Global Market Trends

Quarterly Vantage Point - Q2 2020

Read up on past Weekly Vantage Points to find out the hottest news during the period of Q2 2020.

RealVantage

30 Jun 2020 • 24 min read

Read up on past Weekly Vantage Points to find out the hottest news during the period.

April 2020

Stimulus Funding Working its Way Through Property Sector

After a month-long frenzy, global markets temporarily found support as tougher virus control measures were implemented and massive government stimulus packages were announced. The execution of fiscal stimulus plans should have a meaningful impact on softening the pain of the recession and there will certainly be value ramifications for real estate investors.

On the ground, there are challenges in channelling the stimulus funds to intended beneficiaries. For instance, some landlords are reportedly ignoring government guidelines to protect retailers who cannot pay their rent by gearing up to issue statutory demands for rent arrears. Meanwhile, supply chain changes in Southeast Asia are being accelerated by the coronavirus as major manufacturers expand out of China to new markets like Vietnam.

How the Coronavirus is Accelerating Supply Chain Changes in Southeast Asia

JLL – When factories shut in China during the COVID-19 outbreak, many big companies were able to weather the production dip. A number of multinationals had already taken steps to expand operations into Vietnam last year, in order to avoid new tariffs on goods exported from China to the U.S.

The Impact of COVID-19 on Commercial Real Estate

CREtech – The sudden change in work patterns is affecting the use of office space and the impact that will have on corporate property owners, operators and occupiers will be significant going forward.

Singapore’s GIC Commits A$450m to New ESR Australia Logistics Fund

IPE Real Assets – Singapore’s GIC has backed ESR Australia’s newly launched logistics fund with a A$450m (€248.6m) capital commitment. The vehicle had a A$1bn fundraising target and is seeded with a portfolio, valued at A$715.6m, and includes 20 income-producing assets and 19.4ha of land.

JD Sports Stops Paying Rent to Landlords

The Guardian – JD Sports has become the latest store chain to stop paying rent to its landlords as the high street lockdown has a devastating impact on fashion retailers. The Swedish fashion retailer H&M is also pushing for waivers on its rent and service charge bill.

Some Real Estate Investors Are Readying Up

After their precipitous falls since February, stock markets across the world saw spurts of modest rebounds in the past two weeks. We believe the (1) announcements of massive monetary and fiscal supportive measures worldwide, as well as (2) bargain hunters returning to the market played significant roles behind the modest rally.

Data in real estate are usually lagging indicators but some parallels from the stock market are showing up in the real estate market. From the news we have been reading this week, we are seeing the impact from various stimulus measures start to transmit into real estate. Although risks generally remain skewed towards the downside, there is no shortage of signs suggesting that longer term and cash rich investors are readying themselves to enter the market.

Some Initial Takeaways on How the $2T Stimulus Helps CRE

Wealth Management – Industry pros are continuing to unpack what’s in the massive $2 trillion stimulus package, but already some items stand out that should provide relief to the CRE sector.

U.S. Jobless Claims Soar to Once-Unthinkable Record 6.65 Million

Bloomberg – As states shut down commerce to prevent the deadly coronavirus from spreading, the weekly claims data have been among the first detailed figures to show the devastating economic hit, highlighting the extent to which U.S. businesses and workers are reeling from the global health crisis.

UK House Sales Will Collapse in 2020 as Market Goes into Deep Freeze, Says Study

The Guardian – House sales in the UK will collapse this year as the coronavirus pandemic puts the property market into deep freeze. But prices will fall by only 3% and will rebound next year, according to global consultancy Knight Frank.

Mandatory Code to Guide Commercial Rent Relief

Business News – Landlords will be forced to reduce commercial rents by the same proportion that the tenant’s revenue has fallen due to the COVID-19 outbreak, under new mandatory code of conduct announced by the federal government today.

Asian Tycoons Hunt for Cheap Assets After Market Rout

The Business Times – Asian tycoons are looking to snap up assets pummelled by the deadly coronavirus at bargain prices, but they are also facing hurdles as more governments seek to deter foreign takeovers of local firms.

