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Jones Lang LaSalle outlines USD$7.5 billion of capital for offshore investment into real estate by 2020.
EXPO REAL, 8 October 2013 – A new report released today by Jones Lang LaSalle's International Capital Group highlights the increasing amount of Australian capital expected to be invested into offshore commercial real estate markets by 2020. According to the report, ‘The rise, fall and future intentions of Australian offshore investment’, the bulk of this capital will come from Australia’s pension (Superannuation) system in which assets under management (AUM) are set to pass USD 2.8 trillion by 2020. AU$80 billion of this is likely to be available for overall offshore investment of which, by current measures, 10 percent will be allocated to international real estate.
Maintained by compulsory contributions, Australia’s Superannuation system is, by some measures, the fourth largest asset pool in the world with real estate accounting for around 10 percent of its current USD1.3 trillion Assets Under Management (AUM). Contributions are set to gradually increase to reach 12 percent of an individual’s salary by 2020, significantly increasing the amount of capital available for investment into international real estate markets.
Richard Bloxam, Head of European Capital Markets, Jones Lang LaSalle, commented, “With the Australian domestic market unable to offer sufficient opportunities to provide the real estate exposure sought by funds, European real estate markets are set to benefit with increased investment flows..”
Matt Richards, Head of the International Capital Group in Europe, Jones Lang LaSalle said, “Most Super Funds currently remain cautious on off-shore markets post the GFC. This has resulted in a strong domestic bias and increased appetite for direct ownership. We expect the next wave of offshore Australian capital to emerge in the form of Joint Ventures and dedicated investment mandates with specialist European fund managers.”
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