Global Real Estate Perspective February 2024 – JLL

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As the markets enter 2024 conditions continue to vary, but momentum is expected to build as the year progresses. Debt markets remain liquid, but the cost of debt is still impacting dynamics across most markets globally. Loan workouts and refinancings will continue to be in focus in the elevated rate environment, and lenders are maintaining a sector-focused approach, with sentiment most strong for logistics, living and select alternative growth sectors. Market consensus indicates that rates have now reached peak levels, and downward movements in rates are already being priced into the markets for 2024.

Price discovery has continued across markets globally, with noticeable yield adjustments observed throughout last year. The asset class has witnessed a growing number of bidders re-entering the market since late 2022, supporting the steady improvement in global bid intensity. The U.S. is furthest along in its price adjustment cycle, followed by Europe and then Asia Pacific.

Buy/sell, rent/lease residential &
commercials real estate properties.

As the markets improve, sector diversification will remain in focus to bring critical benefits and mitigate risks across sectors and within them. While out of favor sectors such as offices have faced elevated pressure and scrutiny, the real estate asset class is currently undergoing a dynamic shift in investment strategies, favoring growth sectors across industrial, living, and select alternative sectors. Diversification will take different forms in markets around the world, and even those less-favored sectors still have a place in global, diversified portfolios. In the near term, investors are likely to adopt a cautious approach to navigate uncertainty, and deployment will be a hurdle given varied degrees of barriers to entry, competition and crowding-in strategies in those growth-oriented sectors.

While the pathway to market recovery is anticipated to be uneven and gradual across markets and sectors, the return of predictability will be crucial in stabilizing valuations and unleashing liquidity, paving the way for a more balanced market environment.

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