Traction Remains for Defensive Real Estate Investment

As the pandemic episode continues to play out in many parts of the world, early data points are streaming in, giving a glimpse of the potential impact on both the economy as well as real estate market. Sharp contraction for China’s first-quarter GDP foreshadows the pain expected for other countries.

Despite the anticipation of upcoming recessions, traction remains for investment strategies adopting longer-term horizons and defensive qualities as some institutional investors moved ahead to acquire strategically located prime assets while others picked up resilient non-discretionary retail assets.

With downbeat news hogging headlines these days, we wrap up this week’s Vantage Point with news that a COVID-19 cure or vaccine could possibly be nearer at hand.

China Says its Economy Shrank by 6.8% in the First Quarter

CNBC – China reported Friday that its first-quarter GDP contracted by 6.8% in 2020 from a year ago as the world’s second-largest economy took a huge hit from the coronavirus outbreak, data from the National Bureau of Statistics of China showed. The contraction in the first quarter is the first decline since at least 1992, when official quarterly GDP records started, according to Reuters.

Dexus, GIC Make $644 Million Rialto Towers Play

The Urban Developer – ASX-listed Dexus has struck a joint venture deal with Singaporean sovereign wealth fund GIC snapping up a half share in Melbourne CBD’s Rialto Towers, stirring confidence in the office tower market.

Link REIT Buying Sydney Office Tower from Blackstone for A$683M

Mingtiandi – Asia’s largest real estate investment trust’s purchase of 100 Market Street in Sydney is its first property outside of Greater China. Link REIT is paying the equivalent of A$24,062 per square metre for its Sydney foothold. The investment is understood to have been made at around a 4 percent yield, with the property carrying a weighted average lease expiry (WALE) period of 8.45 years.

Investor Confidence in Supermarket Assets Pick Up

The Urban Developer – Non-discretionary retail property has become highly sought after by investors because of its limited exposure to online retailing. Supermarket giant Woolworths has continued the quick-draw sell-down from its retail property portfolio with the sale of two shopping centres in NSW and Victoria.

Early Peek at Data on Gilead Coronavirus Drug Suggests Patients are Responding to Treatment

Stat – A Chicago hospital treating severe COVID-19 patients with Gilead Sciences’ antiviral medicine remdesivir in a closely watched clinical trial is seeing rapid recoveries in fever and respiratory symptoms, with nearly all patients discharged in less than a week.

Hospitality Real Estate Finds Temporary Alternative Use

The world continues to struggle with containing the spread of COVID-19, with many countries extending their lockdown period to hunker down and ride out the storm. As a result, economies worldwide are placed in a vulnerable spot; relying greatly on stimulus and concessions to stay afloat.

Extraordinary measures were also taken by governments to protect and sustain businesses. In numerous cities, major infrastructure projects have been fast-tracked to boost local economies and fortify the real estate sector.

Meanwhile, commercial property landlords in the UK have been temporarily banned from demanding rent arrears from suffering tenants.

The hospitality sector – amongst the hardest hit – are putting their rooms to good use by housing quarantined personnel, offering free or discounted rooms to healthcare professionals; exemplifying the much-needed solidarity during these difficult times.

Victoria Green Lights Mega Projects to Boost Economy

The Urban Developer – The combined approved projects, worth more than $1.5 billion in building costs alone towards Victoria’s economy aims to prop up the struggling development industry over the short, medium and long term.

How Hotels in Asia Pacific are Stepping Up

JLL – As the world grapples with travel restrictions and social distancing measures related to the coronavirus pandemic, the hospitality sector has been among the worse hit. But hotels across the Asia Pacific are putting their empty rooms to good use.

Commercial Property Landlords Banned from Demanding Rent Arrears

The Guardian – Commercial property landlords in the UK have been temporarily banned from taking legal action against tenants who have not paid their rent, to protect retailers and businesses from “aggressive rent collection” during the coronavirus crisis.

Global Sentiments for Real Estate Appear Less Pessimistic: Savills

Edgeprop – In a survey comprising 31 countries, Savills has gathered that the property outlook worldwide has improved slightly – 19% of countries reported “severe” negative impact, an improvement from the 29% on reported on March 31.

