Global property transactions rebounded strongly in the last three months of 2009, with more than $147 billion of deals happening in the fourth quarter alone – an 85 percent increase on activity in the same period in 2008.
Figures from property data firm Real Capital Analytics show what many private equity real estate professionals already sense – that global property markets are beginning the slow road to recovery.
In Asia-Pacific, property deals rose 240 percent in the last three months compared to the fourth quarter of 2008, while UK activity rose 136 percent. Property deals hit a trough in the first quarter of 2009, when just over $50 billion of transactions took place worldwide.
However, despite the rising tide of transactions elsewhere, deals in the Americas were slow to get off the ground in the last three months of 2009. The region, specifically the US and Canada, saw a slight decline in transactions year-on-year in the fourth quarter with deals down by 6 percent.
Taking account of full year results, RCA said deal flow fell by 30 percent globally in 2009 compared to 2008, with transactions in the US down 67 percent, the UK down 20 percent, Western Europe down by 58 percent and Japan down by 49 percent. When compared to the troughs of early 2009, the latest signs should offer some signs of hope.
The only regions to witness rising deal volume were East Asia, where trades jumped 99 percent between 2008 and 2009 and Africa, which rose 187 percent (although the total value of property sales and purchases was just $2.2 billion for the whole of the past year).
Despite all the talk of distressed investing by real estate professionals in the past year, RCA noted that
few distressed sales have taken place. In Asia-Pacific just 2 percent of sales were considered distressed, compared to 4 percent in Europe, the Middle East and Africa region and 12 percent in the Americas.