According to a report published by Jones Lang LaSalle Incorporated (JLL), a leading real estate investment trust (REIT), global office property prices will increase the most in Moscow as investors vie for premium assets. The report anticipates that office properties in Moscow will increase by more than 20% in 2011, while those in Tokyo, Hong Kong, Singapore, London, Paris, Sao Paulo, Shanghai, New York, San Francisco, Toronto and Washington DC are expected to rise by 10% to 20%.

The Jones Lang report further expects that direct investment in global commercial real estate (CRE) prices will surge by 25% to 35% year over year to over $350 billion in 2011 – the highest such levels recorded since 2008. The recovery is anticipated to be driven by growth in the Asia-Pacific Region. Jones Lang had earlier predicted in its report that global CRE sales would total about $300 billion in 2010, representing a 50% improvement from 2009. During the first half of 2010, global CRE sales had totaled approximately $130 billion.

Jones Lang faces stiff competition from international, regional and local players in the market due to which it has to continually invest in value drivers that act as key differentiators. Consequently, the company is under severe stress to maintain its profitability. We maintain our Neutral rating on Jones Lang, which presently has a Zacks #4 Rank translating into a short-term ‘Sell' recommendation. However, we currently have an Outperform rating and a Zacks #2 Rank (Buy recommendation) on NorthStar Realty Finance Corp. (NRF), one of the peers of Jones Lang.