Global Market Perspective Q3 2017 PDF

August 2017
Global Market Perspective

JLL Global Research
Contents
Global Market Perspective 3
Renewed momentum extends real estate cycle
Global Economy 7
World recovery gaining momentum
Global Real Estate Health Monitor 10
Sydney, Stockholm and Toronto lead office rental performance
Real Estate Capital Markets 11
Investment volumes stable as capital continues to seek real estate exposure
Capital Values and Yields 17
Office capital value growth bounces back as yield compression continues
Corporate Occupiers 19
Human experience driving corporate real estate strategy
Office Markets 21
Leasing volumes are steady; rental growth accelerates with new supply boosting asking rents
Retail Markets 33
Structural change leading to polarisation in demand
Industrial Markets 35
Tight supply and continued robust demand putting upward pressure on rents
Hotels Markets 37
Transaction volumes lower, but sentiment remains positive; hospitality sector performance resilient
Residential Markets 40
Rental growth decelerates in U.S. multifamily market; robust institutional investment in Europe
Key Investment Transactions in Q2 2017 43
London maintains position as top investment destination for second quarter
Illustrative Office Occupational Transactions in Q2 2017 48
Leasing activity strengthens in China’s Tier 1 cities
COPYRIGHT © JONES LANG LASALLE IP, INC. 2017. All Rights Reserved 2
Global Market Perspective | August 2017
Renewed Momentum Extends Real Estate Cycle

Market fundamentals remain robust
Renewed momentum in the global economy has provided fresh vigour to several real estate
markets. Office rental growth is accelerating once again on the back of robust leasing demand,
and projections for the full-year have been revised upwards. Improvements are most evident in
Western Europe which, together with China, has seen an impressive strengthening of leasing
activity so far in 2017. Meanwhile, strong rental uplifts have been recorded in the warehousing
sector in both the U.S. and Europe. The weight of capital seeking access to real estate continues to
increase, with deal flows in line with the solid levels of 2016.
Global Commercial Real Estate Market Prospects, 2017
Investment Capital values
Firm 6% Increasing
Leasing 2017 Rents

Stable prospects 3% Increasing
Vacancy rate Development

Rising 28% Peaking
Leasing, vacancy, development, rents and capital values relate to the office sector.
Source: JLL, July 2017
Investment volumes stable as capital targeting real estate continues to grow
Global transactional volumes have remained firm during the first half of 2017, coming in at US$297
billion, up 2% from the first half of last year. The second quarter saw a continuation of some of the
political tension which has dominated the headlines for much of the year; however, global markets
were largely unaffected as Q2 2017 volumes are 22% above the 10-year average for this period of
the year.
Geopolitics will continue to play a major role in determining investor sentiment and market
activity in 2017, while the prospects of tighter monetary policy will also impact on investment
decisions. Despite these challenges global real estate investment continues to be accretive; even
though yields are at their cyclical low, the weight of capital targeting the sector continues to
increase. And while concerns about oversupply have begun to affect occupier fundamentals in
certain global markets, global rental growth and capital value growth are expected to remain
positive in 2017. Given this, we anticipate that 2017 transactional volumes will be more or less in
line with the US$650 billion recorded in 2016.
Global office leasing activity remains steady
Office leasing activity has been remarkably stable during the first half of 2017, with global volumes
virtually unchanged on the same period of 2016. Western Europe (+8%), where employment
prospects and corporate sentiment have improved, has taken the lead in driving growth in leasing
activity during 2017.
Activity has also strengthened in China’s Tier 1 Cities (+57% year-to-date), Southern Europe (+35%)
and South East Asia (+17%), while there were signs of improvement in the UK market (+17%).
For the full-year 2017, we expect global leasing volumes to remain stable, matching the levels
recorded in 2016. Volumes are anticipated to be slightly higher than in 2016 in the United States,
stable in Europe and slightly lower in Asia Pacific.
Global Office Demand – Gross Leasing Trends, 2007 - 2017
45
millions sq m
42
39
Projection
36
33
30
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
24 markets in Europe; 50 markets in the U.S; 22 markets in Asia Pacific

Vacancy expected to rise, but Europe bucks the trend
The global office vacancy rate is stable at 11.9%, where it has remained for much of the past year.
Nonetheless, supply is expected to trend upwards during the rest of 2017, with both the Americas
(14.7%) and Asia Pacific (11.1%) already seeing an uptick in supply in Q2. By contrast, Europe has
witnessed a further fall in vacancy to 7.8%, and is likely to stay below 8% for the rest of 2017.
Office rental growth surprises on the upside
Rental growth has quickened in recent months, with annual growth for prime offices (across 26
major markets) accelerating in Q2 2017 to 3.4% (from 2.7% in Q4 2016). We have upgraded overall
growth forecasts for 2017 to 3%, with Sydney, Stockholm and Brussels projected to top the global
ranks for rental growth for the full year.
Structural change becoming more prominent in global retail markets
The continued growth of online sales, omni-channel retailing and technical innovations are
leading to a bifurcation in retail markets, as major retailers invest in their distribution networks
and rightsize larger store portfolios. At the same time, demand for quality retail that offers brand
experience and convenience remains strong.
Major markets in the U.S. are approaching their peak for the cycle with retail performance
expected to slow this year as same-store growth stagnates for many retailers and store closures
accelerate. Prime rents are still predominantly stable in Europe across all retail classes. In Asia
Pacific, F&B operators continue to be the most active segment.
Tight supply and continued robust demand boost rental growth in logistics markets
Strong online retail sales growth coupled with automation, digital alignment of distribution
processes and the need for new city logistics networks continues to propel robust occupier
demand.
Vacancy rates in the U.S. and Europe are expected to carry on edging downwards through the
second half of 2017, which is boosting rents. In the U.S., rents have reached an all-time high
following growth of 6.5% on an annualised basis, while in Europe the majority of markets are
predicted to record rental increases over the year.
Hotel transaction volumes muted, but sentiment remains positive
The international hotel investment market was muted during the first half of 2017 with
transactional activity totalling US$23 billion, 12% behind the same period last year. Despite
ongoing geopolitical uncertainty investor sentiment remains positive, with improving economic
prospects and bullish forecasts of hotel performance. Transactional activity is expected to pick up
in the second half of the year.
Growth decelerating in U.S. rental apartments on wave of supply
Rental growth slowed further to 2.9% during Q2 2017 in the U.S. multifamily market, the first
quarter to dip below 3% rental growth since year-end 2010. In spite of the overall declines in the
pace of rental growth, a number of markets in the West region and Sunbelt continued to see gains
in excess of 5% on the quarter.
Institutional investment remains robust in continental Europe, with elevated transactional

volumes in Germany and demand pushing yields to record lows in the Netherlands, while the UK
institutional investment market continues to expand rapidly.
In Asia Pacific, policy restrictions and limited supply have impacted sales volumes in Shanghai,
while strong demand boosted the market upswing in Hong Kong and market sentiment has
improved in Singapore.
Global Economy
World recovery gaining momentum in H1
After a healthy set of Q1 indicators, the April-June period has witnessed further consolidation in
the global economic recovery, which has again been seen in a broadly-based upturn in sentiment,
activity and trade. This has been noticeable not only in the developed world but also in emerging
markets, where the recovery in commodity prices has also been important. As a result, there has
been another modest upward shift in global expectations for the year ahead with tentative upside
emerging for 2018.
This improvement has occurred against a background of continued political headwinds in the
developed world, though these risks appear to be receding. In Europe, elections in the
Netherlands and France delivered decisive defeats for populist Eurosceptic parties and reinforced
EU unity. The Eurozone has also experienced an upturn in its economic fortunes over recent
quarters, which has been reflected in upgrades to forecasts for this year across the region, notably
in France and Germany.
The contrast with the UK is striking. A snap General Election in June was expected to consolidate
Conservative party rule in the run-up to Brexit. The resulting unstable minority government looks
weak, raising concerns about direction at a critical time as the UK prepares to leave the EU. Even
before the vote, more equivocal demand had led to a downgrade in expectations for growth and
the UK appears to be falling behind the pace of the Eurozone.
There has also been a slight cooling in U.S. prospects, although forecasts have been broadly stable
in Q2. This has been evident in financial markets, where the Trump rally has appeared to be
running out of steam over recent weeks, and also in softer-than-expected data. Underlying growth
remains solid, but it seems that much of the previous buoyancy in expectations reflected a belief
that the new president would deliver a fiscal stimulus. Given stalled progress in other legislation
any stimulus is now unlikely this year but may bring upside in 2018.
GDP Projections for 2017 in Major Economies – Recent Movements
Australia China France Germany India Japan UK U.S.

April 2017 2.8 6.5 1.4 1.8 7.2 1.4 1.9 2.1
July 2017 (Latest) 2.5 6.6 1.6 2.0 6.9 1.4 1.7 2.2
Change (bps) -30 +10 +20 +20 -30 0 -20 +10
Source: Oxford Economics, July 2017
Central banks ponder the QE retreat
The Federal Reserve raised U.S short-term interest rates by a further 25 bps as expected in June.
This was the second rise in 2017 and takes rates to a cycle-high of 1.00%-1.25%, though this is still
very low by any historical standards. Market expectations are still for just one additional hike later
in 2017, as the recent appearance of softer inflation readings and more uneven economic data are
also being reflected by bond market investors in lower long-term Treasury yields. Nonetheless, the
tightening cycle is expected to continue into the medium term.
The Fed has turned its attention to ‘normalising’ in the autumn – that is, selling back the vast
quantities of bonds accumulated during asset purchasing programmes following the GFC. The
impact of this is still disputed, with some fearing the shock could halt the fragile global revival and
others that it is essential to sustaining it. This debate has not just been confined to the U.S., as
central bank rhetoric has become more hawkish elsewhere, notably from the Bank of England and
ECB. But any upward movement in Eurozone, Japan and even UK policy rates still looks at least
several quarters away.
Modest uplift to the global outlook
Improved data for H1 2017 have led to an upward revision in global growth forecasts. The change
is not dramatic and the pace is set to remain below par by historic standards. However, after years
of disappointed expectations and below-trend activity, this development is encouraging. In
addition, the revival is synchronised with both developed and emerging markets projected to
experience a cyclical upturn over the next 18 months.
Asia Pacific will remain the most dynamic region in terms of output growth. Fears of a hard
landing in China have waned thanks to government stimulus and a revival in trade. This year,
output growth is forecast to stabilise at just below 7%, though the long-established trend of
secular slowdown is on course to resume in 2018. India will continue to lead demand in Asia. De-
monetisation and tax changes have had a short-term negative impact, but the Indian economy is
expected to emerge stronger from 2018. Japan has seen upgrades in the near term, though the
economy will struggle to escape the sub-1.5% growth rut of recent years.
The European recovery presents an important global upside. In Europe’s core, growth has been
supported by solid domestic demand and jobs growth. German growth tops out at 2% in the
current year, while lagging France sees further improvement into 2018. Outside the Eurozone, the
UK is expected to slow as Brexit proceeds. Although the UK’s slowdown is less severe than once
feared, activity dips to a five-year low in 2018 and there is downside potential if Brexit negotiations
become fractious.
An acceleration in Americas’ growth is still elusive as the U.S. expansion continues to be slower
than in previous cyclical upturns. Last year, the Trump administration raised expectations about
pushing growth to a higher level. But with any fiscal stimulus delayed and interest rates rising, the
forecast remains firmly sub-3% over the next two years at least, albeit with the rate of growth
improving from 2016.
Global Outlook, GDP Change, 2016 - 2018
2016 2017 2018

