year-on-year but, tellingly, activity was more evenly distributed across geographies. Shortages of Grade A space

are also boosting demand for Grade B space. Consistent increases in touring activity are likely to manifest in greater

leasing activity during the remainder of 2014 (+5% year-on-year) as corporate confidence firms up and the focus shifts to

expansion rather than renewal.

Europe Asia PacificU.S. Global

FY 2013

FY 2014

+6%

+5%

-12%Flat

+5% +5-10%

-5%

+10-15%



Office leasing activity recovers in Asia, but still weak in Australia

Q1 leasing volumes in Asia Pacific were up 21% year-on-year. However, improvements to date have been patchy and

occupier demand in Australia is still very weak (where activity was down a whopping 55% year-on-year in Q1).

Expansion demand in the region remains subdued – large corporates continue to be in cost-saving mode and most

activity still relates to relocations. Demand in China is being mainly generated by domestic occupiers and select MNCs

(e.g., technology, retailers).

Nonetheless, given that overall leasing activity in Asia Pacific was up in Q1, we are cautiously optimistic about an

improvement in 2014, and have upgraded the regional forecast to 10-15% growth, from 5-10% previously.

European leasing volumes in line with five-year average

European office leasing volumes totalled 2.3 million square metres in Q1, which is marginally below the levels recorded

a year ago – Q1 activity is, in fact, on par with the five-year average. The majority of markets in Western Europe saw a

more active quarter than a year ago – in Paris activity increased by 19%, supported by a couple of large transactions,

while gross take-up in London is running at its highest level since 2000. Volumes were also supported by healthy

activity in Germany, while quarterly levels in the Spanish centres represent a solid start to the year. By contrast,

volumes in Central and Eastern Europe (CEE) decreased by 22% year-on-year in Q1, and were heavily impacted by

weaker corporate activity in Moscow.

European occupiers are expected to remain cost-cautious with a clear preference for cost-effective space that drives

productivity and adds value to the business. Evidence for this is found in the significant amount of pre-let space for

2014, illustrating that occupiers are willing to commit to new, modern space in markets where it has become scarce.

European office take-up is forecast to increase by 5% in 2014 and another 5-7% in 2015.

Global Office Demand – Net Absorption Trends, 2004-2014

24 markets in Europe; 25 markets in Asia Pacific; 44 markets in the U.S. Asia relates to Grade A only. Source: JLL, April 2014

-5

0

5

10

15

20

25

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

mill

ion

s sq

m

Pro

ject

ion



Office Supply Trends

Uptick in construction activity

A key feature of the Q1 2014 global office market has been the uptick in new construction. The supply pipeline is now

growing steadily as developers’ confidence builds. Globally, office completions for 2015 are likely to be 30% higher than

2014, although this is still only just above the historic norm.

New construction up 18.5% in the United States

In particular, there has been a sizeable shift in new office development in the United States, with new construction up

18.5% in Q1. But even with this recent flurry of activity, construction remains well below the long-term average, and

most space under construction will not hit the market until 2015-2016. Further tightening of supply will be required

before we see significant increases in new development. Among U.S. cities, the leader by far is Houston which

accounts for nearly one-quarter of national office construction.

A lull in new deliveries in Asia Pacific

In Asia Pacific, full-year completions for 2014, at about 4.5 million square metres, are expected to be at their lowest level

since 2006, with a significant proportion of this space located in India. However, this is a temporary lull in development

activity and new deliveries are projected to rise by one-third in 2015.

Construction also rising in Europe

Developer confidence in Europe is improving, bolstered by high levels of pre-letting activity. We forecast completions in

2014 to increase by circa 20% compared to 2013, a level that would be 5% above the five-year average. Among

Western Europe’s larger markets, London continues to see the strongest development activity.

Office Supply Pipeline – Major Markets, 2014-2015

Covers all office sub-markets in each city. Tokyo – CBD - 5 kus


0 5 10 15 20 25 30

ChicagoLos Angeles

MadridNew York

Washington DCBrusselsToronto

StockholmFrankfurt

SydneySeoul

BostonParis

San FranciscoSingapore

LondonHong Kong

BeijingTokyo

MoscowDubai

MumbaiMexico City

ShanghaiSao Paulo

Completions as % of existing stock

2014 2015



Vacancy rates unchanged

The global office vacancy rate (across 97 markets) has remained stubbornly high within a range of 13-13.5% for the past

two years – and as at Q1 2014 the rate was once again unchanged at 13.2%. Overall vacancy is expected to only

reduce slowly, as corporate occupiers continue to release second-hand space back onto the market. Current forecasts

indicate that rates are unlikely to fall below 13% until the end of the year.

U.S. Vacancy: Vacancy in U.S cities kept stable at 16.6% in Q1, but over the coming quarters the rate is forecast to fall,

given positive economic momentum, strengthening net absorption and limited new deliveries in 2014.

Asia Pacific Vacancy: The regional vacancy rate peaked at 11.9% in H2 2013 and is now beginning to fall (11.8% in

Q1 and 11.7% projected for Q4 2014). Significantly, most dominant Asian markets are still recording single-digit

vacancy levels. The key exceptions are India, where rates are generally above 20%, and Australia, where the average

CBD vacancy rate remains at 12%.

Europe Vacancy: The European office vacancy rate has continued unchanged for five consecutive quarters at 9.7%.

Vacancy is expected to reduce only very slowly as expansionary demand across Europe is still low.

Office Vacancy Rates in Major Markets, Q1 2014

Regional vacancy rates based on 49 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 – 5 kus.