May 2020

Property Markets Eager to Re-open

While the number of COVID-19 cases around the world continues to climb, it is encouraging to learn that several countries have turned the corner and are restarting their economies.

Australia has started to relax measures, states such as Western Australia and South Australia have begun to re-open schools, malls and parks. UK has apparently passed its peak, and the government is promising a lockdown exit plan.

Across UK, Australia and the US, housing markets have been sharply affected as transaction volumes plummeted amid the lockdown. Although some reports have forecasted up to 20% drop in property prices, there is consensus that a rebound will follow very quickly once the dust settles.

Relieved Perth Real Estate Agents Plan Home Opens for This Weekend

WAtoday – Perth real estate agents are breathing a sigh of relief after the West Australian government included WA government home opens and display village inspections involving up to 10 people among newly permitted gatherings.

Coronavirus Australia: Property Prices Forecast to Dip up to 10 Rer Cent Before Rallying

9 News – “While the coronavirus situation is somewhat different, given it’s a temporary public health emergency, I believe property prices may temporary soften by five to 10 per cent at most but rebound relatively quickly.”

UK Housing Warning: Expert Makes 2020 Winter Property Sale Prediction Amid Virus Pandemic

Express – The UK housing market could be set for disaster if a second wave of coronavirus hits the country later this year, an industry expert has warned.

Where Home Prices are Heading in the Age of Coronavirus

Money – Despite the difficulty of listing and closing house sales, many real estate market fundamentals are strong, real estate experts say. With mortgage rates hovering at record lows—the average for a 30-year fixed-rate mortgage was 3.33% the week ending April 23.

Starwood CEO Barry Sternlicht: ‘We’re Buying Now. We’re on Offense.’

BISNOW – Starwood Capital Group, a private investment giant with over $60B in assets under management, is actively searching for buying opportunities amid the coronavirus pandemic, Sternlicht, who serves as chairman and CEO, said Wednesday

Hints of Post-Virus Real Estate Landscape

Over a third of the world’s population is now living under some form of lockdown due to coronavirus. The foretold impacts of the office and residential sector have begun to crystallise as more homebuyers in the UK are plotting a move out of the city to rural areas with some concluding that home working is here to stay - companies like Amazon have allowed selected employees to work from home till October.

The winds of change are stirring up property markets, but not all negatively. Brand-name cities with solid market fundamentals will be difficult to uproot, while liveable low-density cities will enjoy new demand. Conversely, vacation and second-home markets in general are expected to rebound slowly. Interest will pick up as air travel returns, but it could take 5 to 10 years for meaningful recoveries in some cases.

Homebuyers 'Plotting Move to Country' Amid Increased Home Working

The Guardian – After the lockdown, the exodus. Estate agents are reporting a surge in the numbers of would-be homebuyers plotting a move out of the city to a rural area or smaller town as people conclude that home working is here to stay.

How and Where COVID-19 is Creating Opportunity

Forbes – The global shutdown in response to the coronavirus pandemic is going to have big effects on real estate markets worldwide. However, the situation we’re about to see play out will not be the same as what we witnessed in the wake of the 2008/2009 global real estate crash.

Amazon Tells Employees They Can Work From Home Until October

PCmag – Some Amazon employees may not be returning to their office for another five months following the latest guidance set out by the company. By limiting the number of employees returning to the office, Amazon's job of not spreading infection is made much easier.

Brookfield Unveils $5bn Retail Rescue Fund

The Urban Developer – The package, designed by Brookfield vice-chairman Ron Bloom, is a boon for a sector that has largely ground to a halt. The NYSE-listed asset manager has material exposure to malls in the US through its listed vehicle Brookfield Property Partners.

How Companies are Supporting Employees During COVID-19

JLL – Beyond the technological adjustments to online meetings and video calls, people are struggling with isolation and uncertainty, childcare responsibilities, or even grief. In response, organisations are creating wellness programs, relief funds and a host of other initiatives to support employees amid the coronavirus pandemic.