Global 3.1 3.5 3.7
Asia Pacific 5.5 5.4 5.3
Australia 2.5 2.5 2.4
China 6.7 6.6 6.1
India 7.9 6.9 7.4
Japan 1.0 1.4 1.3
Americas 0.8 1.9 2.5
U.S. 1.6 2.2 2.7
MENA 3.2 2.5 3.7
Europe 2.0 2.2 1.9
France 1.1 1.6 1.7
Germany 1.8 2.0 1.6
UK 1.8 1.7 1.5
Source: Oxford Economics, July 2017
Global Real Estate Health Monitor

Economy Real Estate Investment Markets Real Estate Occupier Markets
City
Metro City Investment Capital
Area Investment Volumes Value Prime Yield Rental Net Vacancy Supply
GDP Volumes Change Change Yield Gap Change Absorption Rate Pipeline
Beijing 7.1% 7.1 10% 0.5% 6.3% 267 -0.7% 6.7% 6.3% 15.5%
Boston 2.7% 12.6 3% -5.7% 4.1% 180 1.7% 0.8% 13.3% 2.1%
Brussels 1.6% 2.2 11% 15.2% 4.5% 370 9.1% 2.2% 8.8% 2.2%
Chicago 1.6% 8.4 -28% -3.3% 5.2% 290 9.4% 0.6% 15.0% 1.7%
Dubai 2.2% 1.0 23% 0.0% 7.5% na 0.0% na 14.0% 4.4%
Frankfurt 2.1% 5.6 29% 20.2% 3.5% 303 1.4% -0.8% 8.6% 2.0%
Hong Kong 2.8% 10.4 -15% 21.9% 2.9% 138 8.3% -0.4% 4.4% 4.3%
London 1.9% 28.6 -13% -8.3% 3.5% 231 -8.3% 0.5% 5.0% 4.7%
Los Angeles 2.5% 21.8 -1% -1.8% 4.3% 200 3.0% 0.5% 14.9% 1.3%
Madrid 3.6% 5.6 121% 15.3% 3.8% 222 8.1% -2.7% 11.3% 1.3%
Mexico City 2.9% 0.1 -88% -3.7% 7.6% 82 -1.1% 3.5% 14.0% 18.2%
Milan 1.6% 2.6 -21% 20.2% 3.8% 164 5.0% 0.5% 13.3% 2.0%
Moscow 1.2% 3.6 36% -6.3% 10.5% 281 -6.3% 2.1% 15.0% 5.7%
Mumbai 7.1% 0.2 -75% 2.3% 9.6% 246 1.2% 5.9% 16.8% 13.6%
New York 1.4% 26.9 -43% -4.9% 3.6% 130 3.8% 0.1% 10.6% 1.6%
Paris 1.5% 16.5 -32% 8.3% 3.0% 218 0.0% 1.0% 6.7% 2.7%
San Francisco 4.0% 8.7 32% -7.1% 3.8% 150 0.9% 0.1% 8.6% 6.6%
Sao Paulo -0.7% 0.6 131% -5.9% 10.3% 572 -1.0% 1.6% 25.3% 7.1%
Seoul 2.0% 14.1 59% -5.6% 4.4% 222 -7.5% 4.3% 11.2% 4.1%
Shanghai 6.6% 17.9 54% 0.0% 5.7% 210 -0.7% 11.9% 18.4% 36.4%
Singapore 2.7% 9.3 12% -0.9% 3.6% 149 -3.9% 2.0% 6.8% 10.1%
Stockholm 2.8% 3.6 -30% 25.6% 3.5% 285 17.2% 1.3% 7.6% 1.5%
Sydney 2.8% 7.3 -4% 22.8% 4.9% 234 32.4% 0.7% 7.0% 1.9%
Tokyo 1.1% 14.5 17% 3.1% 2.9% 282 1.4% 2.3% 2.9% 10.4%
Toronto 3.4% 7.2 -5% 17.4% 4.3% 254 9.8% 1.6% 9.7% 1.4%
Washington DC 1.9% 12.7 6% -2.7% 4.5% 220 4.2% 0.0% 16.8% 2.8%
Real estate data as at end Q2 2017.

See page 50 for definitions and sources.
Real Estate Capital Markets

Investment Volumes
Despite an elongated cycle, real estate remains attractive to global capital
Global transactional volumes remained stable in the second quarter of 2017, coming in at US$153
billion, unchanged from the levels recorded in Q2 2016. This brings H1 2017 volumes to US$297
billion, up 2% from the first half of last year. The second quarter saw a continuation of some of the
political tension which has dominated the headlines for much of the year, particularly in France,
the U.S. and the UK. However, the positive election results in France reassured investors that the
European Union was not in danger of further turmoil. Global markets were largely unaffected, as
Q2 2017 volumes are 22% above the 10-year average for this period of the year.
U.S. market continues to cool
The only region to post year-on-year declines, the Americas saw Q2 investment activity slide by 7%
to US$64 billion compared to a year ago, bringing first half volumes down by 6% to US$122 billion.
Driving the downward movement was the U.S., where second quarter volumes fell by 7% to US$59
billion, resulting in H1 volumes decreasing by 10% to US$110 billion. Q2 volumes in Canada rose
by 5% compared to a year ago and while the Latin American markets are mixed compared to Q2
2016, all markets in the Americas outside the U.S. are up over the first half of 2017.
Germany and the Netherlands push Europe ahead
A strong second quarter saw European investment volumes edge up 4% compared to this time last
year to US$58 billion. Combined with a similarly positive start to the first quarter, activity in H1
2017 is up 7% from H1 2016 at US$114 billion. Volumes in Germany jumped by 25% to their second
highest recorded level in the first half of the year, while a robust Q2 helped volumes in the
Netherlands climb by 53% to reach their third highest first half. H1 gains in Spain (+51%), Russia
(+31%) and Finland (+20%) were balanced by dips in France (-16%) and Sweden (-7%). In the UK,
markets continued to shrug off political uncertainty as H1 2017 investment activity rose by 18% to
its third highest level on record in local currency terms.
China leads the charge in Asia Pacific
After a muted start to the year, Q2 investment volumes in Asia Pacific rose by 10% year-on-year to
US$31 billion, bringing first half volumes 13% higher than last year to US$61 billion. Robust
investment in China boosted quarterly volumes by 33% to US$8 billion, leading to a first half
increase of 36%. In Japan, a strong Q1 helped lift H1 volumes by 15%, with Q2 volumes increasing
by 10%. By contrast, Singapore recorded a 3% drop in H1 2017 volumes, with activity not able to
keep up with the vigorous first half of 2016. Australia is up on last quarter (+94%) but down on the
first half of last year (-5%).
Investment growth expected to be flat in 2017
Geopolitics will continue to play a major role in determining investor sentiment and market
activity in 2017. While the recent French elections passed without too much turmoil, the
continuation of the Brexit process coupled with a newfound tension in relations between the U.S.
and many of its allies across the world has given investors cause for concern. Alongside the
geopolitics, central bankers in many developed economies continue to give strong signals that
policy normalisation is around the corner. Discussions of a possible slowdown in quantitative
easing by the ECB rattled markets, while the Federal Reserve has discussed unwinding its stimulus
programme in ever clearer terms. With tapering likely to start at the end of 2017 or early 2018, the
prospects of tighter monetary policy will play an increasingly important role in determining
investment decisions.
Despite these challenges, global real estate investment continues to be accretive; even though
yields are at their cyclical low, the weight of capital seeking access to the sector continues to grow.
And while concerns about oversupply have begun to affect occupier fundamentals in certain
global markets, global rental growth and capital value growth are expected to remain positive in
2017. Given this, we anticipate that 2017 transactional volumes will be more or less in line with the
US$650 billion recorded in 2016.
Direct Commercial Real Estate Investment, 2006 - 2017
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (F)
800
US$ billions
~0%
700
600
500
400 -0-5%
~0%
300
200 ~0%
100
0
Americas EMEA Asia Pacific Global
Direct Commercial Real Estate Investment – Regional Volumes, 2016 - 2017
% change % change % change

US$ billions Q1 2017 Q2 2017 Q1 17-Q2 17 Q2 2016 Q2 16-Q2 17 H1 2016 H1 2017 H1 16-H1 17
Americas 58 64 10% 69 -7% 130 122 -6%
EMEA 56 58 3% 56 4% 106 114 7%
Asia Pacific 29 31 6% 28 10% 54 61 13%
Total 144 153 7% 153 0% 290 297 2%
Direct Commercial Real Estate Investment – Largest Markets, 2016 - 2017
% change % change % change

