According to Colliers International Group’s new Global Capital Markets 2021 Investor Outlook, investors are largely optimistic about a market rebound in 2021.
Colliers anticipates a 50% surge in investment activity in the second half of 2021 as global real estate markets rebound, pointing to a broad-based renewal of confidence in the property market as a result of recent vaccine developments and continued government stimulus.
“Based on our global analysis, which gives us a bird’s-eye view of investors’ interests and expected appetite, longer-term tailwinds in the property sector remain intact. With a massive volume of equity raised globally and the need for real assets, investors are eager to deploy pent-up capital and pursue opportunities during the year,” said Tony Horrell, Head of Capital Markets | Global at Colliers International. “We expect to see movement up the risk curve this year, with investors exploring all types of assets from senior care homes to public infrastructure projects.”
Colliers’ global investor survey was conducted across the regions of the Americas, EMEA and APAC in November and December 2020, and drew close to 300 respondents, including major institutional investors, listed property companies, sovereign wealth funds, private equity funds, family offices and third-party money managers.
The survey results highlight that 98% of investors across all regions aim to expand their portfolios this year, with around 60% looking to expand by more than 10%, including 23% who want to expand by 20% or more.
Furthermore, 67 per cent of survey respondents in EMEA and 88 per cent of those in the U.S. are planning their next investment as early as the first quarter of 2021.
The roll out of COVID-19 vaccines will have a very positive impact on markets and global geo-political stability, courtesy of a Brexit trade deal and a U.S. election result, provide much needed certainty. These factors will help drive market growth in 2021, says Colliers.
Although a large proportion of investors are looking to get out of the blocks early and identify acquisitions in Q1, Colliers experts believe the rebound in activity will gain strength from Q2 onwards due to lingering uncertainty over travel in the first quarter.
Additional key findings from the Colliers Global Capital Markets 2021 Investor Outlook report include:
- Top-tier city offices remain a primary asset target. Investors with international capital find the scale and liquidity of the office sector in major commercial hubs such as New York, London and Sydney appealing. Having office assets that meet health, sustainability and technical benchmarks is important to investors.
- Logistics and living sectors are thriving. Both sectors were among investors’ top three choices across all regions. Intense demand for these assets will require investors to broaden their geographic focus and build portfolios through joint venture platforms and local partnerships.
- Opportunities to repurpose discounted retail and hospitality assets. Investors are expecting to see pricing discounts of over 20 per cent in these sectors. They represent a rare opportunity to acquire core and distressed assets for ambitious repurposing initiatives.
- Alternatives, platforms and partnerships are playing a bigger part. Rising demand for alternative assets such as data centres, senior living and life science assets reflects broader structural shifts amplified by the pandemic.
To see the full 2021 Global Investor Outlook report, click here.