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2020 Real Estate Performance: A Global Perspective

The world is now amidst what is expected to be a deep but short recession, and this is flowing through to all sectors of the real estate industry. Decision-making processes are taking longer as uncertainty and disruption remain widespread.

Second-quarter data reflects the impact of the global pandemic.

In Q2 2020 global office leasing activity was 59% lower than a year ago while vacancy rates have started to creep up across the regions. The retail and hospitality sectors continue to be the most directly hit, reflecting reduced consumer spending and a pullback in both personal and business travel. Logistics market demand has slowed but remains relatively healthy as sectors such as medical supplies, groceries, and online sales prove to be resilient.

Liquidity rising as headwinds gradually subside

Amidst widespread lockdowns throughout the second quarter, direct investment into global commercial real estate dropped. Sustained travel restrictions and challenges to perform due diligence have seen markets with deep pools of domestic capital and higher transparency prove more resilient and outperform the broader market. As uncertainty continues, investors are deploying defensive strategies, diversifying portfolios and looking to operationally critical sectors such as the industrial and multifamily sectors as well as alternative assets.

Key sector highlights:

  • Investment: Disruption weighs on commercial real estate investment
  • Offices: Impact of the pandemic filters through
  • Corporate occupiers: Employee safety remains a priority
  • Retail: Retailers focused on restoring profitability
  • Logistics: Easing of disruption to global supply chains
  • Hotels: Hotel markets re-open amid uncertainty
  • Living: Multifamily showing resilient characteristics

This article is from JLL. Click here to download the full report.

Photo Credit: Jason Dent on Unsplash.

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