0

5

10

15

20

25

Tor

onto

Mex

ico

City

New

Yor

k

San

Fra

ncis

co

Was

hing

ton

DC

Los

Ang

eles

Chi

cago

Bos

ton

Sao

Pao

lo

Lond

on

Par

is

Sto

ckho

lm

Bru

ssel

s

Fra

nkfu

rt

Mad

rid

Mos

cow

Tok

yo C

BD

Bei

jing

Hon

g K

ong

Sin

gapo

re

Syd

ney

Seo

ul

Sha

ngha

i

Mum

bai

Europe 9.7% Asia Pacific 11.8%Americas 15.7%%

Quarterly movement

Increased

Decreased

Stable

Global 13.2%



Office Rental Trends

Rental growth accelerates

Rental growth for office space accelerated in all three global regions during Q1 2014. Asking rents in the United States

increased by 4.2% year-on-year, the fastest rate of the current recovery; net effective rental growth in Asia Pacific

advanced moderately to 1.1% year-on-year, while annual rental change on prime assets in Europe moved into positive

territory (0.9% year-on-year) for the first time in two years.

Among the larger office markets, Mexico City (+7.1%), Singapore (+4.5%), Chicago (+4.3%) and Paris (+3.5%)

witnessed the strongest uplifts during the quarter.

Momentum to build during 2014

Rents on prime assets across 25 major markets, which are currently growing by 2% per year, are expected to accelerate

to nearly 4% by end-2014.

Singapore is predicted to top the rental growth league table in 2014, followed by Dubai, London, New York and San

Francisco. Several markets may see rental spikes as momentum builds.

By contrast, Moscow is likely to register a decline in rents this year, with additional downside risks as the market adjusts

to recent geopolitical events. Rents will continue to correct in Sao Paulo as the market struggles with a large supply

pipeline during 2014.

Prime Offices – Projected Changes in Values, 2014

*New York – Midtown, London – West End, Paris - CBD. Nominal rates in local currency.


+ 10-20%

+ 5-10%

+ 0-5%

- 0-5%

- 5-10%

Dubai, London*, New York*San Francisco, Hong Kong, Tokyo

Singapore

Capital ValuesRental Values

Frankfurt, Paris*, Boston, ChicagoLos Angeles, Toronto, Washington DC Mexico City, Beijing, Seoul, MumbaiShanghai, StockholmBrussels, Madrid

Moscow , Sydney

Tokyo, New York*San Francisco, Madrid

Dubai, London*, Boston, ChicagoLos Angeles, FrankfurtSeoul, Singapore

Paris*, Shanghai, MumbaiWashington DC, TorontoMexico City, Beijing, Hong KongSydney, Stockholm, Brussels

Sao Paulo

Moscow

Sao Paulo



Shrinking tenant options drive rents up in the United States

Office rents in the United States are rising at a faster pace than at any period of the current recovery; 85% of U.S.

markets posted rental growth in Q1. Tenants now have far less leverage across urbanised core markets, especially in

Trophy and Class A buildings. Most notable is the increase in asking rents in technology hubs – buoyed by

expansionary activity of the tech giants.

Cities such as San Francisco and Houston, that are currently leading rental growth, are expected to see landlord

favourable conditions abate over the next 24 months as new space comes onto the market. Diversified markets – like

Atlanta, Chicago, Los Angeles, Philadelphia and Phoenix – show increasing promise, and there will also be more

traction in mid-sized markets.

Return to rental growth in Paris boosts Europe’s performance

The European Office Rental Index increased by 1.1% over the quarter, the strongest quarterly advance since mid-2011.

The Index has been boosted by a recovery in Paris (+3.5%) following a challenging 2013, as well as double-digit

quarterly growth in Dublin (+20%) and Lyon (+15%). A shortage of quality supply and improving occupier sentiment is

expected to filter through to rental growth, with around 3% projected for the 24 European Index cities in 2014.

Asia Pacific net effective rents strengthen

Net effective rents rose in over half of all Asia Pacific markets in Q1 2014, with regional quarterly growth accelerating

from 0.2% in Q4 2013 to 0.8% in Q1 2014. The most robust rental growth was in Singapore (+4.5%) as vacancy edged

further lower. Quarterly growth in Tokyo strengthened to 2.0%, while small rental uplifts were seen in Shanghai and

emerging SEA markets. Rents edged up in Beijing for the first time since Q3 2012 on improved occupier sentiment, and

stabilised in Hong Kong. However, quarterly growth in Jakarta eased further to 1%, its slowest rate since Q3 2010.

Effective rents increased in Sydney and Melbourne (1-3%), but continued to fall in other Australian CBDs (with the

largest drop recorded in Perth of 12%).

Prime Offices – Rental Clock, Q1 2013 v Q1 2014

Based on rents for Grade A space in CBD or equivalent.

U.S. positions relate to the overall market



Q1 2014

Rental Value

growth slowing

Rental Value

growth

accelerating

Rental Values

bottoming out

Rental Values

falling

Q1 2013

Rental Value

growth slowing

Rental Value

growth

accelerating

Rental Values

bottoming out

Rental Values

falling

Washington DC

Boston

Los Angeles, Dubai

San Francisco, Houston

Brussels, Singapore, Shanghai

Dallas, London

Paris

Milan

Frankfurt

Moscow

Berlin

Stockholm

Amsterdam, Sao Paulo

Chicago, Madrid

Mexico City

Toronto

Beijing

Hong

Kong

Sydney

Seoul

Mumbai

Rome

Brussels, Paris, Madrid

Beijing, Hong Kong, Sydney

Singapore

Seoul

New York, Stockholm

Tokyo

Boston

Shanghai

Amsterdam

Berlin, Frankfurt

Johannesburg

London

Milan

Moscow

Los Angeles, Istanbul

Mumbai

Chicago, Dubai

San Francisco

Washington DC

Houston

Toronto

Mexico City

Sao

Paulo

Dallas

New York, Johannesburg,

Istanbul, Tokyo



Retail Markets

Structural changes continue to challenge the retail sector

Requirements for retail space across the globe are fundamentally changing in response to shifts in consumer

preferences, spending patterns and robust growth in e-commerce. International retailers are focused on acquiring high-

quality retail space in markets with healthy market fundamentals. London, New York, Miami, Houston, San

Francisco, Hong Kong, Shanghai and the premier German retail locations (e.g., Dusseldorf and Cologne), for

instance, continue to attract top retailers and are outperforming their regional peers.

