Market Data

International Beat

Scotland’s Big Deal

LaSalle Investment Management Kapitalanlagegesellschaft mbH recently purchased two retail properties in Scotland for a total of £58.6 million or more than $91 million. What do they have in common? Long-term leases. One store, in Glasgow’s Style Mile district, is occupied by Nike, which has a 15-year lease with an initial rent of £1.3 million. The other property, an eight-story mixed-use building in Edinburgh, has two tenants — New Look, a British fashion chain, and a Premier Inn Hotel — with 19-year-plus leases. The purchases reflect a net yield of 5.0 percent and 5.5 percent, respectively. The investment fund is targeting well-located office and retail properties with stable leases in Germany, France, and the U.K.

“Global multinational corporations are taking a longer view in terms of the office footprints in many of the growing emerging markets, signing longer-term leases and willing to accept higher premium pricing for prime space in the downtown markets.”
—CBRE Prime Office Occupancy Costs

Markets to Watch

Despite Europe’s economic woes, global investors continued to target select markets in the second quarter, according to Jones Lang LaSalle. Cross-border buyers and sellers were involved in 75 percent of 2Q12 transactions in the U.K. and France, nearly 70 percent in Russia, and more than 50 percent in Germany, all exceeding the 40 percent global average. London saw the most activity, including two portfolio sales — office and specialty — totaling nearly $2 billion. Overall, Europe saw an increase in inter-regional deals in 1H12, compared with a marked slowdown in cross-border investment in the Americas and Asia Pacific regions.


Guangzhou, China, also experienced an investment influx in 2Q12, making its first appearance on JLL’s top 10 “Most Active Cities” list, placing No. 6 after ranking 127th and 221st in 2Q11 and 1Q12, respectively. The city received a boost from major office and retail deals, including the $1.4 billion sale of the Guangzhou International Finance Centre and the $316 million sale of the Rock Square shopping center.

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