Tomorrow

Welcome to our eleventh annual piece of real estate thought leadership.

A lot has happened since we began gathering data for our last report in March 2022 – when Russia’s invasion of Ukraine was just two weeks old and the Bank of England base rate was 0.5%.

Inflation and interest rates have rocketed around the world. Global tensions have increased. Energy prices have soared and fallen. The Eurozone has slipped into recession. The UK has had three prime ministers. ‘Normal’ news – and good news – has often been drowned out by unprecedented headlines.

It’s not surprising that many in the real estate market have been taking some time to reflect, to process these extraordinary events and to consider how the future is likely to unfold.

Against this background, we felt that our report this year should not only consider key short-term market issues but also look beyond them – to long-term yields, net zero targets, new technologies and fresh opportunities.

We knew that senior industry players would have plenty to say about their immediate concerns. But we also wanted their thoughts on the long-term prospects for real estate, and the changes the sector will see as we move into the second quarter of the twenty-first century.

Around the world, the opinions and choices of investors are crucial in shaping the wider market – indeed, it is hardly an exaggeration to say they shape the world we work and live in.

Gathering the views of 270 UK industry professionals and over 1,000 global institutional investors, we’ve found worldwide confidence in the fundamentals of real estate as an asset class.

There is a healthy degree of optimism about the mid to long term. There is enthusiasm about participating in the evolution of the industry. But there is also a pragmatic appreciation of the current state of the market, and issues around asset values and finance that are likely to prevail through 2023 and into 2024.

Investors are both upbeat and cautious, hopeful and reserved. As I write this, many are in a waiting game. But once there’s an assessment that conditions are changing, a lot of energy – and money – stands ready to re‑enter the market.

Until then, there are still some deals to be done, investment strategies to be shaped and assets to be managed. As Chiang Ling Ng of Hines reminds us, even challenges such as the resetting of commercial loans and steps on the journey to net zero can be “flipped to opportunity”.

The investors with the most considered long view are often also those with the smartest short-term perspectives.

Partner

Clare Thomas

London

Contact details : Clare Thomas

Clare Thomas Phone Number

Read the report by clicking on the chapters below or download the report at the bottom of the page

1. The big picture
2. Jing Dong (JD) Lai, M&G Real Estate Asia
3. Paul Clark, AustralianSuper
4. Global cities
5. Jay Kwan, QuadReal
6. The view from the UK
   1. London 
   2. Other UK cities 
7. Asset classes 
8. Finance 
9. Chiang Ling Ng, Hines Asia
10. Sustainability 
11. Robert-Jan Foortse, APG
12. Sustainable offices and EPC requirements 
13. Technology 
14. Future planning? 
15. Survey methodology 
16. Infographic