Commercial property market will be shaped by climate change in 2020

commercial propertyThe world’s commercial property markets will be defined this year by low interest rates, socially responsible investing, cautious optimism and climate change as well as six other factors according to Avison Young’s 2020 Forecast. The annual report series claims to provide perspective on how global events, trends and indicators impact commercial real estate in a variety of sectors, including capital markets, office, retail, industrial, multi-family and hospitality, among others.

“Understanding economic, geopolitical and business drivers is central to how we help clients navigate the current market and prepare real estate strategies that have resilience for the future,” said Dr. Nick Axford, Global Head of Research for Avison Young.

Among the trends impacting commercial property strategies and business in the report:

  • Lower for longer: How investors are dealing with a low inflation, low interest rate world.
  • Power to the people: Landlords, developers and occupiers need to pay increasing attention to local political activism, as today’s street protests increasingly signal tomorrow’s policy initiatives.
  • (De)globalisation: The pace of globalization is slowing, and in some areas is starting to reverse as “nearshoring “and the localization of supply chains gathers momentum.
  • Building resilience: Cities across the world are leading the charge in responding to climate change, to ensure economic, social and environmental sustainability
  • (Place)making an impact: Placemaking is becoming the focus of socially responsible investors looking for impact investment opportunities.

“In the US, a strong labor market is supporting market stability, Canada’s market is buoyed by solid fundamentals, and in the UK the political focus is shifting to the debate over the country’s future trading arrangements with the EU,” said Axford. “Though uncertainty remains throughout the world, our forecast reveals that opportunities remain across all sectors – driven by an increased focus on responsible investing, climate change, the implications of continued low interest rates, and other factors.”

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