Infographic | Dec 7, 2023

Infographic: commercial real estate key themes 2024

Looking at the commercial real estate sector in 2024, we see five key themes that are likely to dominate the conversation across various sectors and regions:

  1. Rate cuts offer an upside. We think growth among the major economies will prove more sluggish in2024 than 2023, meaning a weak economic environment for commercial real estate. But the likelihood of rate cuts in 2024 should ease one of the key headwinds facing commercial real estate.
  2. A year of transition for commercial real estate values. We expect global all-property capital values to fall modestly next year before returning to growth in 2025.
  3. Selective opportunities starting to emerge. Our new global relative return index (RRI) suggests that commercial real estate investment opportunities should slowly and selectively emerge next year before becoming more widespread in 2025.
  4. REITs will outperform the private market (again). As certainty improves around inflation expectations and policy rate cuts, REITs are set to outperform direct markets.
  5. New supply will be low. Elevated construction costs and tighter lending conditions combined with uncertainty over exit valuations will drive development completions lower next year across all sectors and all regions.

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