Property Transactions Down

As more countries lift distancing restrictions and move towards re-opening their economies, some early data points provide an idea of how real estate investment has been impacted by the virus outbreak.

While transaction volumes have fallen due to the coronavirus, certain sectors are experiencing a strong pick up in investment interest. Notably, logistics and alternative sectors like student accommodations have benefited from this trend. Meanwhile, UK house prices and rental payments for US multifamily homes have remained resilient so far, despite softening market fundamentals.

Real Estate Investment Falls in Q1, Tracking Pandemic Spread

JLL – Direct investment in commercial real estate dropped 5 percent year-on-year to US$200 billion, according to figures from JLL. The spread of the coronavirus has had an abrupt and widespread impact on financial markets around the world. Mounting evidence suggests that global economic growth contracted in Q1, marking the first quarter of contraction in 11 years.

Asia Logistics Attracts Billions as a Post-Pandemic Winner

Caixin Global – As China shakes off the economic impact of the coronavirus outbreak, investors have flocked to funds focused on logistics facilities there and elsewhere in Asia, anticipating that growth in e-commerce will drive strong demand even after the pandemic.

Scape Seals A$2b Urbanest Student Digs Deal

Brisbane Times – Evergreen, M3 Capital Partners' principal investment vehicle, has sold its 6875-bed Urbanest Australia student accommodation portfolio and platform to global operator Scape. The sale, which won Foreign Investment Review Board approval in March, is valued at more than $2 billion and is the largest ever student accommodation transaction in Australia.

UK House Prices to Fall on Coronavirus, But Analysts Don't Expect a 2008-like Collapse

CNBC – U.K. house prices will fall "modestly" in the coming months, but are unlikely to drop as dramatically as in 2008, two analysts told CNBC. Some key differences between the current situation and 2008: the banking system is more resilient; there's a lot of support from the government to help households weather the current crisis; and interest rates are very low - all these factors should support demand across the U.K.

US Build-To-Rent Payments Pick Up in May

The Urban Developer – From a survey of 11.4 million apartments in the country 80.2 percent of households made a full or partial rent by 6 May according to the National Multifamily Housing Council rent payment tracker. The drop was only 1.5 points compared to May 1 - 6, 2019 where 81.7 per cent of households had paid. This result came despite more than 20 million people losing their jobs in April.

Residential Sector Resilience

As countries begin to re-open their economies, more news and data points emerge to give a glimpse of the impact of the pandemic on the real estate market so far.

While vulnerable sectors like hospitality and retail have felt the brunt of the virus situation, this week's news flow presents a picture of how the residential sector has by and large been relatively resilient. Coming out of the lockdown period, buyer and seller confidence has generally increased as inquiries and transaction volumes find some momentum.

Real Estate Making 'Stunning' Coronavirus Comeback: Expert Agents

Fox Business – Real estate is making a “stunning” recovery as demand for housing rises at rapid rates and the coronavirus curve flattens, according to a leading real estate broker.

Brisbane Property Market Holding Strong, Sentiment Improves as Coronavirus Restrictions Lift

Domain – Property experts across the city reported a collective rise in the real estate mood to welcome “the tail end of COVID” but said despite rising inquiry numbers and increased vendor activity, local home hunters were slow to hit the pavement, preferring to stay at home while browsing for a new abode.

Q & A: Industry Experts Discuss California’s Real Estate Market

Forbes – Real estate industry experts discuss California’s real estate market. With Compass California President Mark McLaughlin and CoreLogic’s Deputy Chief Economist Selma Hepp. The conversation focuses on the Bay Area and Southern California markets.

Australian Property Market to Recover in 5 Years: PIPA

The Urban Developer – Although the full impact of COVID-19 is yet to hit the Australian property market, researchers predict the downturn won't last long. Once the economy gains momentum, the property market recovery should be swift, a trend often seen in the first five years after a recession according to the Property Investment Professionals of Australia.

Asian Takeaway: Ultra-Rich Foreigners are MORE Determined to Buy Up Australian Property During COVID-19 and They're Not just from China

Daily Mail – Crazy rich Asians, accredited investors, are even more interested in Australian property during the coronavirus pandemic and they don't just come from mainland China.