Improvements in the U.S. retail sector despite challenges

Despite these structural challenges and newly-announced store closings, the U.S. retail sector has continued on its solid

recovery and is exhibiting tightening market conditions. The vacancy rate decreased 10 basis points to 6.5% in Q1; net

absorption, which totalled 24.4 million square feet in Q1, is almost double the level of new deliveries at 12.5 million

square feet; and rents are inching up, rising 0.3% from the previous quarter and increasing 0.9 % year-on-year. Among

the U.S. shopping centre types, power centres are now seeing the tightest overall market conditions, with total vacancy

of 5.1%.

Modest rebound in Eurozone retail sales

Optimism in the Eurozone economy has brightened more than expected in 2014 as consumer confidence showed its

strongest monthly improvement in nearly five years (from -12.7 in February 2014 to -9.3 in March 2014). This year’s

retail sales are forecast to see moderate growth of 0.7% in the Eurozone and 1.2% across the EU, driven by a slowly

recovering labour market and stabilisation of real incomes.

Renewed interest in Europe’s recovering markets

Prime high street rents are steady in most major European cities, but there have been notable increases in cities where

the retail sector has been struggling in recent years such as Budapest (+7%), Lisbon (+5.6%) and Dublin (+5.0%).

Mixed retailer demand in Asia Pacific

International retailers continue to look for growth opportunities in Asia arising from economic outperformance relative to

the rest of the world. They are opening stores and expanding in South East Asia, although more caution was evident

during Q1 in Singapore and Jakarta. China experienced healthy demand supported by fast-fashion retailers and F&B

operators, but some luxury brands opted to expand within existing locations. In Hong Kong, demand remained strong in

core areas, but softened in secondary locations as a result of high rents.

India has witnessed some retailers closing stores or reducing space requirements, while Australia has seen more

enquiries, but this has yet to translate into higher leasing demand. Retail rents in Bangkok fell by 5.6% during the first

quarter as political tensions affected foot traffic in some malls.

Relaunch of mega-projects in Dubai

In Dubai, the resurgence of its property market has been marked by the relaunch of a number of mega-projects such as

the Mohammed bin Rachid City (MBR) which, when complete, will reputedly house the largest retail mall in the world,

‘Mall of the World’.



Prime Retail – Rental Clock, Q1 2014

Prime Industrial – Rental Clock, Q1 2014

Relates to prime space. U.S. positions relate to the overall market


Rental Value

growth slowing

Rental Values

falling

Rental Value

growth

accelerating

Rental Values

bottoming

out


Shanghai

Chicago

Madrid

Dubai, Mumbai, San Francisco, Miami

Beijing

New York, Houston, Delhi

Paris, Hong Kong

London

Tokyo

Boston, Los Angeles, Washington DC Milan, Sydney

Moscow, Singapore

Berlin

Rental Value

growth slowingRental Values

falling

Rental Values

bottoming

out

Warsaw


Rental Value

growth

accelerating

Beijing, Hong Kong

Boston, Amsterdam, Paris, Madrid

Atlanta, Houston

Chicago, New York, San Francisco

Frankfurt

Shanghai, Tokyo, Los Angeles

Philadelphia

London

Sydney

Dallas

Singapore



Industrial Warehousing Markets

U.S. markets see continued tightening

The availability of industrial space in the United States declined further in Q1. The national vacancy rate now stands at

7.8% and is expected to reach a prior-cyclical low of 7.5% during the second half of the year, continuing to exert upward

pressure on rents. A declining vacancy rate and increasing rents can be attributed to minimal completions which marked

a 60-year low from 2010 to 2012. Development started to play catch-up with tenant requirements in 2013, and though

this will continue to be the case this year, upticks in speculative ground-breakings will prove measured – underwriting

criteria remain fairly stringent, meaning that build-to-suits are the main option for aspiring occupiers eager to lease first-

generation space.

Major hub markets in United States enjoying strongest growth

Dominant logistics corridors, such as the Inland Empire (Southern California), Central Pennsylvania and Dallas are in

strong in demand, since – while being trans-shipment markets with robust infrastructure and access to the nation’s

population centres – they also offer development sites to accommodate new construction. These corridors will be on the

high-end of 2014’s rental gains, assuming that new speculative deliveries remain paced. Gateway centre markets,

including Los Angeles and New Jersey – built-out seaport markets that are home to mega population centres – will

have significant rental upticks in quality-B inventory. Several secondary markets, including Indianapolis and Phoenix

(evolving auxiliary hubs), will post Class A rental gains that trail those of the logistics corridors.

Sustained period of high occupier demand in prospect in Europe

Occupier demand in Europe is expected to remain buoyant during 2014 and beyond as companies continue to adjust

their supply chain models. While demand is strong for all types of logistics buildings, we anticipate that take-up volumes

will be boosted in particular by rising demand for large-size units (30,000-50,000 square metres) and mega-sheds

(>100,000 square metres). Simultaneously, increasingly complex urban logistics models, comprising online and offline

delivery, are creating more demand for urban parcel hubs and so called ‘dot-com’ centres.

Russia, which in recent years has been one of the three largest occupational markets in Europe, is likely to be

negatively affected by current political tensions, which would reduce overall European take-up levels in 2014.

Speculative development edging upwards in Europe

Speculative development in Europe has edged up in recent months amid healthy occupier demand and a lack of suitable

modern supply. Nevertheless, demand still outweighs supply and the overall net effect from moderately rising

speculative development on supply levels will remain limited over the next 12-24 months, which will drive selective rental

growth. With the improved economic outlook and further strong market fundamentals, we expect European rents, on

aggregate, to show positive growth from the second half of 2014 onwards.

Demand in Asia driven by the retail sector; the export-related segment is improving

Across Asia, e-commerce and logistics companies continue to underpin leasing activity, while demand from exporters

and manufacturers has strengthened in some markets such as Shanghai and Singapore. Moderate rental growth was

seen in most monitored markets in Q1, with Shanghai, Hong Kong and Singapore (business parks) recording the

largest quarterly growth (about 1.5%). Moderate rental growth is projected for most centres this year on gradually

improving exports, albeit constrained by moderate retail sales and cost-sensitive occupiers.