US$ billions Q1 2017 Q2 2017 Q1 17-Q2 17 Q2 2016 Q2 16-Q2 17 H1 2016 H1 2017 H1 16-H1 17
U.S. 51.2 58.8 15% 63.5 -7% 122.0 110.0 -10%
UK 15.4 17.7 15% 15.0 18% 31.9 33.1 4%
Germany 12.3 11.3 -8% 10.5 8% 18.9 23.6 25%
Japan 11.3 8.2 -28% 7.4 10% 17.0 19.5 15%
China 4.4 8.0 82% 6.0 33% 9.1 12.4 36%
Australia 2.5 4.9 94% 4.4 10% 7.8 7.4 -5%
Netherlands 2.1 4.6 118% 2.8 62% 4.4 6.7 53%
Canada 5.3 4.2 -21% 4.0 5% 6.6 9.6 44%
France 5.1 3.9 -24% 7.1 -45% 10.7 9.0 -16%
South Korea 4.9 3.4 -30% 3.1 10% 5.8 8.3 43%
Italy 1.9 3.4 74% 2.4 41% 4.7 5.3 13%
Spain 2.9 3.0 4% 1.7 75% 3.9 5.9 51%
Singapore 2.0 3.0 52% 4.4 -33% 5.1 4.9 -3%
Hong Kong 2.7 2.4 -11% 1.6 54% 5.1 5.2 1%
Sweden 2.7 2.3 -13% 2.5 -9% 5.4 5.0 -7%
Norway 1.8 2.0 7% 1.6 20% 3.4 3.8 12%
Regions in focus
Americas’ investment activity slows but steady finish for 2017 expected
Regional investment in Americas’ real estate reached US$122 billion in H1 2017, down 6% from the
same period in 2016. Within the U.S., transaction volumes also declined, falling 10% year-on-year
to US$110 billion in the first half of 2017. Contributing factors behind activity slipping from the
cyclical high of 2015 include greater discipline in asset selection by domestic U.S. investors, together
with a relative shortage of available product for sale in some primary markets.
Elsewhere in the Americas, Canada experienced healthy investment levels in the second quarter,
with transactional activity 5% above Q2 2016 at US$4.2 billion. With the economic outlook
brightening and a transition to stronger property market fundamentals underway, the Canadian
investment market may be especially well-positioned in the broader North American context.
In Latin America, investment volumes remained relatively subdued in the second quarter;
however, the two largest markets have year-to-date volume totals that are at least double those in
H1 2016. In Brazil, the office sector dominated trading in the second quarter, while hotel
investment was the driver behind transactional activity in Mexico during the period. Both
countries appear poised for increased investment levels in the second half of 2017.
A continued healthy investment market is expected for the rest of 2017 in the region. The
dominant U.S. market is projected to remain down moderately in transaction levels due to greater
selectivity by domestic institutions and relatively tight product supply in some markets. However,
global investors are anticipated to carry on prioritising the U.S. market for capital deployment in
the property asset class, which is still well positioned for strong returns in relation to other asset
classes. Somewhat more robust investment activity growth may be found outside the U.S., as
Canada and Latin America’s economic prospects have improved or stabilised, and transaction
volumes for the Americas are forecast to finish the year only slightly lower than in 2016, with a
decrease of up to 5%.
EMEA investment volumes on the rise in Q2 2017
EMEA investment volumes reached US$58 billion in a very active Q2 2017, edging up 4% compared
to the same quarter last year. Weaker second quarter investment activity in France (-45% year-on-
year) was compensated for by a solid performance from Europe’s growth engine Germany, which
reported an 8% annual increase. The UK market performed quite well, registering volumes of
nearly US$18 billion in Q2, a rise of 18% year-on-year in dollar terms, and 33% in local currency.
Southern Europe outperforms, while Russia capitalises on higher yields
Southern Europe saw investment levels jump 58% year-on-year, supported by significant increases
in Spain (+75%) and Italy (+41%). Greece, which has witnessed more investment flowing in, posted
investment volumes of nearly US$400 million in the quarter (compared to only US$38 million in Q2
2016), spread over a growing number of deals and sectors.
Overall investment activity across Central and Eastern Europe (CEE) was down by 5% year-on-year
(to US$3.4 billion). This was mainly due to the weaker performance of the Polish market (-28%).
Russia, on the other hand, saw a healthy nearly US$1 billion increase in volumes compared to Q2
2016, in what amounted to a 285% spike in investment activity.
Elsewhere in Europe, the Nordics saw transactional activity increase 6% year-on-year in Q2 2017,
with growth in Finland (+111%) and Norway (+20%) balancing declines in Sweden (-7%) and
Denmark (-28%).
London maintains position at top of global rankings
Investment volumes in London rebounded by 32% year-on-year in Q2 2017, helping push first half
volumes 33% higher as it maintained its position as the top global investment destination for a
second quarter. New York remained in second place, despite transactional activity declining by
54% in H1. North American markets accounted for the majority of leading cities with several
recording robust growth, including Vancouver, Boston, San Francisco, Atlanta and Dallas. In Asia
Pacific, Shanghai posted its strongest first half on record as volumes increased by 86% over the
same period last year.
Direct Commercial Real Estate Investment, Top 20 Cities, H1 2017

London
New York
Los Angeles
Boston
Tokyo
Shanghai
Washington DC
Seoul
Hong Kong
Singapore
Paris
Silicon Valley
Sydney
Dallas
Yokohama
Seattle
Toronto Americas
EMEA
Atlanta
Asia Pacific
San Francisco
Vancouver US$ billions
0 2 4 6 8 10 12 14 16 18
Transactional activity stronger in the Asia Pacific region
Investment volumes across Asia Pacific’s commercial real estate markets came in at US$60.7
billion during H1 2017, up 13% from the same period a year ago, and are looking on track to
reach our full-year forecast of US$130 billion. China led performance during the first half of the
year, but transactional activity was also higher in South Korea and Japan and largely stable in
Australia, Hong Kong and Singapore.
Cross-border investment volumes remained firm during H1 2017, accounting for 30% of total
transaction volumes. Inter-regional purchasers were active, particularly in India, China and
Australia, representing nearly one-half of all cross-border purchaser activity.
Domestic buyers dominate in Japan
Japan recorded US$19.5 billion worth of transaction volumes in the first half of 2017, up 15%
year-on-year. Domestic buyers dominated the market with J-REITs comprising close to 30% of
total activity, but some offshore investors became more active in non-core locations.
Transaction volumes for the full-year 2017 (in yen terms) are likely to be similar to last year’s
level. Although there are still limited opportunities, particularly for new entrants, more owners
seem willing to sell instead of refinancing their assets.
Cross-border capital maintains interest in Australia
Investment volumes in Australia came to US$7.4 billion in H1 2017, down slightly by 5% year-on-
year. A significant proportion of demand was from offshore capital sources, with cross-border
buyer activity making up one-third of total transactional activity and outpacing cross-border
sellers by almost two to one. We expect transaction levels to remain elevated over the
remainder of 2017.
Strong start to 2017 for foreign buyers in China
China registered US$12.4 billion worth of transaction volumes in the first half of 2017, up 36%
year-on-year. Foreign buyers have had a strong start to 2017, accounting for one-third of total
transactional activity in Q2. Looking ahead, the investment market is likely to remain stable as
domestic money will aim to invest locally following the introduction of capital outflow
restrictions. Domestic developers, in particular, are expected to become a new pool of buyers
for existing assets as they seek to deploy excess capital.
Direct Commercial Real Estate Investment – Quarterly Trends, 2007 - 2017
Capital Values and Yields

Bounce back in capital value appreciation
Capital value growth for prime assets in 26 major office markets bounced back to 4.5% in the year
to Q2 2017, reversing a deceleration since early 2016. The improvement was largely due to income
growth. Capital value growth is expected to increase further to around 6% for the full year.
Several office markets have registered exceptional capital appreciation over the past year, notably
Stockholm (+26%), Sydney (+23%), Hong Kong (+22%), Milan (+20%) and Frankfurt (+20%).
By contrast, prime notional capital values are correcting in some U.S. markets (as prime yields
shifted slightly in late 2016 into early 2017), as evident in San Francisco (-7%), Boston (-6%) and
New York (-5%).
Further yield compression
Further prime office yield compression has been recorded in Brussels (25 bps), Stockholm (25 bps),
Hong Kong (25 bps), Sydney (20 bps) and Milan (15 bps). Yields are largely flat in the U.S. gateways.
Only Mexico City and Boston have seen yields move outwards over the past quarter.
Prime Office Yield Shift, Q2 2016 – Q2 2017
Brussels Q1 2017 - Q2 2017

Frankfurt
Q2 2016 - Q1 2017
Europe
London
Madrid
Milan
Moscow
Paris
Stockholm
Boston
Chicago
Americas
Los Angeles
New York
San Francisco
Toronto
Washington DC
Sao Paulo
Mexico City
Beijing
Asia Pacific
Hong Kong
Mumbai
Seoul
Shanghai
Singapore
Sydney
Tokyo Basis point change
-90 -70 -50 -30 -10 10 30 50 70
Prime Office Yields, 2007 - 2017
Mean Prime Office Yields*

% 7.1 6.87%
6.6
6.1
5.49%
5.6
5.1
4.6
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
'07 '07 '07 '07 '08 '08 '08 '08 '09 '09 '09 '09 '10 '10 '10 '10 '11 '11 '11 '11 '12 '12 '12 '12 '13 '13 '13 '13 '14 '14 '14 '14 '15 '15 '15 '15 '16 '16 '16 '16 '17 '17
bps 70
50
30
10
-10
-30
Yield Compression (bps)
*Across 21 major office markets

Corporate Occupiers
Occupier activity remains robust
Corporate occupier activity has remained robust across key global markets. In Asia Pacific overall
leasing activity is relatively stable as Delhi continued to be the regional leader in total volume
leased, while Melbourne, Singapore and China’s Tier 1 cities have also seen strong growth in
leasing over the first half of 2017.
In the U.S., continued economic and business expansion is evident despite political headwinds,
and an unprecedented focus on talent attraction and retention are key themes shaping occupier
activity. Leasing activity and net absorption during Q2 increased from the previous quarter,
although were below the levels seen in 2015 and 2016.
An improving economic environment and corporate sentiment in Europe pushed office take-up to
3.0 million square metres in Q2 2017, the highest second quarter since 2006.
Human experience driving corporate real estate strategy
An increased focus on talent and productivity within corporate strategy has contributed to a
growing emphasis on employee experience.
In response to this shift, JLL has carried out a unique global research project to decode the
workplace experience, understand its specific impact on business performance and work out how
real estate can help achieve strategic performance objectives.
The results of our research project have pinpointed three priorities to drive human experience for
corporate occupiers. Key recommendations include:
■ Engagement
 Introducing innovative workspaces will drive engagement
 Use workspace to foster an entrepreneurial spirit to attract and retain employees
 Consider adjusting workplace density to improve employee effectiveness
 Formalize human experience in the organizational structure
■ Empowerment
 Trust, kindness and taking initiatives — the top three work philosophies — will
empower employees
 Agility — the choice to work elsewhere will improve performance and quality of life
 Employees appreciate space for concentration, regeneration and movement
■ Fulfilment
 Happiness is the number one priority for a positive workplace experience
 Companies must consider spaces dedicated to health and well-being
 Managerial approaches linked to recognition and personal learning and
development also impact employee fulfilment
Global Office Market Conditions Matrix*, 2017 - 2019
2017 2018 2019 2017 2018 2019 2017 2018 2019