Cashed-up investors from China, Hong Kong, Singapore, South Korea and Japan have spent more on Australian real estate during the past decade than buyers from the United States, the UK, Canada, New Zealand and Germany, Foreign Investment Review Board data showed.

Fundamentals Versus Weight of Capital

It would hardly surprise anyone that real estate transaction volumes have plunged in 1H 2020. Deal consummations had been significantly hampered by social distancing measures as well as the wide big-ask spreads between buyers and sellers. Yet even as volumes have pulled back, a stirring of eager capital sitting on the sidelines have not gone unnoticed.

Read also: Implications of COVID-19 Aftermath on Real Estate Sectors

As countries gradually roll back distancing measures, we expect to see a highly uneven market emerge. On one hand, deteriorating market fundamentals globally are dragging on prices. On the other, the immense weight of investment capital amidst an ultra-low interest rate environment means prices in the investment-grade segment of the real estate market should see limited downside.

The Bull Case for Real Estate Investment

Bisnow – European real estate investment activity is set to plummet by 50% before rebounding sharply within the next 12 months, according to a new prediction from Savills. The broker said neither the speed nor the depth of the crash will be as bad as the Global Financial Crisis, when volumes across the continent plunged by 72% between 2007 and 2009.

Despite the spread of the pandemic across the continent, Savills said in most European markets there are indications that investors remain active, particularly in the prime market segment, where there are several deals in progress and minimal price discounts.

Asia-Pacific 1st Quarter Real Estate Investment Plunged by 26%

Forbes – Investment in Asia-Pacific commercial real estate plunged by 26% during the first quarter of 2020 as the spread of COVID-19 hurt businesses, according to global real estate consultancy JLL who expects trading volumes to bounce back more strongly in the second half of the year. “There are many well-capitalised investors waiting for investment opportunities, and we think the dislocation in the markets will create strong deal flow across most sectors.”

China Home Price Growth Accelerates in Property Market Boost

Bloomberg – China’s house-price growth accelerated in April as the central bank’s credit easing gave the property market a much-needed lift out of the coronavirus shutdown. While most easing measures didn’t target the property sector directly, buyers expect mortgage costs to decline further as the base rate it’s pegged to has been reduced twice this year.

Rich Chinese Eye Luxury Properties from Singapore to Sydney, Ahead of Anticipated Weaker Yuan

SCMP – As coronavirus restrictions ease, wealthy Chinese buyers are making a move in property hotspots like Shanghai, Seoul and Sydney as their key market selection for real estate investment. In Singapore, virtual tours and photos have been enough to seal multimillion dollar deals, pointing to how transactions are evolving.

The rush to add real estate has led to a jump in upmarket housing prices in China, while offering some support for Asian property markets hit hard by the coronavirus pandemic.

UK Property Market Could Fall 13%, Housing Experts Predict

The Guardian – The range of forecasts from the major researchers is markedly wider than usual. At one end is the Centre for Economics and Business Research, which predicts that 2020 prices will be down by 13% as "a lack of transactions, high uncertainty and falling incomes take their toll”. But the estate agent Savills said the hit to the market could be more like 5%, and a third of valuation surveyors are predicting that price falls may be limited to 4% or less.

June 2020

An Uneven Real Estate Picture

After months of lockdown, several countries have begun to ease movement restrictions, allowing people to head outdoors for more than just essentials. Some businesses are permitted to reopen, breathing new life to the greatly deprived economy. As footfall starts to increase in various cities, the effects across real estate spaces are anything but uniform.

Major US cities such as Seattle and Austin are experiencing quick recovery in the housing market, whereas UK home prices fell for a third straight month. In the office space, landlords are remaining calm and getting ready to adjust to new working norms. Meanwhile, hotel owners in Asia are hastily sourcing for short-term financing solutions to bridge current cash flow shortages.

House Price Outlook More Optimistic: UBS

The Urban Developer – UBS economists have upgraded their price forecasts for Australia’s housing market, while looking to stamp duty relief and support for build-to-rent as further reform. UBS expects home prices to fall by between 5 and 10 per cent during the next year, an upgrade from its previous forecast of at least a 10 per cent drop.