Hotel Markets

Hotel investment activity remains strong in Q1 2014

Global hotel investment volumes totalled US$12.4 billion in Q1 2014, representing a minor uptick of 0.3% on Q1 2013.

Growth was driven by accelerated activity in the Americas, which showed a 16% uplift. The EMEA region experienced

lower levels of activity in Q1 2014 compared to the same period last year – however, we expect this situation to be

reverted with several substantial deals being at an advanced stage of negotiation and scheduled to close later this year.

Asia Pacific hotel transaction volumes grew by 7% to around US$1.7 billion.

Hotels – Investment Transactions, 2013-2014

US$ billions Q1 2013 Q1 2014 Q1 2014-Q1 2013

Americas 5.3 6.1 16%

EMEA 5.4 4.5 -17%

Asia Pacific 1.6 1.7 7%

12.3 12.4 0.3%


Hotels – Regional Investment Volumes, Q1 Dynamics


3.4

5.36.1

3.5

5.44.5

0.3

1.6 1.7

0

2

4

6

8

10

12

14

Q1 2012 Q1 2013 Q1 2014

US

$ bi

llion

Americas

EMEA

Asia Pacific



Hotels – Investment Volumes by Buyer and Seller Type, Q1 2014


Investor activity in the Americas continues to strengthen

With hotel occupancy rebounding to previous peaks and average room rates rising across most geographies and market

segments, transaction activity in the Americas demonstrated further growth in 2014. The debt markets continue to

experience increasing liquidity, propelled by an improving CMBS market and support from both alternative and balance

sheet lenders who are helping to drive the increased transaction volumes. Although a number of portfolio deals were

completed in Q1 2014, particularly in the select-service/mid-market segment, 75% of transaction activity involved single-

asset deals, compared to 55% a year ago.

Hotel operators stepping up on the sell-side

Buyer profiles have changed only slightly across the Americas region. The market remains dominated by private equity

investors and REITs, accounting for 42% and 21% of acquisition volumes respectively in Q1.

Seller profiles, however, have seen a more notable shift with investment funds yielding to hotel operators whose share

increased to 33% of sales compared to only 7% a year ago. InterContinental Hotels Group led the charge having

completed the sale and manage-back transactions on two key assets in New York and San Francisco – in line with

their ‘asset light’ strategy. Hyatt Hotels Corporation and Starwood Hotels & Resorts Worldwide also continued to

selectively dispose of assets.

United States remains the front runner

The United States stayed at the forefront of activity, accounting for 89% of the Americas transaction volume in the first

quarter, translating into a healthy 10% increase compared to Q1 2013. Key markets such as New York, Miami and

Chicago collectively attracted nearly 30% of all investment in the U.S. hotels sector.

Yield compression and strong competition for assets in key markets are encouraging investors to actively pursue

opportunities in secondary locations in the search for higher yields and upside potential; this is supported by improving

hotel fundamentals and a positive outlook for growth across the U.S.

-40% -30% -20% -10% 0% 10% 20% 30% 40% 50%

Other

Corporates

Bank / Institutional Investor

HNWI

Sovereign Wealth Fund

REIT

Hotel / SA Operator

Developer / PropertyCompany

Investment Fund / PrivateEquity

Seller Type Buyer Type

40% 30% 20% 10% 0% 10% 20% 30% 40% 50%



Strong pockets of growth across Latin America

Strong tourism demand, fundamental economic and political transformation, as well as improving risk perception across

the largest markets, are creating a positive outlook for the lodging sector in Latin America, which has been reflected by

an impressive uptick in investment activity in Q1 2014. With Puerto Rico, Mexico and Brazil setting the scene, total

volumes into the region increased nearly sevenfold compared to Q1 2013 and have already reached more than 40% of

total annual volumes recorded in 2013.

Investor interest in EMEA remains high but opportunities are limited

Transaction activity in EMEA was down when compared to last year, with volumes totalling US$4.5 billion for Q1 2014.

Q1 2013 saw a number of large portfolio deals closing across the region, a situation that has not yet been repeated this

year due to the lack of portfolio opportunities coming to the market, although a significant number of portfolio loan note

sales are currently in process. We expect the situation to rebalance later this year as the pipeline starts to fill up.

The number of transactions in the region has increased – activity is now focused on single-asset sales, although interest

in portfolio platforms remains very high as new entrants seek to place capital.

Cross-border capital becomes active beyond the core markets

Offshore capital featured strongly in Q1 2014, representing more than 40% of all transactions in Europe. Middle Eastern

investors dominated the scene, acquiring not only in traditional markets such as the UK but actively exploring

opportunities in Spain and Italy; Greece is also appearing on the radar.

As previously anticipated, more U.S. investors are now keen on opportunities in Europe – the trend has translated into a

twofold growth in hotel trades with U.S. capital. Given continuing yield compression in the United States, opportunist

investors seeking yield are looking beyond traditional core markets as Ireland and Southern Europe comes back into

fashion.

Asian capital is also eager to tap into the region, having accounted for almost 30% of all transactions completed in

EMEA in Q1 2014 including, in Dubai, one of the largest ever acquisitions of a development scheme recorded (See Key

Transactions).

London remains a hotspot for hotel investment

London continued to attract the bulk of investment in Europe, with Q1 volumes exceeding US$860 million, up 8% from

Q4 2013 and 170% from Q1 2013. Although the largest source of investment in Q1 came from the UK domestic market,

Asian investment showed a threefold year-on-year rise in activity in the London hotel market and accounted for more

than one-third of all deals completed in the quarter.

Recovery in Spain and Ireland is being supported by new REITs formation

In some of the larger, more distressed markets, such as Spain and Ireland, we have witnessed significant interest from

both European and offshore investors, with these markets providing some interesting opportunities in terms of returns.

