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The world over, real estate is battling two demons - one, a cyclic downturn pushed down further by the pandemic and two, a long term disruption brought about by the changes in the way we live and work.
Here's a quick look at top trends in the world's real estate markets.
Asia-Pacific Leading Recovery
This is due to the fact that major APAC economies faced the pandemic in better shape when compared to most Western economies.Also, major Asian countries have managed the crisis with more surety so far, which is a big reason why global investors are increasing their allocations of capital to the APAC region, India included.
Low Interest Rate Is A Tailwind
Despite the risk of greater volatility arising out of fiscal stimulus being applied on a global scale,
a super easy monetary
environment is keeping interest rates low
for the time being.
That's resulting in a higher yield spread for real estate than other asset classes, making real estate very compelling to investors. Many global experts believe the
inherent attraction of real estate income
is even stronger this year than in pre COVID times.
Bifurcating Prices
There
is a widespread acceptance in the belief that distressed real estate debt will increase once the government
support packages are withdrawn across the world.
Due to this stress on occupier markets, “a
bifurcation in pricing” phenomenon is being reported by many experts.
This means prices are now different between favourable sectors like logistics, which have provided
stable income during the pandemic and
those sectors that have been worst hit,
like parts of retail and hospitality.
The Shared Economy Is Back
Most experts believe that employees will eventually return to the office, though in more
of a hybrid working model and no matter how you look at it, the need for more flexible
space is inevitable.
From an investor point of view, a polarisation is predicted between perceived
high-quality buildings — modern and
adaptable — and outdated and inflexible
secondary stock that is likely to witness a marked decline in demand.
In one sip - old office buildings are passé.
ESG Measures Are In Full Swing
Compared to just 2 years ago, a far greater level of collaboration - to address the complexity of decarbonising the built environment - is already underway.