Why Office Real Estate Landlords Aren't Panicking Just Yet

Financial Post – With tens of millions of employees working from home or laid off, the future of the workplace is now a primary concern for commercial landlords and tenants. But do these developments mean the end of “the office real estate” as we know it? Not really. A new normal will likely emerge, involving a “total workplace ecosystem” comprising more than a single destination and including a combination of virtual and physical places.

Asia’s Hotels Owners Look for Financing Solutions Amid Coronavirus Uncertainty

JLL – Faced with unprecedented challenges from the COVID-19, hotels owners across Asia are turning to creative financing solutions to ride out near-term turbulence. The impact of the pandemic continues to hurt the hospitality industry across Asia, with many hotels and investors witnessing an unparalleled cash crunch as significantly constrained revenues struggle to offset fixed costs.

A Booming Housing Market: Real Estate in These Cities is Quickly Recovering

Forbes – As mortgage applications, price appreciation and slowly growing new listings indicate that the national real estate industry is finally mending from the coronavirus, some housing markets are charting faster and stronger recoveries than others.

The reasons why some cities are bouncing back quicker boil down to robust local economies, less severe coronavirus-prompted lockdowns and, in some cases, low numbers of COVID-19 infections.

UK House Prices Fall for Third Month in a Row as COVID-19 Stifles Market

The Guardian – House prices fell for a third month running in May as lockdown measures to tackle the coronavirus stifled home-buying activity, according to figures from the mortgage lender Halifax.

The bank said the average price of a home in the UK dropped by 0.2% over the month and stands at £237,808. Over the last three months, prices were down by 0.5%.

Rebuilding Confidence in Real Estate Investing

Against a backdrop of high unemployment, low interest rates and volatile markets, some institutional investors are leaning toward the barbell investment approach. On one end, they look to scoop up assets in the distressed retail and hospitality sectors, betting on a quick and sharp rebound in the post-COVID world. On the other hand, accredited investors are also balancing their portfolio with defensive assets such as data centres, which had held up strongly since the onset of the pandemic.

Despite concerns of a second virus wave as governments gradually loosen lockdown measures, market confidence has begun to turn the corner in certain cities. For instance, Australia’s consumer sentiment has now recovered back to nearly pre-COVID levels. Notwithstanding the encouraging survey result, this level remains 7 per cent compared to a year ago.

Niche Property Assets Defy Real Estate Doom and Gloom

Financial Review – Investor risks might be higher than at the beginning of the year but so are the rewards for those willing to make the most of new opportunities, big discounts and less competition for quality assets.

Real Estate Investors Taking 'Barbell' Approach to Crisis

The Business Times – The changing strategies are playing out against a backdrop of high unemployment in and low interest rates in the United States that may persist for a long time, Mr Van Konynenburg said on Tuesday in an interview on Bloomberg Television.

Consumer Sentiment Back to Pre-COVID Levels

The Urban Developer – Consumer sentiment is now back around pre-COVID levels as lockdown restrictions begin ease across the country. Westpac reported an increase of 6 per cent in its consumer sentiment index reaching 94 points in June, lifting from 88 points in May.

Playing Defence: Investors Looking to Data Centres

JLL – With the global economy under pressure, real estate investors are hunting for defensive strategies that are more likely to see them safely through the downturn. Data centres – buildings responsible for channelling our increasingly online lives – have crept to the top of that list.

As Domestic Tourism Returns, Hotel industry Looks for Bright Spots

JLL – Last month, China celebrated the tenth anniversary of its annual campaign to promote domestic tourism. But this year’s China Tourism Day took on a quirkier and more urgent tone due to COVID-19. Efforts to encourage travel after months of lockdown included online tours, live-streaming local produce, and promotional tactics like having the chairman of Chinese travel agency Trip.com donning costumes to hawk discounted hotel bookings.