Barcelona, Madrid and Dublin accounted for more than US$300 million of investment activity in Q1 2014, a 52% uplift

on the same period a year ago.

This rise in activity will be supported further by the emergence of new REITs following each country’s implementation of

new REIT regimes in 2013. Two new REITs in Ireland – Green and Hibernia – are said to have already bid on some

hotel assets, whereas two Spanish REITs – Hispania Activos Inmobiliarios and Lar España Real Estate – went public

earlier this year having collectively raised more than US$1.2 billion, either via initial public offering or private placement

prior to their listing.



Momentum continues to build in Asia Pacific

Over the first quarter of 2014, investment in Asia Pacific totalled US$1.7 billion, demonstrating a 7% increase compared

to the same period last year. With market sentiment being positive and the overall interest of investors remaining high,

volumes are currently constrained by a lack of investment opportunities.

Improving market sentiment and a greater availability of financing has led to property and development companies

becoming particularly active on the buy-side, accounting for more than half of all transactions completed in Q1 2014. On

the sell-side, hotel operators were the most active, representing one-third of all investment in the region as they

selectively disposed of some of their non-core assets.

Although activity in the Asian market was largely driven by single-asset transactions, Q1 registered a number of portfolio

deals, with the sale of Amanresorts, a luxury hotel group, being the most notable (See Recent Key Investment

Transactions).

Investment activity spreads across the Asia Pacific region

In terms of geographies, activity in Q1 continued to be concentrated in four markets – China (32%), Japan (18%),

Malaysia (16%) and Australia (12%).

Investment volumes in China increased almost 90% on Q1 2013, mainly on the back of two notable transactions

completed by Shanghai Jin Jiang International Hotels, China's largest hotel management company.

Japan was the second largest market with volumes totalling US$312 million, a 50% decrease on Q1 2013. Last year

was particularly successful for Japan with a number of large assets changing hands. Despite this, Japan continues to be

in the spotlight with growing interest from offshore investors and, as a result, deal flow remains buoyant. Activity is

concentrated in the well-established markets of Tokyo and Osaka which together accounted for 60% of all hotel

investment in the country in Q1. Leisure markets are becoming more appealing for offshore capital as they offer

relatively high yields.

Both domestic and offshore capital are actively seeking opportunities in Australia. However, a lack of available stock,

with some sellers reluctant to relinquish assets in a generally rising market, continues to hamper growth in investment

volumes across the region.

Malaysia featured strongly in Q1 with a landmark deal completed in Kota Kinabalu, one of region’s growing resort

destinations that is benefiting from the robust expansion of outbound tourism from Northeast Asian countries such as

China, Hong Kong, Korea and Japan.

The Maldives is one of the world’s strongest gateway resort destinations. Average room rates significantly outpace all

other resort markets and a continued positive outlook has the islands firmly on investors’ radars, particularly those

belonging to purchasers from Asia and the Middle East.



Residential Markets

Strong start to year for the U.S. apartment market

Improving economic conditions and subsequent job growth are fuelling a rise in household formation across the United

States. As a result, increased renter demand continues to keep market conditions tight, with U.S. multifamily occupancy

at 95.9 % and rents at a 10-year high of US$1,083 per month. Even with the expanding number of new units being

delivered, unit absorption continues to outpace deliveries. In fact, U.S. occupancy has risen 10 basis points quarter-on-

quarter and 40 basis points on a year-on-year basis, while effective rents have climbed 3.2 % in the past year.

While all major U.S. markets have experienced tightening apartment fundamentals, the high-tech industry continues to

be a primary driver of renter demand, benefiting multifamily owners in certain metros. High-tech hubs such as Seattle,

San Francisco and Denver have witnessed some of the highest rental growth in the country. Additionally, economic

expansion within the Sunbelt continues to propel rental demand within secondary markets. The Inland Empire,

Houston, Las Vegas, Phoenix and Atlanta have seen absorption well above the national average.

U.S. for-sale market on the up, but still a long way to go

The U.S. residential sales market remains firmly in rebound mode, albeit with geographic and market segmentation.

During the first two months of 2014, the U.S. Census Bureau reported that 135,500 new units had been authorised, an

improvement of 4.5% compared to the same two months in 2013. However, this is well below historic norms and will

remain so in the coming years.

Home prices are still on the upswing. January 2014 marked the 23rd consecutive month of increase for the Case-Shiller

Index, which now stands 13.3% higher than January 2013. Even so, this is 18.7% below the Index’s April 2006 peak,

and the current rate of growth means that it will not be until 2015, at least, that home prices will begin to approach their

former highs. Interest rates are also beginning to rise, which may subdue potential gains to be made in those metro

areas still emerging from their cyclical lows.

Subdued residential sales in Asia

Limited high-end residential sales activity was seen in most Asian markets in Q1, with policy restrictions remaining in

place in various countries (e.g., Home Purchase Restrictions in China, extra stamp duties in Singapore and Hong

Kong, and tighter regulations on bank credit in Singapore). Both Singapore and Hong Kong witnessed a marginal

decline in prices in the first three months of the year, while Shanghai saw capital value growth (4.5%). For the

remainder of 2014, sales in the high-end residential segment are likely to remain similar to or slightly below levels of the

last 12 months. We expect flat prices in most markets this year, except for small falls in Hong Kong, Singapore and

Jakarta.

Broad-based recovery in Dubai residential

The Dubai residential market is now experiencing a broad-based recovery, with prices and rents picking up in most

locations. Average residential prices have increased by more than 30% in the year to April 2014 which has led to fears

of another bubble developing. JLL’s view is that the current levels of price increases are unsustainable and that the

market will see prices and rents rise at more modest levels in 2014. There is some anecdotal evidence that the

residential market is already cooling down, with lower levels of transactions reported in recent weeks.

UK house price growth accelerates further

A combination of government stimulus packages and more importantly, a more robust economic backdrop, continues to

drive price growth across nearly all regions of the UK. Most indices are showing national price growth in the high single-

digit range, with London price growth leading at around 14% per annum. Transaction levels have improved but supply

remains stubbornly slow in responding to the current strength of demand.



