At
Behind the bumper figure was a resurgence in sectors that suffered during the depths of the COVID-19 pandemic. Offices, hotels and retail all saw quarterly investment figures rise year on year.
'There's clearly now evidence of improved sentiment among investors towards those sectors as operational uncertainties diminish,' says
However, while investment sentiment around real estate improved, it's not without a sense of caution. Geopolitics, inflation and rising interest rates are combining to now create uncertainty in the market.
From monetary policy changes, to transport and trade bottlenecks and labor shortages - as well as the demand pressures created by companies looking to either nearshore or reshore - the real estate sector has a lot to ponder at present.
Sectors back in favor
Some of the positive sentiment has come from a relative return to normalcy. After years of severe lockdowns, employees and companies have been eager to get back to the office amid the rise of hybrid working.
Such confidence saw a boost in office investment, with
'Investors are focused on identifying opportunities in sectors and we're seeing office investment, for example, approach normalized levels, particularly in
Similar confidence showed in the retail and hotel sectors. Global retail investment volumes were at
For offices, the global return to favor is largely thanks to improving occupier markets. Office leasing demand in the first quarter was 36% higher than in the same period in 2021 - and reached as high as 44% in the
'Technology companies continue to be a major driver of demand for office space, with the tech industry accounting for the largest share of space leased in the
That's alongside continued investment in logistics and living sectors, which in the
'Despite record levels of new construction, new warehousing space can't be completed fast enough to meet demand,' says McAuley. 'That inability to keep up with demand puts vacancy levels in most major logistics markets below 5%.'
With dry powder now estimated to be at
While headwinds persist, such high levels of dry powder are reassuring, Coghlan says.
'With many investment funds oversubscribed, where and how capital is deployed remains the critical discussion - but large, mature markets dominate and investors' flight to diversification and quality continues,' he says.
About
(C) 2022 Electronic News Publishing, source