Investment activity and the value of commercial property are good indicators of the broader economic situation. They highlight risk and opportunity in specific regions or markets and it follows that where businesses are seeking to consolidate or expand, there needs to be adequate provision of commercial real estate stock to underpin those strategic plans.
Established markets and new trends both present opportunities for investors seeking asset appreciation, rental returns and, ultimately, liquidity and a potential exit point. Changes – upwards and downwards – in any of these metrics will influence current and future investment strategy, while also affecting a region’s overall economic prosperity.
As a firm, we have closely tracked the value of commercial real estate held by investors globally, and examined the sources of capital behind them for many years. The latest full-year figures for 2015 reveal some fascinating trends.
First, the global value of all commercial real estate held by investors remained flat at $13.7tn compared with the previous 12 months. But our research shows that strong levels of investment activity actually pushed capital values higher in many markets, only for overall growth to be stunted…