Recent Key Investment Transactions

Europe, Middle East and Africa

Country City Property Sector

Sales price

US$ m Comments

France Paris Coeur Defense, La Defense

Office 1,780

Lone Star has acquired Coeur Defense in Paris's financial district by negotiating a discounted pay-off with creditors and a recapitalisation of the special purpose vehicle which owned the office complex. The legacy equity was majority-owned by LBREP III, the Lehman Brothers private equity real estate fund. In 2007, Lehman Brothers had issued CMBS notes to help finance the €2.11bn acquisition of the property. When Lehman Brothers collapsed in September 2008, the building’s owners filed for protection from creditors in France but in 2013 the Court of Appeal of Versailles ruled that the loan underpinning the CMBS had to be repaid by July 2014. This opened the door for potential suitors with Lone Star being successful. BAML has underwritten the refinancing up to a quantum rumoured to reach 75% of the sale price.

Netherlands Belgium France

Various Pelican portfolio Industrial 270 JLL has advised PELP, the JV between Prologis and Norges, on the acquisition of a portfolio of logistics assets from Schroders. The assets are spread across the Netherlands, Belgium and France, and the price paid was circa €200m.

Germany Frankfurt/ Hessen

Leo 1 portfolio Office 1,370

Patrizia Immobilien has purchased a commercial real estate portfolio in Hessen. The ‘Leo 1’ portfolio comprises 18 office buildings which are leased to the federal state of Hessen on a long-term basis. It includes the building housing Hessen’s Ministry of Finance and the police headquarters in Frankfurt am Main. The overall portfolio has a market value of around €1bn and is being sold by a subsidiary of Commerz Real. Patrizia acquired a similar office portfolio with 36 office properties in Hessen (‘Leo II’) for circa €800m in autumn 2013.

Germany Oberhausen CentrO Shopping Centre

Retail 730

Unibail-Rodamco has entered into a partnership with CPPIB by buying Stadium Group’s remaining 50% stake in CentrO. Unibail-Rodamco is said to be paying circa €535m, reflecting a net initial yield of 4.4%. CentrO offers a 117,000 sq m shopping centre with 213 shops and 39 restaurants, a nine-screen cinema, a 12,000 seat multi-purpose arena, two theme parks and 12,000 car parking spaces. Retailers include Apple, Hollister, Superdry, Tommy Hilfiger, Peek & Cloppenburg and Lego.

Greece Vouliagmeni Astir Palace Resort

Hotels 550 Astir Palace Resort has been acquired by the Jermyn Street Real Estate Fund – an Arab fund which includes investors from the UAE, Kuwait and Saudi Arabia as well as the Turkish Doğuş Group.

Ireland Dublin Central Park Mixed 430 JLL has advised NAMA on the sale of Central Park, a business park south of Dublin city centre. The purchaser was Green REIT together with PIMCO and Kennedy Wilson. The price paid was €311.5m.

Poland Warsaw Rondo One Office 410

Deutsche Asset & Wealth Management has acquired Rondo One, an office building in the CBD, from BlackRock for circa €300m. The building comprises almost 70,000 sq m of office space over two buildings and includes 5,000 sq m of retail space on the ground floor.

Sweden Stockholm Portfolio Office 590

Klövern has bought Globen City, which comprises the properties Arenan 2, 3, 6 and 8, as well as Startboxen 3 in Solna for SEK 3,800bn. The total lettable area amounts to approximately 140,000 sq m and consists primarily of office space. The vendor was The Carlyle Group.

UAE Dubai Pearl Dubai, Media City

Mixed 1,900

Chow Tai Fook Endowment Industry Investment Development has acquired a US$1.9bn stake in the Dubai Pearl project from the developer Pearl Dubai. The purchase includes high-end residential and serviced apartments as well as two five-star hotels, and is the largest bulk asset sale within the 20 million sq ft development.

UK London Docklands

25 Cabot Square

Office 370 Hines Global REIT has purchased 25 Cabot Square in Canary Wharf for £223m. Morgan Stanley signed a sale and leaseback of the 450,000 sq ft office property, agreeing a new 15-year lease and selling for a net initial yield of 6.8%.

UK Various Portfolio Retail 1,440

Intu Properties has acquired three properties from Westfield, namely the Westfield Centre in Derby for £390.3m, the Sprucefield Retail Park in County Down for £69.8m, and Westfield's half share of the Merry Hill Centre near Dudley for £407.7m.




Sales price

US$ m Comments

UK Various Hyperion portfolio

Mixed 910

Legal & General has bought the Hyperion portfolio for £550m from Telereal Trillium. The portfolio comprises 55 assets and includes a number of landmark buildings in London, including 440 Strand, 63-65 Piccadilly and 97 New Bond Street. The assets are predominantly let to Royal Bank of Scotland until 2037 and have leases with annual RPI rental uplifts and average unexpired lease terms in excess of 22 years.

UK

Abingdon, Oxford, South Cerney, Witney, Wotton-Under-Edge

Four Pillars Hotels portfolio

Hotels 150 Starwood Capital Group has acquired UK hotel owner and operator Four Pillars Hotels for a reported £90m. The purchase relates to a mainly four-star portfolio of six hotels in Oxfordshire and Gloucestershire.

UK

Chesham, Daventry, Leatherhead, Reading, Waltham Cross

De Vere Venues portfolio

Hotels 385

Starwood Capital Group has acquired UK hotel and conference centre operator De Vere Venues from the De Vere Group. Barclays and RBS provided a £140m debt facility for the transaction, which comprises 23 owned/leased hotels with 2,433 rooms, predominately located in Greater London, and a further nine management and franchise contracts.

UK London London Marriott Hotel Grosvenor Square

Hotels 208

JLL Hotels & Hospitality Group has advised Strategic Hotels & Resorts on the sale of the five-star 237 bedroom London Marriott Hotel Grosvenor Square in Mayfair. The hotel has been acquired by the Hong Kong based Private Equity firm Joint Treasure with the benefit of a long-term management agreement to Marriott.