Chicago Brussels Beijing
Los Angeles Frankfurt Hong Kong
New York London Mumbai

(West End)
San Francisco Madrid Shanghai
Toronto Moscow Singapore

(CBD Overall)
Washington DC Paris Sydney
Mexico City Stockholm Tokyo

(CBD 5-kus)
Tenant Favourable
Sao Paulo Dubai
Neutral Market
Landlord Favourable
*Relates to conditions in the overall office market of a city. Conditions for prime CBD space may differ from the above.
Office Markets
Office Demand Dynamics
Global office leasing activity is steady
Office leasing activity has been remarkably stable during the first half of 2017, with global volumes
virtually unchanged on the same period of 2016. Western Europe (+8% year-on-date), where
employment prospects and corporate sentiment have improved, has taken the lead in driving
growth in leasing activity during 2017.
At a sub-regional / country level:
■ Activity has strengthened in China’s Tier 1 Cities (+57% year-to-date), Southern Europe
(+35%) and South East Asia (+17%). There were also signs of improvement in the UK
market (+16%).
■ Volumes remain firm in Core Europe (+3%) and Australia (0%), but have moderated slightly
in the United States (-3%) and India (-3%).
■ Of the major economies, only Japan has seen notably lower volumes in 2017 (-58%), in
part due to supply shortages in existing buildings in Tokyo.
For the full-year 2017 we expect global leasing volumes to remain steady, matching the levels
recorded in 2016. Volumes are projected to be somewhat higher than in 2016 in the United States,
stable in Europe and slightly lower in Asia Pacific.
Western Europe take-up highest Q2 since 2006
After a strong first quarter, robust occupier demand pushed European office take-up to 3.0 million
square metres in Q2 2017. Total take-up across Europe in H1 2017 is now 4% higher than a year
ago, and is 8% higher in Western Europe. By contrast, take-up in Central and Eastern Europe has
fallen by 14%:
■ Germany has seen volumes increase a further 5% (year-to-date) on the record levels of
2016. Berlin is the most active leasing market, while Hamburg has registered the strongest
growth in take-up so far in 2017. Take-up in Germany is expected to remain healthy for the
remainder of the year, although a repeat of the record 2016 outcome is unlikely.
■ The vigorous momentum recorded in Paris in Q1 slowed somewhat in Q2 2017, but

uncertainty ahead of the French presidential elections may explain some of this
deceleration. Nonetheless, volumes in H1 are still 4% higher than a year ago and we
predict the continued strengthening of employment growth and corporate sentiment to
push take-up to around 2.3 million square metres for the full-year 2017.
■ Volumes in London in H1 are 11% higher than a year ago. The serviced office sector has
accounted for around 35% of London’s take-up in response to increasing requirements for
flexible space.
■ The Dutch cities have posted strong leasing market activity, with volumes up 41% in H1.
While Amsterdam has taken the lead, activity is now expanding in other Dutch cities such
as The Hague and Rotterdam.
■ Other European cities registering vigorous growth in leasing volumes in 2017 to date
include Edinburgh (+70%), Dublin (+64%), Barcelona (+47%), Madrid (+35%) and Milan
(+26%).
Leasing activity bounces back in the United States
After a slow start to the year, the U.S. office market rebounded during the second quarter on the
back of sustained tenant demand, consistent economic fundamentals and a raft of new supply
coming to the market. Office leasing activity saw a modest bump of 4% over the quarter, with a
diverse set of geographic and industry contributors.
Although tech remained the largest industry by volume, its share of transactions (17.4%) fell below
previous quarters as hiring constraints, uncertainty over immigration and visa policies, and a
broader cooling throughout the sector limited its dominance during Q2. A bevy of large leases
from financial firms points to strength in an industry that is heavily exposed to rightsizing and
automation.
Despite a return to healthier levels during the second quarter, net absorption has become
increasingly unstable at the market level:
■ 55% of occupancy growth so far this year has come from two markets – Seattle and Dallas
– powered by organic tech and corporate expansion that continues apace.
■ Secondary markets such as Austin, Raleigh-Durham, Oakland-East Bay, Denver and
Charlotte have also made further strides this year. Notably, absorption continues in these
metro areas, despite significant tightening and rental growth, as their talent pools and
relative cost advantages compared to gateway markets make them attractive for
occupiers in knowledge-intensive and creative industries.
■ By contrast, year-to-date absorption has been negative in certain key markets, including
Silicon Valley and San Francisco which previously led much of the recovery and were
consistently among the top contributors to national net absorption.
Supply and demand dynamics balanced across most Asia Pacific markets
Although leasing activity declined by 13% year-on-year in Asia Pacific in Q2, volumes were down
only 2% in the first half of the year, indicating stable leasing levels across the region. Delhi has
continued to be the regional leader for leasing volumes, while Bengaluru, Manila and Guangzhou
have also seen strong new leasing so far in 2017. However, sluggish tenant demand has impacted
leasing activity in Seoul and Taipei.
■ Aggregate gross leasing for the four India Tier 1 cities registered a small 3% decline in H1
2017. Traditional sectors remained the primary demand drivers; however, co-working
operators have started to be major contributors of space take-up. Uncertainty
surrounding U.S. offshoring policy and automation has seen ITES firms exercise caution.
■ Leasing activity was higher in all three China Tier 1 cities. Domestic financials, insurance,
real estate and tech firms drove leasing activity across these markets. At the same time,
Hong Kong has witnessed strong demand from financial firms from the PRC.
■ A lack of available space in existing buildings and upcoming supply in Japan’s core areas
continued to impact leasing activity in the Grade A segment in the first half of the year.
■ Gross leasing volumes in H1 2017 in Singapore were notably higher than a year earlier,
bolstered by large deals on recently completed or upcoming buildings as tenants take
advantage of lower rents to lease high-quality space.
■ Aggregate gross leasing volumes in Australia during H1 2017 were flat on a year ago.
Demand is strong and broadly-based in Melbourne (up 78% in H1), with centralisation a
key theme. In Sydney, however, gross leasing was 33% lower than a year earlier due to a
high base effect as leasing levels in H1 2016 were bolstered by pre-leasing in new
developments.
Asia Pacific leasing volumes this year are likely to be marginally lower (0% to -5%) than in 2016, with
upside potential for improved activity by year-end.
Global Office Demand – Gross Leasing Volumes Change, H1 2016 – H1 2017
China
UK
Germany
France
Projection
Australia
United States
India Americas
EMEA
Asia Pacific
Japan
% change
-60 -50 -40 -30 -20 -10 0 10 20 30 40 50 60
Based on 6 cities in Australia; 3 cities in China; 2 cities in France; 5 cities in Germany; 4 cities in India; 1 city (Tokyo) in Japan; 50 cities in
the United States; 2 cities in the UK
Global Office Demand – Annual Gross Leasing Volumes, 2007 - 2017
45
millions sq m
42
39
Projection
36
33
30
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
24 markets in Europe; 50 markets in the U.S.; 22 markets in Asia Pacific

Global Office Demand – Quarterly Gross Leasing Volumes, 2012 - 2017
11
millions sq m
10
7
Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217
24 markets in Europe; 50 markets in the U.S.; 22 markets in Asia Pacific

Office Supply Trends
Global office vacancy rate stable at 11.9%, but trending upwards
The global office vacancy rate is stable at 11.9%, where it has remained for much of the past year.
Nonetheless, supply is expected to trend upwards during the rest of 2017, with both the Americas
(14.7%) and Asia Pacific (11.1%) already seeing an uptick in supply in Q2. By contrast, Europe has
seen a further fall in vacancy to 7.8%, and is likely to stay below 8% for the remainder of 2017.
European vacancy edges down to 7.8%
European office vacancy, at 7.8%, is at its lowest since Q4 2008. Robust leasing activity is offsetting
higher development completions and vacancy has fallen in the majority of markets:
■ Some of the largest falls over the past year have been recorded in the Dutch cities.
Amsterdam has seen vacancy fall by one-third over the past year and, at 8.3%, vacancy is
at its lowest since 2002.
■ The German cities of Berlin, Munich and Hamburg continue to register reductions in
supply. In fact, Berlin and Munich, at 4.1% and 4.0% respectively, command Europe’s
lowest vacancy rates. With development activity set to increase across the ‘Big 5’ German
cities, vacancy rates are likely to stabilise towards the end of 2017.
■ In London and Dublin, vacancy is trending upwards as new space comes on stream. In
London the vacancy rate now sits at 5%, the highest rate since 2014 but still below the
long-run average.
Total 2017 completions in Europe are expected to reach 5.1 million square metres, which is around
25% ahead of the five-year average. At 5.2 million square metres, the 2018 development pipeline
will be just as significant, with the majority of completions concentrated in Paris, London, Moscow,
Luxembourg and Munich.
European office vacancy is projected to remain stable at 7.8% in 2017, as higher completions are
balanced by solid leasing activity. Expansionary demand will keep vacancy rates on a downward
trajectory across most of Western Europe.
Supply volumes mixed; Asia Pacific vacancy rate rises slightly to 11.1%
Vacancy rates continued to decline in about half of Asia Pacific markets during Q2 2017; at the
same time a fifth of them saw even higher vacancy, with those in Beijing having increased the most
over the quarter.
The Asia Pacific regional vacancy rate is forecast to push up to around 12% by the end of 2017,
with Jakarta, Singapore and Ho Chi Minh City all expected to register a notable increase in
vacancy.
U.S. construction altering the market landscape
The surge of ground-breakings that began in 2014 and 2015 is now beginning to provide some
relief in a number of U.S. markets, which will help to spur leasing activity that has been hindered
by a lack of options and cost concerns.
Due to rising new deliveries and more muted net absorption the national vacancy increased for the
third consecutive quarter in Q2 2017, registering a 10 bps rise to 14.8%. The rise in vacancy has
been particularly noticeable in tech hubs: Sunnyvale in Silicon Valley, for instance, has seen
vacancy rise from 8.9% to 14%.
With nearly 8 million square metres of deliveries expected over the next six quarters, of which about
half is currently available, dynamics will change markedly in terms of landlord/tenant leverage,
paving the way for a more balanced and competitive marketplace.
Canada’s office market steady with stronger demand ahead
The Canadian office market loosened marginally in the second quarter, with total vacancy
increasing 10 bps to 12.2%. The national market continues to be sharply divided in performance
between the robust leasing markets in Vancouver and Toronto, and the challenged energy-focused
markets of Edmonton and Calgary. Montreal is beginning to show increasingly positive signs with
its single strongest quarter of net absorption in well over a decade.
Mexico City stable as construction wave to crest in second half of 2017
Mexico City has seen its vacancy rate remain steady at 14% in Q2 2017 as demand continues to be
resilient in the face of heavy supply additions. Rental rates have kept largely stable, declining only
very modestly over the course of Q2. With deliveries continuing to ramp up, the vacancy rate is
poised to increase into 2018, with downward pressure on rental rates anticipated.
New supply winding down and demand outlook brighter in Brazil
As the development pipeline empties and economic growth returns, it’s likely that in 12-18 months
the leasing market in Sao Paulo will be in substantially greater balance than it is today. Rental
rates are already close to the cyclical trough in the market, and broad stabilisation is approaching.
Dubai vacancy trends downwards
With limited levels of new supply entering the Dubai market, vacancies have generally trended
down to 14% in the CBD, 2% lower than the same period last year and the lowest level since before
the Global Financial Crisis.
Global Office Completions, 2000 - 2019
20 U.S. Europe Asia Pacific

millions sq m
15 Average
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
(F) (F) (F)
24 markets in Europe; 25 markets in Asia Pacific; 50 markets in the U.S. Asia relates to Grade A only.
Office Supply Pipeline – Major Markets, 2017 - 2018
Shanghai
Mexico City
Beijing
Mumbai
Tokyo
Singapore
Sao Paulo
San Francisco
Moscow
London
Dubai
Hong Kong
Seoul
Washington DC
Paris
Brussels
Boston
Frankfurt
Milan
Sydney
Chicago
New York
Stockholm
Toronto 2017 2018
Madrid
Completions as % of existing stock
Los Angeles
0 5 10 15 20 25 30 35 40
Covers all office submarkets in each city. Tokyo – CBD - 5 kus

Office Vacancy Rates in Major Markets, Q2 2017
Global
11.9%
30% Quarterly movement
Americas Europe Asia Pacific Increased
25% 14.7% 7.8% 11.1% Decreased

