JLL’s top team has welcomed the “early stages of recovery” in the real estate capital markets as the firm closed out earnings season for the big US-listed agencies.
In an earnings call following the agency’s third-quarter results, chief financial officer Karen Brennan said a 14% lift in capital markets revenue over the three months came on the back of “improved investor sentiment along with interest rate reductions from many central banks, pent-up demand, significant dry powder, and improved debt availability”.
“Revenue increased across most geographies, led by the US and Europe and nearly all asset classes, with notable growth in hotels, office and industrial,” Brennan said.
“We are in early stages of recovery for the real estate capital markets,” added chief executive Christian Ulbrich. “According to JLL’s proprietary Global Bid Intensity Index, bidder activity further improved in the third quarter from what we saw in the first half of the year, particularly for larger institutional transactions.”
Ulbrich said the agency had yet to see “any pause” in what he expects to be a steady recovery. “There will be no flood of new deals coming, but we will see a seasonal uptick now in the fourth quarter and then we expect a continuous improvement over the course of 2025,” he added.
The US will drive the rebound, the chief executive predicted. “The US market is usually the market which is reacting the fastest on any kind of change in the market environment. It went down first and it will come up first,” he said. “Secondly, if you look at the capital markets from a global perspective, the investable markets are unfortunately shrinking in the world and there’s a tremendous amount of capital out there from international investors and they will look to invest into the US probably more so than investing in any other market at this point in time.”
Ulbrich noted that a “bifurcation” continues between different asset classes. “Multifamily is still by far the strongest. But we see now that the interest in offices is starting to increase,” he said. “The challenge there is that there is very little new product coming to the market. And so there is a focus on the super-high-quality products and we see now much more of a competitive environment for those type of products when they come to market.”
In JLL’s markets advisory division, leasing drove a revenue rise, with Brennan highlighting the UK, UK and India as particularly active. Revenue from office leasing deals grew by a third, with deal size and volumes up.
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