Asia Pacific


Sales

price

US$ m Comments

Asia Pacific Various Amanresorts portfolio

Hotels N/A

The chain of Amanresorts luxury hotels operating across the region in Indonesia, Bhutan, Philippines, Thailand, Cambodia, Laos, Sri Lanka and India has been acquired by a joint venture between Peak Hotels & Resorts and Amanresorts’ founder Adrian Zecha. The seller – DLF Group, an India-based real estate developer – has been selling a number of assets during the last three years in pursuit of deleveraging.

Australia Brisbane AM60 Office 145 JLL has advised DEXUS Wholesale Property Fund on the purchase of AM60 from LaSalle Australia Core Plus Fund for A$161m. The property is a 23-level Five-Star Green Star ‘A Grade’ office building with a GFA of 24,150 sq m.

Australia Melbourne Northland Shopping Centre

Retail 445

CPPIB has sold 50% of Northland Shopping Centre to GPT Wholesale Shopping Centre Fund for A$496m. A major shopping centre, located approximately 11 km north of the CBD, Northland dominates its trade area and has one of the highest moving annual turnovers among centres in Melbourne.

Australia Melbourne Axa Headquarters

Office 224 Commonwealth Property Office Fund has sold the Axa Headquarters building to GPT Group for A$249.5m. The property is a medium-rise office block comprised of four connected towers. The property includes retail space at street level.

Australia Sydney Piccadilly Centre

Office/Retail 174

JLL has advised Investa Office Fund on its purchase of 50% of Piccadilly Centre from Stockland for A$194m. The property comprises a 32-storey, grade A office building, a grade B office building and a two-storey retail mall. The asset is 93% occupied and has a weighted average lease expiry of 5.3 years.

Australia Sydney Energy Australia Building

Office 136 Ausgrid has sold Energy Australia Building to Far East Consortium for A$151.8m.

China Beijing Taikoo Li Sanlitun

Retail 262

Gaw Capital has sold 20% of Taikoo Li Sanlitun, an iconic shopping centre located in the heart of the entertainment zone in Beijing, to Swire for RMB 1.6bn. The partner-buyout of 20% shares in the property means it is now wholly owned by Swire.

China Beijing Guanjie Mansion

Office 177

Beijing Century Hengfeng Real Estate Development has acquired Guanjie Mansion from Citychamp Dartong for RMB 1.08bn. The property is sub-divided into 66 units and 111 parking lots. It is now wholly-owned by Beijing Century Hengfeng, who bought the first batch of 59 units in Q4 2013.




Sales

price

US$ m Comments

China Shanghai JC Mandarin Hotel

Hotel 347 Shanghai Jin Jiang International Hotels has sold JC Mandarin Hotel to BOCGI and a local developer for RMB 2.1bn. The hotel will be redeveloped into an office building. Jinjiang Group is restructuring its portfolio.

China Shanghai Calxon Global Tower

Office 285 Cura Fund has acquired Calxon Global Tower from China Calxon Group for RMB 1.7bn.

China Shanghai Galaxy Hotel and Jin Jiang Hotel

Hotels 200 Shanghai Jin Jiang International Hotels has disposed of a 100% equity interest in Shanghai Jin Yun Assets Management, the owner of the four-star Galaxy Hotel in Shanghai, for about US$200m.

Japan Tokyo Portfolio 3 Office/ Residential

1,794 Tokyo Tatemono and Hulic have sold Portfolio 3 for JPY 184.5bn and Nakano Central Park East for JPY 38bn to Axa Life Insurance.

Japan Tokyo Otemachi Tower

Office 1,733 Tokyo Tatemono and Taisei have sold 30% of Otemachi Tower to Mizuho Bank for JPY 178bn. The transaction is beween related companies and is one of the largest transactions so far in 2014.

Japan Tokyo Times Square Building

Retail 1,021 58% of Times Square Building has been acquired by Takashimaya Co., Ltd. from Tokyu Land Corporation for JPY 105bn. This property is a large retail complex located in the Shinjuku area.

Japan Tokyo G Building, Omotesando 2

Retail 342 Orix, Secured Capital and Trinity Investments have sold G Building to Mitsubishi Corporation for JPY 35bn. The property is located along Omotesando, one of the most expensive prime retail locations in Asia.

Japan Tokyo KDX Toyosu Gran Square

Office 337

Kenedix Private Investment has acquired KDX Toyosu Gran Square from The Carlyle Group and Korean National Pension Fund for JPY 34.6bn. The property is located outside the CBD in the Tokyo Bay Area. Kenedix originally sold this property to The Carlyle Group and Korean National Pension Fund for less than JPY 35bn in 2009, and has now repurchased it for almost the same price.

Japan Tokyo Kojimachi Millennium Garden

Office 258 Mori Trust has sold 62% of Kojimachi Millennium Garden to Nomura Real Estate Office Fund for JPY 26.5bn. This is the headquarters building of Orient Corporation (Orico) who will continue to be its occupier.

Malaysia Kota Kinabalu Sutera Harbour Resort

Hotels 280

The Singapore Exchange-listed property developer GSH Corp Ltd has acquired a 77.5% stake in the owner and operator of the Sutera Harbour Resort along with two separate land parcels of circa 10 hectares within the Sutera Harbour property for future development of luxury condominiums.

Singapore Singapore Westgate Tower Office 457

Infinity Office Trust has sold Westgate Tower to Sun Venture Homes and Low Keng Huat (LKH) for S$579m. Infinity Office Trust is a joint venture between CapitaLand, CapitaMalls Asia and CapitaMall Trust. The Tower is the office component of the Westgate integrated development that includes the seven-storey Westgate shopping mall with more than 250 stores.

Americas


Sales

price US$

m Comments

Brazil Belo Horizonte Boulevard Corporate Tower

Office 79 Kinea Investimentos has purchased the over 18,000 sq m office asset from Aliansce

Canada Montreal Quartier DIX30 Retail 175 Devimco Inc. has acquired a 50% interest in the more than 58,000 sq m retail asset in Brossard from RioCan REIT at a reported 5.4% initial yield.