Stable
20%
15%
10%
5%
0%
Beijing
Boston
San Francisco
New York
Mexico City
Chicago
Madrid
London
Frankfurt
Hong Kong
Seoul
Mumbai
Toronto
Milan
Tokyo
Los Angeles
Sao Paulo
Paris
Stockholm
Sydney
Shanghai
Washington DC
Brussels
Moscow
Singapore
Regional vacancy rates based on 62 markets in the Americas, 24 markets in Europe and 25 markets in Asia Pacific.
Covers all office submarkets in each city. All grades except Asia and Latin America (Grade A only). Tokyo relates to CBD – 5 kus.
Global and Regional Office Vacancy Rates, 2009 - 2017
19
Vacancy Rate (%)
17.9%
17
15 14.4% 14.7% Americas
13
11.9% 11.9% GLOBAL
11.1% Asia Pacific
11
10.3%
9
7.8% Europe
7
Q4 2009
Q1 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
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
62 markets in the Americas, 24 markets in Europe, 25 markets in Asia Pacific. All grades except Asia and Latin America (Grade A only).
Office Rental Trends
Rental growth surprises on the upside
Rental growth has quickened in recent months, with annual growth for prime offices (across 26
major markets) accelerating in Q2 2017 to 3.4% (from 2.7% in Q4 2016).
Several major markets are witnessing particularly vigorous growth, with double-digit uplifts in
Sydney (+32% year-on-year), Stockholm (+17%) and Toronto (+10%). Meanwhile, Chicago (+9%)
and Washington DC (+4%) continue to register solid growth in asking rents; Hong Kong Central has
again seen a further uplift (+8%); and rents are gathering pace in Brussels (+9%), Madrid (+8%) and
Milan (+5%).
Significantly, Singapore and Sao Paulo have recorded their first quarter-on-quarter rental growth
since Q1 2015 and Q1 2012 respectively, pointing to a turning point in their rental cycles.
We have upgraded overall rental growth expectations for 2017 from 2% to 3%. Sydney, Stockholm
and Brussels are anticipated to top the global ranks for rental growth for the full year.
New supply driving up asking rents in the United States
New high-quality offices in the U.S., that are commanding a premium compared to existing space,
have placed significant upward pressure on rents, which have risen by 3.2% over the year and by
4.9% for CBD Class A space. Moving into the second half of 2017 and into 2018, the wave of new
supply to deliver over the next six quarters will markedly alter the office landscape, increasing
competition among landlords for tenants and stabilising rents in the process.
Rental growth maintains its momentum across mainland Europe
The European Office Rental Index rose by 2.1% in the year to Q2 2017, nearly double the 10-year
average of 1.2%. Excluding the UK, annual rental growth reached 3.6%, highlighting the continued
momentum across mainland Europe.
Rental uplifts have been recorded across a broad range of European markets. Stockholm is
catching the headlines as the standout market, but solid growth is also a feature of the Benelux
(Brussels, Amsterdam and Utrecht), Southern Europe (Rome, Barcelona, Madrid and Milan) and
Germany (Stuttgart, Hamburg and Munich).
In London, prime rents remained unchanged in Q2 2017. However, the 8.3% drop in prime rents
since the Brexit vote highlights the ongoing uncertainty in the market. Rents are predicted to fall
further by year-end as robust completions apply upward pressure on vacancy.
Looking ahead, solid occupier activity and limited development will continue to restrict the
availability of high-quality space, driving up rents across Europe as a result. Prime office rental
growth is expected to total around 2% per year in 2017 and 2018 with Barcelona, Stockholm and
Amsterdam projected to record the strongest uplifts.
Overall rental growth edges up in Asia Pacific, albeit at a slower rate
Asia Pacific rents increased 3.3% year-on-year in Q2 2017. The most vigorous annual rental growth
was recorded in Sydney and Melbourne, contributed to by declining incentives and increasing face
rents. While supply pressure held Shanghai rents relatively stable, demand from Chinese
companies contributed to robust growth in Hong Kong. Elsewhere, Singapore returned to growth
with rents edging higher.
Prime Offices – Rental Change, Q2 2016 – Q2 2017
Sydney
Stockholm
Toronto
Chicago
Brussels
Hong Kong
Madrid
Milan
Washington DC
New York
Los Angeles
Boston
Tokyo
Frankfurt
Mumbai
San Francisco
Dubai
Paris
Shanghai
Beijing
Sao Paulo
Mexico City Americas
Singapore EMEA
Moscow Asia Pacific
Seoul
London % change
-10 -5 0 5 10 15 20 25 30 35
Based on rents for Grade A space in CBD or equivalent. In local currency.

Prime Offices – Rental Change, 2010 - 2017

Rental change (y-o-y %)
10
8.3%
8.0%
8
3.7% 4.0%
4
3.0%
2.7%
2 1.5%
0.8%
0
2010 2011 2012 2013 2014 2015 2016 2017F
Prime office rental growth: unweighted average of 26 major markets.

Prime Offices – Projected Changes in Values, 2017
Rental Values Capital Values
20 - 30% Sydney Hong Kong
Milan, Stockholm, Sydney

10 - 20% Brussels, Frankfurt, Moscow
Stockholm, Brussels, Toronto, Washington DC Toronto, Singapore

5 - 10% Milan, Hong Kong
Madrid, Frankfurt, Dubai*, Boston, Chicago Madrid, Mumbai, Tokyo, Dubai*, Boston, Chicago
0 - 5% Los Angeles, New York*, San Francisco Los Angeles, San Francisco, New York*
Singapore, Mumbai, Paris*, Tokyo, Moscow Washington DC, Paris*, Shanghai, Beijing
Shanghai, Beijing, Sao Paulo Sao Paulo, Mexico City

0 - 5% Mexico City, Seoul, London* London*, Seoul
*New York – Midtown, London – West End, Paris – CBD, Dubai – DIFC. Nominal rates in local currency.
Prime Offices – Rental Clock, Q2 2017
Beijing, Washington, DC
New York
Tokyo, Hong Kong, San Francisco Shanghai
Chicago, Dallas
Prague, Boston, Toronto

Frankfurt
Stockholm, Los Angeles Rental Growth Rental Values
Paris, Sydney Slowing Falling
Madrid, Berlin Istanbul, Seoul, Houston
Milan, Amsterdam Rental Growth Rental Values

Accelerating Bottoming Out
Brussels London
Delhi Mexico City

Warsaw, Sao Paulo
Mumbai Moscow, Johannesburg, Dubai, Zurich, Singapore
Americas EMEA Asia Pacific
Based on rents for Grade A space in CBD or equivalent.

U.S. positions relate to the overall market.
Retail Markets
U.S. retail market approaching cyclical peak
The U.S. retail sector may be reaching its zenith for the cycle. Major markets are approaching their
peak, with retail performance expected to slow this year as same-store growth stagnates for many
retailers, and store closures rise. Closure announcements have been accelerating in recent
months, with department stores closures topping the headlines. Macy’s and Sears are forecast to
return approximately 18 million square feet of mall space to the market over the next year. While
the upcoming vacancies will pose opportunities for strong malls to upgrade to a more productive
tenant or refresh the space with an entertainment destination, weaker malls could experience a
ripple effect to their in-line occupancy.
Although construction activity has ramped up since the end of the recession, developers and their
lenders are keeping the reins close on supply and current levels are well below what they were 10
years ago. Much of the major retail construction currently underway is for mixed-use
development. Increasing population densities in urban centres are driving this trend and helping
to justify soaring land costs.
Structural change becoming more prominent across Europe’s retail markets
The continued growth of online sales, omni-channel retailing and technical innovations are forcing
many retailers across Europe to review business models in order to achieve profitable growth and
protect margins. As a result, major retailers are investing in their distribution networks and those
with larger store portfolios are rightsizing, although demand for quality retail space remains
strong.
Prime retail rents remained predominantly stable during the second quarter of 2017 across all
asset classes, with notable prime rental growth for retail warehouse park space in Berlin, Hamburg
and Stuttgart, which rose 5.9%, 2.7% and 2.7% respectively over the quarter. Looking forward,
prime high street rents in Stockholm, Copenhagen, Prague, Dublin, Madrid and Barcelona are
forecast to see the most robust uplifts in the medium term. Prime shopping centre rents are
expected to record the strongest growth in Hungary, the Czech Republic, Russia and Spain.
F&B operators lead activity in Asia
F&B operators continue to be the most active segment in Asia Pacific, which saw mixed rental
trends across the region. In Shanghai, rental growth was led by malls with experienced operators
in areas such as Huaihai Road and Huamu Road. High street shop rentals in Hong Kong remained
under pressure, albeit with the pace of decline moderating. The Marina submarket in Singapore
continued to see the most pronounced decline, in part due to supply pressures. Rents were stable
in Sydney and Melbourne, where demand from F&B operators has provided support for rents;
however, negative rental reversion is still being reported by many institutional landlords.
Prime Retail – Rental Clock, Q2 2017
London Boston, Houston

Washington DC, Beijing, Paris New York, San Francisco
Tokyo
Los Angeles, Madrid

Rental Growth Rental Values
Slowing Falling
Dubai, Berlin
Milan, Shanghai, Chicago

Rental Growth Rental Values Singapore
Accelerating Bottoming Out
Mumbai
Hong Kong
Delhi
Moscow, Sydney
Prime Industrial – Rental Clock, Q2 2017
Amsterdam, Hong Kong

San Francisco
New York, Dallas
Tokyo
Beijing
Philadelphia
Chicago, Los Angeles
Houston, Atlanta Rental Growth Rental Values
Shanghai Slowing Falling
Boston, London, Stockholm
Milan
Rental Growth Rental Values
Sydney, Frankfurt Accelerating Bottoming Out
Singapore
Madrid Moscow
Paris, Warsaw, Istanbul
Relates to prime space. U.S. positions relate to the overall market. Source: JLL, July 2017
Industrial Markets
U.S. industrial rents surge on tight supply and structural tailwinds
Total net absorption in the U.S. warehouse and distribution market as a percent of total inventory
trailed new deliveries for the first time in over seven years during Q2 2017. This lower level is not a
sign of weakening market conditions however, and is largely attributable to the lack of quality
vacant space left in the market to absorb, coupled with a decline in average size of transactions.
National vacancy declined again in Q2 2017 and is now at 5.2%. Nationally, rents increased by
nearly 6.5% on an annualised basis to reach US$5.35 per square foot, an all-time high. We
anticipate that rents will continue on their strong upward track through the rest of 2017.
The construction pipeline continues to expand, increasing in more than half of U.S. markets
compared to Q1. Pre-leasing rates for both speculative and build-to-suit buildings were more
robust in Q2 than the previous quarter. In particular, e-commerce and logistics distribution
companies have signed more leases for buildings under construction (including proposed
projects), an indication of a growing sector with a need for new functional warehouse space.
European warehousing markets expected to maintain record occupier activity in 2017
Responding to continued strong online retail sales growth coupled with automation, digital
alignment of distribution processes and the need for new city logistics networks, JLL's latest
Supply Chain Activity Index suggests that the upward trajectory in European occupational demand
will continue through 2017 with total take-up likely to exceed last years' record.
As new warehousing demand continues to outpace construction and with the majority of new
supply remaining firmly build-to-suit driven, the European vacancy rate is expected to edge down
further through the rest of 2017 to reach around 5% at the end of the year overall. Meanwhile, high
levels of occupational demand, particularly in and around major cities, should push immediately-
available supply in these locations down even further. As a result, we see rising upward pressure
on rents with the majority of European markets anticipated to record rent increases over 2017.
Demand in Asia Pacific continues to stem from 3PLs and e-commerce firms
Leasing activity in Asia Pacific mainly involved 3PLs and e-commerce firms during Q2 2017. Take-
up accelerated in Shanghai as space completed in the previous quarter was leased, while retailers
and manufacturers expanded their warehousing space in Hong Kong. Leasing activity also picked
up in Singapore, supported by the recent uplift in manufacturing and trade figures. Occupier
demand in Sydney and Melbourne was robust with broad-based demand from 3PLs,
manufacturing, retail goods and wholesale goods traders.
Rents edged up in most markets across the region. Melbourne recorded the strongest increase
following a period of little growth, while Singapore’s logistics rents eased further on continued
supply pressure, but at a slower pace following the pick-up in leasing momentum.
Prime Logistics Yields in Major Markets, Q2 2017
United States Asia Pacific Europe

