Here’s how much Covid has crushed global RE investment

Worldwide decline in real estate investment tallied 33%, though industrial and residential sectors have been weathering storm

National /
Jul.July 20, 2020 12:35 PM
The coronavirus has been crushing global real estate investment for months, but there are a couple of sectors weathering the storm (iStock)

The coronavirus has been crushing global real estate investment for months, but there are a couple of sectors weathering the storm (iStock)

Global real estate investment was slammed over the first six months of the year, falling by a third compared to the same period last year.

But amid the coronavirus-fueled hurricane a couple of sectors have been holding up, according to a new report from Savills, cited in Bloomberg.

First the bad news: The Asia-Pacific region, where the virus first flared, saw real estate investment fall 45 percent from January through June, according to the report. In the Americas, investment dropped by 36 percent and in the Middle East, Europe and Africa, the overall decline was 19 percent.

Simon Hope, head of global capital markets at Savills, said investment is “expected to remain well below pre-pandemic levels for the rest of 2020 as investors wait for market clarity.” Overall, the International Monetary Fund predicts a decline in global GDP of 4.9 percent this year. Through the end of 2021, the IMF estimates a loss of $12.5 trillion globally.

Still, as bad as things have been, declines have been less severe than the January through June period in 2008, when global real estate investment fell by 49 percent, according to Savills. That number kept falling through the middle of 2009.

And despite the grim outlook, “certain sectors are expected to outperform as investors focus on secure assets, namely logistics, residential and life sciences,” Hope told Bloomberg.

Industrial and residential properties have fared better than hotels and retail, where investment declined 59 and 41 percent, respectively, since government lockdowns halted the global travel industry and forced stores to close down.

In late February, the Blackstone Group agreed to buy a $3 billion portfolio of Japanese rental properties from Anbang Insurance, boosting the market there, according to Savills.

While Congress gears up to debate another massive stimulus bill — potentially including low-cost loans for real estate companies — the European Union remains divided over its latest spending plan, and British Prime Minister Boris Johnson has promised new infrastructure spending, potentially creating more opportunities for real estate investors. [Bloomberg] — Orion Jones


Related Articles

arrow_forward_ios
Clockwise from top left: 162 West 13th Street, 325 Avenue Y in Brooklyn, 1281 Viele Avenue in the Bronx (Credit: Google Maps)
Here’s what the $10M-$30M NYC investment sales market looked like last week
Here’s what the $10M-$30M NYC investment sales market looked like last week
Clockwise: 138 Bruckner Boulevard in the Bronx, 305 East 61st Street, 161 Lexington Avenue and 539 West 54th Street (Google Maps)
Dozen deals spell big week for Manhattan investment sales
Dozen deals spell big week for Manhattan investment sales
(iStock/Illustration by Kevin Rebong for The Real Deal)
NYC investment sales hit multi-year peak to end 2021
NYC investment sales hit multi-year peak to end 2021
A photo illustration of 51-53 East 73rd St, 300 De Witt Ave, 137 Bayard Street and 3044 Coney Island Ave (LoopNet, Rosewood Realty Group/Illustration by Steven Dilakian for The Real Deal)
Ten mid-market investment sales to start your day
Ten mid-market investment sales to start your day
(Illustration by The Real Deal)
Manhattan investment sales top pre-pandemic levels in Q4 comeback
Manhattan investment sales top pre-pandemic levels in Q4 comeback
Renderings of 80 South Street (Oceanwide Holdings, iStock)
Chinese developer defaults on $175M loan for languishing Manhattan supertall site
Chinese developer defaults on $175M loan for languishing Manhattan supertall site
Ashkenazy Acquisition Corporation's Ben Ashkenazy; Clipper Equity’s David Bistricer; Fetner's Hal Fetner; L+M Development Partners's Ron Moelis (Google Maps, Ashkenazy Acquisition Corporation, Fetner, Clipper Equity, L+M Development Partners)
Everything must go: I-sales skyrocket in year-end blowout
Everything must go: I-sales skyrocket in year-end blowout
836 Broadway, 72-79 Warren Street, 82-89 West Broadway, 1124 First Avenue, 290 Dyckman Street, and 2957 Shell Road (Google Maps)
17 investment sales make for a year-end smorgasbord
17 investment sales make for a year-end smorgasbord
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...