Canada Toronto Blackberry 1-4 & 16

Office 37 The University of Waterloo has bought this office asset in its namesake suburb from Blackberry.

Canada Vancouver Merchant Square Office 26 Kingswood Capital Corporation and CRS Group of Companies have purchased this office asset from the City of Westminster in suburban Vancouver

Mexico Mexico City Bancomer Center Office 125 Mexican REIT Fibra Uno has bought the 89,000 sq m office building from Prudential Real Estate.




Sales

price US$

m Comments

Mexico Punta Mita Four Seasons Resort Punta Mita

Hotels 170

Strategic Hotels & Resorts, Inc., a real estate investment trust, has sold the Four Seasons Punta Mita resort and the adjacent La Solana land parcel to Cascade Investment. The sale includes 173 guest rooms and suites and a variety of resort restaurants and amenities, as well as a 48-acre developable site directly adjacent to the resort.

Puerto Rico San Juan

Renaissance La Concha San Juan Resort/ Condado Vanderbilt Hotel

Hotels 260

Paulson & Co. Inc., a New York-based investment firm, in partnership with International Hospitality Enterprises, has acquired a majority interest in two oceanfront resorts in San Juan for US$260m, including costs to complete the construction of the Vanderbilt.

United States East and West coasts

National Upscale Select Service portfolio

Hotels N/A JLL Hotels & Hospitality has advised OTO Development on the sale of a portfolio which consists of 15 Hilton, Hyatt and Marriott branded properties located along the country’s East and West coasts. Blackstone bought the portfolio.

United States Boston One Kendall Square

Office 395 At a reported initial yield of 6.6%, The Beal Companies has sold the Cambridge office building to DivcoWest Properties.

United States Various RLJ 10-hotel portfolio

Hotels 313 The portfolio comprises of 10 Hyatt, Hyatt Place and Hyatt House hotels with 1,560 rooms in total. The hotels are located primarily on the West Coast. RLJ has plans to spend approximately US$25m in capital expenditures across the portfolio.

United States Chicago Sofitel Chicago Water Tower

Hotels 153

On behalf of The Blackstone Group, JLL Hotels & Hospitality Group has sold Sofitel Chicago Water Tower Hotel. Ashford Hospitality Prime has purchased the asset for approximately $369,000 per key. The sale represents the largest single asset hotel transaction in Chicago since 2012 and comes on the heels of nearly US$420m in hotel dispositions in 2013. JLL also secured US$80 million of acquisition financing on behalf of the property’s new owners.

United States Houston Heritage Plaza Office 428 AEW Capital Management has bought a 90% interest in the more than 111,000 sq m office asset from Brookfield Asset Management at a reported 5.25% initial yield.

United States Los Angeles Two California Plaza

Office 298 Los Angeles-based CIM Group has purchased the nearly 119,000 sq m office tower from CWCapital.

United States Multiple National Embassy Suites portfolio

Hotels N/A

The 1,903-room portfolio comprises of Embassy Suites, one of which lost its flag and was sold as an independent that could be rebranded as an Embassy Suites. The portfolio offers strong in-place cash flow with the potential for significant RevPAR gains following completion of an upgrade programme. The buyer is AWH Partners, LLC – a privately held, New York-based, real estate investment, development and management firm.

United States New York Standard Hotel New York

Hotels 406

The 330-room hotel has been sold by hotelier André Balazs to Standard International, a hotel management company, for approximately US$1.2m a room. The creator of the Standard International, Balazs also sold an 80% interest in the brand last year.

United States New York InterContinental New York Barclay

Hotels 300

Constellation Barclay Holding US, LLC, an affiliate of Constellation Hotels Holding Limited, has acquired an 80% interest in the asset for US$240m, which values the hotel at US$300m prior to refurbishment. IHG will hold the remaining 20%. Together, the joint venture will own and renovate the asset, which is subject to a long-term management contract with IHG. JLL Hotels & Hospitality Group advised InterContinental Hotels Group on the sale.

United States New York The Factory Building

Industrial 102 Atlas Capital group has purchased this more than 95,000 sq m flex asset in Long Island City, Queens.

United States San Antonio Riverview Center Retail 176 Hines has acquired the nearly 74,000 sq m shopping centre from developer Thomas Enterprises.

United States Tampa International Plaza

Retail 498 TIAA-CREF has purchased from REIT Taubman Centers a 50% stake in the nearly 114,000 sq m mall at a reported 4.6% initial yield.

COPYRIGHT © JONES LANG LASALLE IP, INC. 2014.

This report has been prepared solely for information purposes and does not necessarily purport to be a complete analysis of the topics discussed, which are inherently unpredictable. It has been based on sources we believe to be reliable, but we have not independently verified those sources and we do not guarantee that the information in the report is accurate or complete. Any views expressed in the report reflect our judgment at this date and are subject to change without notice. Statements that are forward-looking involve known and unknown risks and uncertainties that may cause future realities to be materially different from those implied by such forward-looking statements. Advice we give to clients in particular situations may differ from

the views expressed in this report. No investment or other business decisions should be made based solely on the views expressed in this report

COPYRIGHT © JONES LANG LASALLE IP, INC. 2014.

This report has been prepared solely for information purposes and does not necessarily purport to be a complete analysis of the topics discussed, which are inherently unpredictable. It has been based on sources we believe to be reliable, but we have not independently verified those sources and we do not guarantee that the information in the report is accurate or complete. Any views expressed in the report reflect our judgment at this date and are subject to change without notice. Statements that are forward-looking involve known and unknown risks and uncertainties that may cause future realities to be materially different from those implied by such forward-looking statements. Advice we give to clients in particular situations may differ from the views expressed in this report. No investment or other business decisions should be made based solely on the views expressed in this report

Encouraging Signals from Corporate Occupiers...Global Office Completions, 2000-2015 24 markets in...

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