7.0%
6.75%
6.50%
6.5% 6.30%
6.0%
5.75%
5.5%
5.20%
5.0% 4.90% 4.90%
4.75% 4.75% 4.75%
4.60%
4.50% 4.50%
4.5%
4.00% 3.90% 4.00%

4.0% 3.80%
3.5%
Chicago Atlanta Eastern Dallas New JerseySouthern Singapore Sydney* Beijing Shangai Hong Kong* Tokyo* Warsaw Barcelona Paris Frankfurt London
Pennsylvania California
Based on Class A Industrial yields in the Americas; Prime logistics yields in Europe; Indicative prime transactional yields in Asia Pacific;
Average prime equivalent yield in Sydney.
*Sydney – Outer Central West; Tokyo – Greater Tokyo; Hong Kong relates to Warehouses
Hotel Markets
Hospitality sector performance resilient
Despite ongoing geopolitical and economic uncertainty, the travel and tourism industry continues
to flourish. The latest hotel performance data have posted encouraging results with most regions
recording positive RevPAR growth over the May 2017 year-to-date period.
In Europe, Spain continues to deliver impressive performance with Barcelona and Madrid
registering double-digit RevPAR increases driven by a record level of tourist arrivals. In Paris,
RevPAR grew nearly 10% year-on-year; however, it has not yet bounced back to previous levels.
In North America Canada is posting especially strong growth in hotel revenue, while the strength of
the U.S. economy has extended the hotel performance growth cycle. May 2017 was the 87th
consecutive month of RevPAR growth, up 3.4% year-on-year.
In Asia Pacific, Sydney and Tokyo were the top performers as RevPAR rose 13.1% and 5.9% year-
on-year respectively, thanks to strong tourism demand which outstripped hotel supply.
Hotel transaction volumes muted, but expected to pick up in H2
Overall investor sentiment is positive, due to improving economic indicators in key countries
together with optimistic hotel performance forecasts. Nevertheless, geopolitical issues such as the
French and UK elections, terrorist attacks and low oil prices resulted in investors adopting a more
cautious approach in the first half of 2017. Global hotel transactional activity was therefore
muted, totalling US$23 billion, 12% behind the same period last year.
The Americas accounted for nearly half of global hotel transaction volumes in H1 2017 with deal
activity on par with the previous year at US$11.5 billion. The U.S. was the most liquid market
globally with US$9.3 billion worth of hotel transactions, supported by a notable increase in
purchases by REITs, whose buying activity rose 91% year-on-year.
Global Hotel Investment Volumes, H1 2016 - H1 2017
% change
US$ billions H1 2016 H1 2017 H1 16-H1 17
Americas 11.4 11.5 1%
EMEA 9.4 8.0 -15%
Asia Pacific 5.2 3.5 -33%
Total 26.1 23.0 -12%
In EMEA, Germany took the top spot for transaction volumes, recording US$1.9 billion worth of
hotel deals in H1 2017, albeit this was 14% lower than last year. The country has the highest level
of acquisition activity from banks and institutional investors in the region at 25%, primarily
attributable to the large number of lease agreement opportunities available in the German hotel
sector, which represented around 73% of total deals in H1.
The UK came in second with transactions totalling US$1.8 billion. Though year-to-date UK
investment volumes are still 30% behind H1 2016, there has been a higher level of deal activities in
key cities. London registered a 7% year-on-year uplift in H1 2017, while regional cities such as
Manchester, Bristol and Edinburgh all observed increasing activity as well, with combined
investment volumes in these three cities nearly twice that of the same period last year.
The Netherlands and Spain were the two Western European countries that witnessed a year-on-
year increase in volumes in the first half of the year, up 77% and 44% respectively. This suggests
that investors are starting to branch out to other countries that have the potential to offer better
returns.
Asia Pacific saw a 33% decline in transaction volumes in H1 due to a dearth in quality stock on the
open market. Hong Kong, Japan and Australia were the star performers in terms of inbound
investment, thanks to long-term positive tourism fundamentals and trading performance. Hong
Kong recorded eight individual deals amounting to almost 2,000 rooms that sold for a combined
total of US$1.2 billion, which was twenty times more than its full-year 2016 volumes. Three of the
transactions were development plays and the former hotels or serviced apartment buildings
recently acquired will be converted to residential.
International capital continues to play a key role in the global hotel investment market,
accounting for around 25% of all transactions in H1 2017. North America is the largest recipient of
offshore capital with around 21% of U.S. hotel transactions involving international buyers, of
which more than half were from Asian countries including mainland China. European buyers have
also emerged as a major acquirer.
Hotel Transactions: Capital Outflows and Inflows, H1 2017
Mainland China
North America
Asia
Europe
Middle East
Australasia
South America US$ billions
-2.5 -1.5 -0.5 0.5 1.5 2.5 3.5

Outflows Inflows
*Excludes multijurisdictional portfolio transactions

Institutional investors checking in
Institutional investors have been steadily increasingly their capital allocation to the hotel sector,
with transactional activity totalling approximately US$2 billion in the first six months of 2017
compared to under US$1 billion five years ago. Deka Immobilien Investment GmbH, Union
Investment and Standard Life were some of the early pioneers who invested in the sector.
Since then, more companies have started to dip their toes into the sector as they look for better
yields and investment diversification. Investment destinations have expanded from Germany to
the U.S, the U.K, Ireland, Spain, Netherlands and Denmark. Hotel property is now being seen as a
viable asset class and we expect more deal activity from institutional investors in the coming
years.
Chinese outbound travel boom
Chinese travellers have been the largest source market in the world for international travel since
2012. The number of Chinese outbound travellers has jumped 300% from 34 million in 2006 to 135
million in 2016 and the UNWTO forecasts this number will grow to 220 million by 2025. Top
destinations include Thailand, South Korea and Japan due to their proximity to China; however,
Chinese travellers are starting to venture out to more distant locations such as the U.S., Germany,
France and the UK.
Increased disposable income, simpler visa regulations and the adoption of the Approved
Destination Status system in many countries are the major drivers behind the Chinese outbound
travel boom. The rise of the Chinese traveller is also prompting Chinese companies to expand
overseas to capture a share of this growing market. Jin Jiang International is now the fifth largest
hotel company in the world after its merger with Plateno in 2015 and 7 Days Inn, a budget brand
under the Plateno group, is opening hotels in locations such as Berlin, Munich, Leipzig and Venice.
While the capital restrictions imposed by the Chinese government on outbound investment have
slowed down deal flow, buying activity has continued with investors moving to smaller deal sizes
in regional cities. The primary effect has been on those SOEs trying to get cash out of mainland
China, but many Chinese players who have funds already in offshore accounts are still active.
Residential Markets
Growth decelerates in U.S. rental apartments on supply wave
The U.S. rental apartment market has slowed over the beginning of 2017 with national annual
rental growth softening 180 bps year-on-year to 2.9% in the first quarter. This was the first quarter
since year-end 2010 where rental growth has dipped below 3%.
In spite of the overall declines in the pace of rental growth, eight markets saw gains in excess of 5%
on the quarter, while an additional seven markets maintained rental growth in excess of 4%. Nine
markets in the West region comprised the majority of market leaders on the quarter, ranging from
Portland’s 4.2% to Sacramento’s 10.8%. Sunbelt markets made up the remaining rental growth
leaders, ranging from Raleigh-Durham’s 4.3% to Atlanta’s 5.2%.
Select markets saw declines in effective rents on the quarter, led by Houston’s -2.7% fall. New
York, San Francisco and Silicon Valley each experienced declines in annual effective rents of less
than 1% as well. After consistent rental gains over the course of the decade, rents are showing
some signs of fatigue. Yet with the current unemployment rate at 4.4%, average hourly earnings
increasing 2.5% year-on-year and a domestic economy operating in a stable range of measured
growth, multifamily rents appear set to expand in a similar range of consistent growth.
UK institutional investment market continues rapid expansion
The UK housing market has slowed over the past year with major indices suggesting annualised
house price growth of circa 3% in the year to June 2017. Transaction levels have also fallen, to 1.19
million in the year to May 2017 from 1.3 million in the previous year. Prices in Central London have
picked up a little during the first half of 2017 but remain subdued and are expected to be broadly
flat for the rest of the year.
The investment market, in contrast, has continued its remarkable growth rate and the total
pipeline of institutional-grade residential stock is now over 100,000 units. In London this
represents between 10% and 15% of current delivery volumes and has now become established as
a credible alternative exit for many ‘for sale’ schemes that have been caught out by the softer
market conditions. Investors continue to chase stock outside London to improve expected yields,
pushing the proportion of non-London delivery above 50% of all build-to-rent activity. Housing
policy continues to evolve in ways that are supportive of further expansion in the asset class.
Transactional activity remains robust in Germany
The German residential investment market remained in robust shape during the first half of 2017
with total transaction volumes of €6.2 billion, a 40% rise on the same period in 2016. As in the
previous few quarters, market activity was driven by small-scale transactions and the trade in
project developments.
The wider Berlin region continues to be the capital of the residential property investment market,
with transaction volumes of almost €1.8 billion in the first six months of the year. This was 30% of
the total for the whole of Germany and was attributable to an extraordinarily high proportion of
international investors (35%).
The lively deal flow is expected to carry on in the second half of the year, dominated by project
developments, and in some cases, high-volume sub-portfolios as a result of portfolio
rationalisations. Transactional activity of €15-17 billion is expected for the full-year 2017, which is
50%-70% above the 10-year average.
Investor demand pushes yields to historic lows in the Netherlands
The investment market experienced a strong first half of 2017 in the Netherlands, although a lack
of suitable large-scale product weighed on total investment volumes for residential space.
Nevertheless, demand remains high with investor interest spreading across the country due to
limited supply in the major markets, where pricing sharpened further in H1 with prime net initial
yields standing at historical low levels.
The owner-occupier market also witnessed robust performance. As a result of the ongoing
elevated levels of demand, prices have risen strongly with the average transaction price up by 9%
on last year and standing 2% above the level achieved in 2008. The number of available premises
for sale has fallen to its lowest point in 13 years, with the shortage of supply potentially leading to
further price increases. Current price levels may be touching the boundaries of affordability once
interest rates start to increase.
Housing market confidence continues to improve in Spain
The housing market in Spain is continuing to benefit from strong economic fundamentals with
total investment volumes (for residential and land) in H1 2017 of €888 million. A significant supply
of new developments is coming on stream during 2017 and more developments are being sold off-
plan in Madrid, Barcelona and Malaga, boosting confidence in the market. Residential capital
values and rents are continuing their upward trend.
Developers are betting strongly on residential development with a significant volume of land sales
evident in Q2, and the market is continuing its process of ‘professionalisation’ with Aedas,
Castlelake’s Spanish development arm, preparing to follow Neinor with an IPO in Q4 2017.
Strong price growth in Portuguese residential market
The Portuguese residential market continued to see robust price growth in Q2 2017. With supply
of newly-available housing being taken up at a fast rate, there is a shortage of product at the
medium to high end of the supply spectrum. Demand in the upper segment of the market and in
city centre locations is being driven primarily by international capital, due to affordability
constraints on domestic buyers.
Policy restrictions continue in China; sentiment improves in Singapore
Tightening measures remained in the spotlight in Greater China with new policy measures rolled
out and existing restrictions adjusted in many cities during the quarter. In Hong Kong, the 15%
stamp duty levy was extended to first-time buyers of multiple properties and some financing
criteria for developers and select homebuyers were tightened.
Despite policy restrictions the market upswing in Hong Kong continued, with strong demand for
new mass residential launches. By contrast, sales volumes in Shanghai remained low due to the
tight policy stance and limited supply. In Singapore, sales transactions in the prime districts are
likely to show further gains from last year, reflecting healthier levels of demand.
Rental growth was limited in most Asian markets. Modest quarterly rental gains were recorded in
China’s Tier 1 cities against steady leasing demand while Hong Kong’s luxury rents rose for the first
time in seven quarters, supported by an uptick in leasing in large part due to seasonal factors.
Rental declines in Singapore’s prime areas eased, supported by improved demand as attractive
rents enticed tenants from outside districts.
Key Investment Transactions in Q2 2017

