Worldwide Market

World real estate market, trends and forecasts up to 2022

Nuveen Real Estate publishes its global outlook for the global real estate sector. According to analysts, if in general, the situation is nebulous for the whole globe, industrial and logistical assets will be saved.
In fact, according to the findings, this sector enjoys “full sun” in the forecasts of Nuveen RE in all the main areas of the world. Multi-family assets are doing well in particular in Germany and Japan, while some glimmers can be seen in the office sector.
On the other hand, considering investors’ buying and selling intentions, in Europe we have a general tendency to want to get rid of retail assets, while as regards the residential sector, purchase intentions are unanimous in almost every country, as well as in logistics. As for the offices, Nuveen is not optimistic about Italy and Poland and is moderately so in Spain; in the other countries, the segment continues to attract the interest of investors.
Here is the Nuveen RE outlook for the main areas of the world.
Europe
“The V-shaped recovery started during the summer ran out of power in the first weeks of autumn,” reads the report. “After recovering most of the production lost due to the lockdown, European economies are finding it increasingly difficult to fully return to 2019 levels. Forecasts suggest that it may take until the end of 2022 for a full recovery in some regions, while other countries could reach the position by mid-2021. The main factors that will determine the performance are the relative dependence on the service sector and the competence of the government in controlling the coronavirus.
One of the key factors for cities’ short-term performance is their reliance on tourism and business travel. In particular, the cities that usually attract a large number of international tourists for business and tourism are particularly affected by the situation, even if national travel is holding up much better. Cities such as Prague, Paris, Florence, Geneva, Dublin, and Vienna are penalized by empty hotels, affecting retail sales, restaurants, and travel services.
United States
The trajectory of the virus continues to determine the path of recovery in the United States. Mobility data indicate that it has stabilized despite the increase in coronavirus cases. In the short term, the failure of Trump and Congress to implement further fiscal stimulus will significantly hamper the recovery in the United States. A tax incentive package is highly unlikely to be approved before the election.
The September employment report indicated a slowdown in the labor market recovery. Total employment of non-farm workers increased by 661,000 in September, below the last three-month average of 1.3 million. The recently announced mass layoffs and unpaid leave, particularly by airlines, will weigh on the recovery of the labor market.
According to the Green Street’s Commercial Property Price Index, aggregate US real estate values ​​have dropped 10% since the start of the pandemic. Alternative real estate assets including prefab homes, biotechnology centers, and medical offices were the most resilient and lost less than 5.0%.
Asia Pacific
Negotiations have resumed for air travel between countries in the area with a low or limited number of infections. Australia is negotiating with Singapore, Japan, and South Korea to reopen borders for reciprocal travel. A bilateral travel agreement between Singapore and Hong Kong without mandatory quarantine is also under discussion. But the hopes of a rapid and widespread resumption of air travel to revive the hospitality sector are poorly founded, given the indefinite duration of Covid-19. Hong Kong, for example, is preparing for the fourth wave as winter approaches. Consequently, after a rebound in regional growth in the third quarter that followed the exceptionally negative trend of the second quarter, growth is likely to become erratic towards the end of the year. “

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