Global Real Estate
Perspective
November 2020
Global Real Estate Perspective: Investor and Corporate is JLL’s regular view on the impact of economic forces on property markets worldwide. It is a unique combination of updates from professionals on the ground and the insights of our leading research organization.
JLL’s research team are joined by our investment and corporate occupier market experts to discuss the impact of the COVID-19 pandemic on global real estate.
Carol Hodgson, Tim Graham, Mehtab Randhawa, Adam Challis, Marie Puybaraud and Michael Greene answer some of our clients’ most frequently asked questions covering: real estate investment, logistics and residential, and discuss how corporate real estate priorities have changed during the crisis and the longer-term implications on global CRE strategies.
Signs of improvement in third quarter but outlook uncertain
The global economy rebounded in Q3 but a resurgence of COVID-19 cases in parts of the world highlight the ongoing uncertainty of the outlook. Reflecting this, decision-making processes remain protracted as companies continue to be cautious and review long-term strategies.
In Q3 2020 global office leasing activity was 46% lower than a year ago – an improvement on Q2 where volumes were down 58% on the previous year. Retail and hospitality, as the sectors most reliant on consumer spending and mobility, continue to be the most significantly impacted. Meanwhile demand for logistics space has bounced back sharply, hitting record or near-record levels in several major global markets during the quarter. E-commerce companies have been particularly active, supported by increased consumer demand for online shopping. More on sector trends.
Global Real Estate Health Monitor
Liquidity beginning to recover as investors adapt
Early indications point to the third quarter as an inflection point in real estate capital markets. Following the sharpest drop-off in transaction volumes in recent history, direct transaction volume declines decelerated during the quarter, down 44% from Q3 2019. Markets of scale with access to capital in Asia Pacific and Western Europe are leading the recovery. Although the U.S. is lagging, it remains the most active market globally with high investor interest. Record low interest rates, government intervention and a diversification of lender profiles continue to support real estate debt markets globally.
Transaction pipelines are rebuilding globally and are offering a sense of optimism for the quarters ahead. Investors remain cautious with many preferring defensive, income-oriented assets. Opportunistic and high-net-worth investors are poised to capitalize on market fragmentation while institutions remain critical of pricing. Markets are firmly in price discovery, and value transparency is expected to rise as activity steadily increases. More on investment.
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Global Real Estate Perspective: Investor and Corporate, November 2020
JLL’s latest Global Real Estate Perspective looks at market dynamics during the third quarter and the impact of COVID-19
