H&A Reporter
London based global real estate firm Knight Frank has said the world
economy is in the midst of a synchronised slowdown following several
years of strong growth.
In their Frank global market overview for this month (October), the
firm said that while a global recession looks unlikely, several
countries are at risk of entering a technical recession later in the
year.
The overview said this slowdown and raised risk profile is prompting
investors to not only focus on prime assets but also to consider
opportunities for long-term income.
At the same time, it said global commercial property investment activity has seen a modest easing during the year.
SEE ALSO :Investors count losses in property market slump
The
report said investment volumes in the first half of the year had fallen
in nine out of 10 of the world’s most significant cities: “In contrast,
cities in the next tier down saw rising investment over the same
period.”
“Recent reports suggest there is $330 billion (Sh34 trillion) of unspent
capital in the hands of private equity funds targeting real estate,
while a number of pension funds are still edging up their allocations
towards real estate,” the overview stated.
Strong demand
It said that globally, large, well-developed real estate markets continue to see strong demand for industrial property.
“Driven primarily by strong demand from retailers as they reorganise
their supply chains to better serve an e-commerce driven world,
logistics space on the outskirts of major urban conurbations typically
remains undersupplied and yet in high demand,” said the report.
SEE ALSO :Good times for tenants as rents fall
On the other hand, it said global residential markets are witnessing a general moderation in price growth.
“The Knight Frank Prime Global Cities Index, which tracks the movement
in luxury residential prices across 46 cities, increased by 1.4 per cent
in the year to June 2019, up marginally from 1.3 per cent in March 2019
but still significantly lower than its four-year average of 3.8 per
cent,” it went on.
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