Real estate investment environment more positive in 2024

Savills' researchers from around the world are predicting a more positive real estate investment environment in 2024, with 57% of respondents expecting strong growth in investment activity next year, but this figure rises to 70% for residential real estate and 66% for industrial and logistics, according to a report by Savills.

Savills also expects investment activity to pick up strongly in Q3/2024, with the recovery driven by a number of major markets – including the US and UK. The consultancy also has the highest expectations for activity in global real estate markets, particularly in the multi-family sector, where demand is outstripping supply in many regions, and the logistics sector, which is being driven by strong fundamentals.

Real estate investment environment more positive in 2024 figure 1 — Real estate investment activities will increase sharply in the third quarter of 2024.

In addition, 90% of Savills researchers globally expect global apartment rents to rise, with 81% predicting rent increases in the general residential market. In the logistics sector, 92% predict rents will increase or remain stable due to strong consumer demand and manufacturing expansion post-COVID-19.

In the office and retail sectors, the majority of Savills researchers forecast rents for high-quality real estate to remain stable or increase, whether it is prestigious city centre office space (73% of researchers predict rent increases) or quality retail outlets with strong domestic or tourist footfall (81%).

Meanwhile, in the secondary office market, 70% of survey respondents expect rents to remain stable or fall over the next year – any rent increases may depend on plans to upgrade these assets.

Commenting on the market, Ms. Eri Mitsostergiou, Director of Savills World Research, said that 2024 should be a better year for global real estate investors, with a sustained recovery expected as yields become more attractive, rents for prime properties increase and price corrections begin to re-adjust expectations of buyers and sellers in markets where this has not yet been seen.

“Our researchers predict broad similarities in the performance of premium assets across each segment, however, there is potential for geopolitical volatility in regions that will impact secondary assets.

While not present in all regions globally, the researchers also highlighted that strong demand dynamics and limited supply underpin the significant investment potential of smaller and less liquid sectors such as data centres, life sciences and education,” said Savills World Research Director.

Source