Europe, Middle East and Africa
Sales
price
Country City Property Sector US$m Comments
Denmark Copenhagen AC Hotel Hotel 245 Norwegian investor Wenaasgruppen has purchased
Bella Sky the property, the largest hotel in Denmark, on a sale-
Copenhagen and-leaseback basis.
Denmark Copenhagen Copenhagen Hotel 114 Property company Fastighets AB Balder has acquired
Portfolio the properties, which are all located next to the central
(four hotels) train station in Copenhagen.
France Paris Vivacity Office 404 Blackstone has sold the 23,250 sq m complex to
Amundi Real Estate. The sale represented a net yield of
3.4%.
Germany Munich Pullman Hotel 119 The property has been purchased by Singapore REIT
Hotel CDL Hospitality Trust.
Munich
Germany Various Corestate Retail 757 Universal Investment, a fund manager of Bayerische
Retail Versorgungskammer has acquired the portfolio,
Portfolio comprising 90 properties with a total lettable area of
approximately 290,000 sq m, located across 74 German
cities.
Germany Various Geneba Industrial 474 Frasers Centrepoint has acquired an 86.56% stake in
Properties Geneba Properties, an Amsterdam-based listed real
Portfolio estate investment company specialising in German
and Dutch logistics and industrial assets from Catalyst
RE Coöperatief.
Italy Various Centraline Alternatives 683 Crédit Agricole Assurances and EDF Invest have
telefoniche purchased the telecom portfolio of 150 assets spread
across Italy from the property company Beni Stabili.
Netherlands Amsterdam DoubleTree Hotel 394 Blackstone has sold the property to Asian investor
by Hilton Anbang Capital.
Amsterdam
Centraal
Station
Netherlands Amsterdam Atrium Office 572 Amundi Real Estate has purchased the 60,000 sq m
property in the largest ever transaction in the Dutch
office sector. Tenants include CMS, Hogan Lovells,
Optiver, Vistra, Celanese and JLL, with rents ranging
between €365 and €400 per sq m per year.
Netherlands Various Q-Park Alternatives 527 The portfolio, comprising nine assets of Q-Park's car
Portfolio park portfolio located in Amsterdam, Rotterdam,
Maastricht and The Hague and offering a combined
300,000 sq m of space, has been sold to private equity
firm Kohlberg Kravis Roberts (KKR).
Sales
price
Spain Playa del IFA Portfolio Hotel 119 HI Partners has bought the portfolio of three budget
Ingles, Gran hotels from hotel operator Lopesan Hotels & Resorts,
Canaria which will continue to manage the hotels.
UK London Grosvenor Hotel 768 GH Equity UK has purchased the iconic hotel, currently
House Hotel managed by Marriott and comprising of 420 rooms, 74
suites and 27 conference rooms.
UK London Cannon Office 621 Deka Immobilien has purchased the landmark City of
Place London building, offering 38,851 sq m of grade A office
as well as 754 sq m of retail space. The sale
represented a net yield of 4.4%.
Asia Pacific
Sales
price
Australia Melbourne Victoria Office 261 Australia Postal Corporation has sold a 50% interest in
Police HQ the property with a total acquired floor area of 65,000
sq m to Keppel REIT in a deal worth A$348 million.
Australia Sydney Home Hub Retail 252 Aventus Property Group has purchased the home and
Castle Hill lifestyle centre from LaSalle Investment Management
in a deal worth A$336 million. The site features a total
of 52,004 sq m and was transacted at a yield of 5.5%.
Australia Sydney MLC Centre Office 543 DEXUS Wholesale Property Fund has purchased a 50%
interest in the building in a A$723 million deal. The 62-
storey property has potential for redevelopment with
a number of underutilised floors.
Australia Sydney Exchange Office 252 Kumpulan Wang Persaraan (KWAP) has sold off 17,872
Centre sq m of fully-let space to Early Light International
Group in a deal worth A$335 million. The transaction
was completed on an estimated initial yield of 3.9%.
Australia Sydney Four Points Hotel 142 The 297-room hotel has been sold to investment fund
by Sheraton Impact Investment Group by Frasers Hospitality.
Sydney,
Central Park
China Beijing Taohui Retail 321 A private Hong Kong Investor has bought a 75% stake
Xintian in the mall in a JV with Nan Fung Group from InfraRed
Shopping Capital Partners. The deal was worth RMB 2.2 billion.
Mall
Sales
price
China Guangzhou Metropolitan Retail 592 Link REIT has acquired the five-storey mega mall with
Plaza approximately 88,000 sq m GFA of retail space from
Gaw Capital Partners for approximately RMB 4.07
billion. The transaction was completed on a gross
yield of 4.7%.
China Shanghai Hongkou Office 521 Keppel Land China and Alpha Investment Partners,
SOHO both of which are subsidiaries of Keppel Group, have
purchased the property in a JV for RMB 3.57 billion.
The building has a total GFA of 90,000 sq m which
includes an estimated 70,000 sq m of leasable area.
China Shanghai Guozheng Office 385 CapitaLand has purchased the building from
Centre Shanghai Baohua Group for RMB 2.64 billion, based
on a total GFA of 80,701 sq m. The total occupancy
rate stood at 29% in April 2017.
China Shanghai H88 Tower Office 277 SEA Group has acquired the 55,879 sq m building from
Everbright Ashmore in a deal worth RMB 1.9 billion, at
a unit price of RMB 35,000 per sq m.
Hong Hong Kong Rosedale Hotel 193 The Bank of China has sold off its 100% stake in the
Kong Hotel hotel to a private investor.
Hong Hong Kong The Office 385 Nan Fung Group has sold the property to a local
Kong Wellington investor for HK$3 billion. The site features a total floor
area of 9,290 sq m and the deal was completed on a
net yield of 2.1%.
Hong Hong Kong Butterfly on Hotel 111 UK company Travelodge has bought the budget hotel
Kong Hollywood from Alpha Investment Partners.
India Mumbai / Industrial JV Industrial 500 CPPIB has entered into a JV with IndoSpace focused
Delhi on acquiring completed modern industrial and
logistics assets in India with an initial acquisition of
nine assets, measuring 9 million sq ft. CPPIB will
commit a further US$700 million on IndoSpace Core
acquiring an additional 11 million sq ft within the next
two years.
Japan Osaka Dojima Hotel 90 Japanese investment fund GK Falcon has sold the 76-
Hotel bedroom hotel.
Japan Tokyo Shinagawa Office 270 Takeda Pharmaceutical Co. has sold the 23-storey
Seaside TS office building to EGW Asset Management for JPY 30
Tower billion. The building has a total floor area of 43,892 sq
m and was purchased with Korean investor funds.
Japan Yokohama TOC Minato Mixed 530 Hulic Co., Ltd. and a minority listed real estate
Mirai company have acquired the office and retail portion of
the property, with a total floor area of 90,564 sq m, in
a joint venture.
Sales
price
Japan Yokohama Concurred Office 343 Daiwa Office REIT SPC has acquired a 75% stake in the
Yokohama property from Yokohama TMK for JPY 38 billion. The
20-storey property has a GFA of approximately 52,773
sq m and the purchase was completed on a net yield
of 4.6%.
Americas
Country City Property Sector Sales Comments

price
US$m
Brazil Belo Bouvelard Office 86 Aliansce Shopping Centers S.A. has acquired the 20,400
Horizonte Corporate sq m tower at a reported 8% initial yield from fund
Tower manager CTBH Fundo de Investimento Imobiliário – FII.
Brazil Multiple Centenario Office 135 BR Properties has purchased the two-building portfolio
Plaza from pension fund Caixa de Previdencia dos
Funcionarios do Banco do Brasil - Previ.
Canada Montreal SNC-Lavalin Office 128 GWL Realty Advisors has acquired the more than 33,000
HQ sq m property from SNC-Lavalin.
Canada Toronto Ontario Office 322 KingSett Capital has purchased the approximately
Power 111,000 sq m CBD asset from Ontario Power Generation.
Building
Canada Toronto 8875 Industrial 118 Carttera has sold the nearly 83,000 sq m warehouse
Torbram asset, located in Brampton, to Concert.
Road
Canada Vancouver 4190 Still Office 83 Fortinet has purchased the nearly 27,000 sq m suburban
Creek Drive property from Holdings 1504 Enterprises.
Mexico Monterrey Saqqara Office 37 Mexican REIT Fibra Uno has acquired the 11,200 sq m
Edificio I asset, located in San Pedro Garza Garcia, from IDEI.
U.S. Dallas 3000 Industrial 75 Transpacific Development Company has purchased the
Cantrell 66,200 sq m warehouse asset from Deutsche Post AG.
Sansom Rd
U.S. Detroit Troy Office 55 Hayman Co. has acquired the 67,700 sq m asset from
Officentre Osprey Management.
U.S. Hampton Two Office 57 The RMR Group has purchased the 26,800 sq m
Roads Commercial downtown Norfolk property from Marathon
Place Development Group at a reported 7% initial yield.
U.S. Honolulu - Pacific Hotel 515 Highgate Holdings has sold the 837-room, 4-star resort
Oahu Beach Hotel to German investor Commerz Real
Investmentgesellschaft mbH (CRI).
Country City Property Sector Sales Comments

