JLL: Real estate remains strong in U.S., Asia Pacific, but slowing down
By Cheng Lei and Wang Yue
02:06

The fundamentals of real estate markets remain healthy with momentum easing, according to the CEO of global real estate service company Jones Lang LaSalle (JLL).

Christian Ulbrich, CEO of JLL, considers that real estate keeps one of the top investment choices for investors worldwide.

"The growth is still very much in the U.S… We also obviously see growth in Asia Pacific…but the growth is not as strong as it has been before," the CEO told CGTN's anchor Cheng Lei on the sideline of the World Economic Forum.

The real estate sector saw an uptick in global sales activity in the third quarter of 2019, as transaction volumes rose by 13 percent to 205 billion U.S. dollars compared to a year earlier. This brings activity over the first nine months of 2019 one percent better than the same period in 2018, based on JLL's study.

Ulbrich said that the strongest growth is coming from the United States, which reported a 22-percent jump in the third quarter of 2019. He also projected that Asia Pacific region will not develop as fast as before.

Jones Lang LaSalle's (JLL) CEO Christian Ulbrich at Davos. /CGTN Photo

Jones Lang LaSalle's (JLL) CEO Christian Ulbrich at Davos. /CGTN Photo

Economic performance may be one reason influencing the property market, based on JLL's observation. "The U.S. economy is doing well and there is still opportunity in the U.S… But the GDP growth (in Asia Pacific) has been slightly coming down over the last 12 months, and we see that in the numbers," he explained.

Is it time for market players to cushion? Ulbrich stood at opposite. "I don't think we have to cushion. We are still growing in that region, but the growth is not as strong as it has been before."

He expected the real estate continues to be "very high up of the list of all investors"  — most categories, including offices, residential, hotels and warehouses are growing unbelievably. "The only one clearly suffering is retail in the shopping centers. This is muted," he said.

Ulbrich attributed part of the high investment willingness of property sector into incredible low interest rates, which drives a lot of additional money into the sector.

Meanwhile, as more investors are having bigger portfolios to manage, the CEO thought that there would be more consolidation in the industry.

"There will be a lot of consolidations. The amount of investment you need to do into technology is really big. And therefore you need to have some scale just to fund that investment. And that will drive consolidation," he said.

CGTN's anchor Cheng Lei (R) meets Jones Lang LaSalle's (JLL) CEO Christian Ulbrich at Davos. /CGTN Photo

CGTN's anchor Cheng Lei (R) meets Jones Lang LaSalle's (JLL) CEO Christian Ulbrich at Davos. /CGTN Photo

Addressing environmental challenges

Sustainability is at the top of the agenda this year at Davos as governments and businesses around the world are grappling with ways to combat climate change.

The built environment is responsible for 30-40 percent of different emissions, especially on the carbon side, then it has a huge role to play in developing and implementing solutions, with technology, investment and robust governance remaining central to success, the CEO said.

"It's not even that you have to bring the carbon down. It's just that you use the right technology to run those systems more efficiently, to integrate a natural energy – solar panels and use your water again and again… There's so much you can do in buildings very easily. We are just at the beginning of seeing that trend growing," Ulbrich added.

And the company commits to carbon neutrality by 2030, the CEO said. "We set ourselves now much more ambitious targets — to get to carbon neutrality much quicker. But we are going to science based approach on our carbon footprint. And I guess we will get to carbon neutrality latest by 2030."