price
US$m
U.S. Houston Ikea Industrial 64 Clay Development has sold the approximately 92,600 sq
Distribution m distribution centre to Pure Industrial REIT.
Center
U.S. Las Vegas The Office 62 The Koll Company has acquired the 17,400 sq m asset,
Gramercy located in suburban Spring Valley, at a reported 6.9%
initial yield from The Krausz Companies, Inc.
U.S. Los Angeles One Office 459 A JV of Rising Realty Partners and Colony NorthStar has
California purchased the nearly 90,500 sq m CBD tower from
Plaza Beacon Capital Partners and Madison International.
U.S. Los Angeles Riverside Retail 166 Vestar Development has sold the 37,500 sq m shopping
Plaza centre to AEW.
U.S. New York 245 Park Office 2,210 China's HNA has acquired the approximately 160,200 sq
Avenue m tower from Brookfield Asset Management and Clarion
Partners at a reported 5.2% initial yield.
U.S. New York Dumont NYC Hotel 118 Pebblebrook Hotel Trust has sold the hotel to LeFrak
- an Affinia Organization, marking Pebblebrook’s exit from New
Hotel York City. The majority of its assets are now on the West
Coast, with multiple properties in Los Angeles, San
Francisco and Portland.
Illustrative Office Occupational Transactions in Q2 2017

Europe
Floorspace
Country City Property Tenant Industry Sector sq m
France Paris Centre Marine Pépinière Gide Legal Services 18,000
France Paris Opus 12 Deloitte Business Services 9,500
France Paris Docks en Seine Régime Social des Public 8,700

Indépendants Administration
France Paris Coeur Défense Nextdoor Business Services 4,500
Germany Cologne Von-Gablenz-Strasse 2-6, Federal Office of Family Public 18,600

Messe/Deutz and Civic Affairs Administration
Germany Cologne Strabag HQ, Messe/Deutz Strabag AG Construction 17,000
Germany Frankfurt Junghof Plaza Clifford Chance Legal Services 11,800

Deutschland
Germany Hamburg Olympus Corporate Center Olympus Manufacturing 34,500
Russia Moscow White Stone TH Solpro Manufacturing 3,018
Russia Moscow LeFort DPD Business Services 2,821
Russia Moscow 7 Alexander Solzhenitsyn st. FGUP VO Bezopasnost Energy 2,428
Russia Moscow Krasnaya Roza - Demidov Shire Manufacturing 2,402
UK London 2 Southbank Place, SE1 WeWork Business Services 26,333
UK London LSQ London, SW1 Hearst Magazines Media 6,661
UK London London Fruit and Wool NEX Group Banking & Financial 11,170
Exchange, Brushfield Street, Services
E1
UK London Angel Court, EC2 BUPA Healthcare 5,202
Asia Pacific
Floorspace
Australia Brisbane 180 Brisbane, 180 Ann Street Origin Energy Utilities 16,329
Australia Sydney Wynyard Green, 11-31 York Property NSW Public Administration 17,244
Street
Floorspace
Australia Sydney International Towers Sydney Baker McKenzie Business Services 7,000
– Tower 1, 100 Barangaroo
Avenue
China Beijing Sinotrans Building ZTE ITES 9,500
China Shanghai HKRI Centre One EA ITES 6,400
China Shanghai Bund Finance Center, N2 Bank of Hangzhou Banking & Financial 8,800
Services
Hong Hong Kong Lincoln House BNP Banking & Financial 7,988
Kong Services
Hong Hong Kong Two Pacific Place Huarong Banking & Financial 3,479
Kong Services
India Delhi DLF Building 6 Optum Global ITES 699

Solutions
India Mumbai Adani Inspire Apex Entertainment Media 3,623
Japan Tokyo* Nishi Shinagawa 1-Chome Sega Sammy Group Manufacturing 44,000
District Redevelopment
Project
Japan Tokyo* Shibuya Hikarie Adastria Retail 11,000
Malaysia Kuala Menara Prestige American Express Banking & Financial 8,361
Lumpur Services
Singapore Singapore Republic Plaza II PartnerRe Business Services 900
Singapore Singapore Chevron House CIT Aerospace Business Services 396
South Seoul Samsung HQ Bank of Korea Banking & Financial 30,000

Korea Services
*JLL estimate
Americas
Floorspace
Brazil Rio de L'Oréal L'Oréal Consumer Goods 15,489
Janeiro
Brazil Rio de Torre Almirante WeWork Business Services 7,284

Janeiro
Brazil São Paulo Avenida Brigadeiro Faria Cosan Energy 7,668

Lima, 4100
Canada Calgary Intact Place Intact Insurance Banking & Financial 15,583
Services
Floorspace
Canada Toronto 81 Bay Street CIBC Banking & Financial 162,579
Services
Canada Toronto 2650 Yonge Street CIBC Banking & Financial 9,290
Services
Canada Toronto 33 Bloor St E Omnicom Media 9,290
Canada Vancouver The Exchange Executive Exchange Travel and Tourism 10,229
Hotel Limited
Partnership
Mexico Mexico City The Tower Park Plaza WeWork Business Services 9,200
U.S. Boston The Innovation and Design Reebok Consumer Goods 20,439
Building
U.S. Dallas Plano Parkway @ Parker Road AmerisourceBergen ITES 27,871
U.S. Indianapolis One West Ascension Healthcare 13,750
U.S. New York 375 Pearl Street New York City Human Public Administration 19,881
Resources
Administration
U.S. Phoenix RIO2100 Freedom Financial Banking & Financial 27,871

Services
U.S. Raleigh- MetLife III MetLife Banking & Financial 20,346

Durham Services
U.S. San 1 Front Street First Republic Banking & Financial 16,630
Francisco Services
U.S. Seattle- The Mark F5 ITES 47,893

Bellevue
U.S. Washington Portals Phase II U.S. Pension Benefit Public Administration 40,041
DC Guaranty Corporation
Global Real Estate Health Monitor
Definitions and Sources

Metro Area GDP: Change in Real GDP. Metropolitan Area Projection, 2017. Source: Oxford Economics
City Investment Volumes: Direct Commercial Real Estate Volumes. Metro Area Data. Rolling Annual Total in USD Billion.
Source: JLL
City Investment Volumes Change: 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 (2017-2018) as % of Existing Stock. Source: JLL
For further information contact:
Jeremy Kelly Matthew McAuley

Director Senior Analyst
Global Research Global Research
Jeremy.Kelly@eu.jll.com Matthew.Mcauley@eu.jll.com
About JLL About JLL Research
JLL (NYSE: JLL) is a leading professional services firm that JLL’s research team delivers intelligence, analysis and
specialises in real estate and investment management. A insight through market-leading reports and services that
Fortune 500 company, JLL helps real estate owners, illuminate today’s commercial real estate dynamics and
occupiers and investors achieve their business ambitions. identify tomorrow’s challenges and opportunities. Our
In 2016, JLL had revenue of $6.8 billion and fee revenue of more than 450 global research professionals track and
$5.8 billion and, on behalf of clients, managed 4.4 billion analyse economic and property trends and forecast future
square feet, or 409 million square meters, and completed conditions in over 60 countries, producing unrivalled local
sales acquisitions and finance transactions of and global perspectives. Our research and expertise,
approximately $136 billion. At year-end 2016, JLL had fuelled by real-time information and innovative thinking
nearly 300 corporate offices, operations in over 80 around the world, creates a competitive advantage for our
countries and a global workforce of more than 77,000. As clients and drives successful strategies and optimal real
of December31, 2016, LaSalle Investment Management estate decisions.
has $60.1 billion of real estate under asset management.
JLL is the brand name, and a registered trademark, of
Jones Lang LaSalle Incorporated. For further information,
visit www.jll.com.
Our regional offices
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August 2017

Global Market Perspective

Renewed Momentum Extends Real Estate Cycle

Global Commercial Real Estate Market Prospects, 2017

Investment Capital values

Leasing 2017 Rents

Vacancy rate Development

Investment volumes stable as capital targeting real estate continues to grow

Global office leasing activity remains steady

Global Office Demand – Gross Leasing Trends, 2007 - 2017

24 markets in Europe; 50 markets in the U.S; 22 markets in Asia Pacific

Vacancy expected to rise, but Europe bucks the trend

Office rental growth surprises on the upside

Structural change becoming more prominent in global retail markets

Hotel transaction volumes muted, but sentiment remains positive

Growth decelerating in U.S. rental apartments on wave of supply

Institutional investment remains robust in continental Europe, with elevated transactional

GDP Projections for 2017 in Major Economies – Recent Movements

Australia China France Germany India Japan UK U.S.

Source: Oxford Economics, July 2017

Central banks ponder the QE retreat

Modest uplift to the global outlook

Global Outlook, GDP Change, 2016 - 2018

2016 2017 2018

Source: Oxford Economics, July 2017

Global Real Estate Health Monitor

Dubai 2.2% 1.0 23% 0.0% 7.5% na 0.0% na 14.0% 4.4%

Real estate data as at end Q2 2017.

Real Estate Capital Markets

Despite an elongated cycle, real estate remains attractive to global capital

U.S. market continues to cool

Germany and the Netherlands push Europe ahead

China leads the charge in Asia Pacific

Investment growth expected to be flat in 2017

Direct Commercial Real Estate Investment, 2006 - 2017

Source: JLL, July 2017

Direct Commercial Real Estate Investment – Regional Volumes, 2016 - 2017

% change % change % change

Source: JLL, July 2017

Direct Commercial Real Estate Investment – Largest Markets, 2016 - 2017

% change % change % change

Source: JLL, July 2017

EMEA investment volumes on the rise in Q2 2017

Southern Europe outperforms, while Russia capitalises on higher yields

London maintains position at top of global rankings

Direct Commercial Real Estate Investment, Top 20 Cities, H1 2017

Source: JLL, July 2017

Transactional activity stronger in the Asia Pacific region

Domestic buyers dominate in Japan

Cross-border capital maintains interest in Australia

Strong start to 2017 for foreign buyers in China

Direct Commercial Real Estate Investment – Quarterly Trends, 2007 - 2017

Source: JLL, July 2017

Capital Values and Yields

Further yield compression

Prime Office Yield Shift, Q2 2016 – Q2 2017

Brussels Q1 2017 - Q2 2017

-90 -70 -50 -30 -10 10 30 50 70

Source: JLL, July 2017

Prime Office Yields, 2007 - 2017

Mean Prime Office Yields*

*Across 21 major office markets

Human experience driving corporate real estate strategy