Post COVID-19 Real Estate Investing

As countries emerge from lockdowns, stakeholders in the real estate investment circle are shifting focus from fire-fighting to managing the post COVID-19 era. To this end, RealVantage released an article detailing some broad views on the major real estate sectors which we include in this week's edition of Vantage Point.

Meanwhile, one of UK's lenders has started the ball rolling on tightening LTV for first-time home buyers as they attempt to manage the potential risk of borrowers entering a negative equity situation. But in general, sophisticated institutional investors are displaying desire and optimism for the real estate asset class, especially in the face of an ultra low interest rate environment going forward.

Implications of COVID-19 Aftermath on Real Estate Sectors

RealVantage – Social distancing has directly affected the way people live and interact with physical space, and that has greatly dented the demand for various types of space, creating an unprecedented crisis for the real estate industry. Real estate players will now think about how the real estate’s playing field may transform, and alter their strategies to strengthen their positions through this crisis.

Nationwide Triples Minimum Deposit for UK First-time Buyers

The Guardian – One of Britain’s biggest mortgage lenders, Nationwide, is to triple the minimum deposit that first-time buyers must put down as it braces itself for falling house prices and the possible return of negative equity. Nationwide said from Thursday it will withdraw all its new loan deals where the first-time buyer only puts up a 5% deposit and set a new minimum deposit of 15%.

Real Estate Yields in APAC Markets More Appealing than Those on Government Bonds, Equity Markets

Financial Express – Compared to low or negative yields on government bonds and the possibility of falling dividend yields for equity markets, the yields offered by real estate assets in APAC markets look attractive. For instance, yields in the office sector in developed APAC markets range between 2.8% for prime grade Hong Kong offices at the low end and 5.8% for Auckland at the high end. Yields on Grade A office assets in emerging markets are higher, ranging up to about 9.0% for Indian cities.

Big-Box Industrial Real Estate to Remain Stable in 2020, Though Changes Abound

GlobeSt.com – Big-box industrial facilities face challenges and changes during the fluid COVID-19 situation, though the sector should remain stable in 2020, according to a new report.

“While there are some major factors affecting the broader U.S. economy, the need for stronger omnichannel strategies should keep industrial real estate demand active in the coming year,” Colliers International says.

Investors Remain Optimistic About Commercial Real Estate, Says Study

Mile High CRE – According to real estate advisory firm Hodes Weill & Associates, that has an office in Denver, investors are taking a measured, cautious approach to new investments and focusing on portfolio management.

Results from a recent study showed that while 59 percent of investors anticipate a slowdown in investment activity over the next six to 12 months, with impacts dissipating by mid-2021, many are beginning to focus on allocating capital to take advantage of anticipated distress and the evolving demand for real estate over the coming years.

Overall, investors are demonstrating continued commitment to the asset class, and the majority of investors remain under-allocated to real estate.

Retail Sector Takes the Hit but All is Not Lost for Real Estate Market

With the month of June coming to an end, everyone is eagerly awaiting the second quarter's earnings and market reports. The retail business is anticipated to suffer one of the worst performing quarters as many countries were at near standstill in the last few months.

Telltale signs are emerging from UK where retailers coughed up just 14% of the £2.5bn quarterly rent bill due this week, signalling the deep financial troubles plaguing the industry.

Interestingly, consumers in Australia are coming back strongly with preliminary retail turnover for May posting the largest increase in 38 years, rising 16.3% from a month earlier.

Australians Come Out of Lockdown and Spend Like Never Before

Bloomberg – Australians took to the shops in May as the initial easing of the COVID-19 lockdown, combined with stimulus cash flowing into bank accounts, fuelled record monthly gains. Preliminary retail figures showed turnover rose 16.3% from April.

UK Retailers Pay Only 14% of £2.5bn Rent Due This Week

The Guardian – Shop landlords traditionally collect rent on a quarterly basis with the bill for the next three months supposed to have been settled on Wednesday. However retailers paid just 13.8% – leaving landlords waiting for more than £2bn in rent.

How Working from Home is Changing the Way We Think About Where We Live

Forbes – “It takes three months to form a habit,” says Mollie Carmichael, a principal at the real estate research firm Meyers Research. “We have been in COVID for three months, and because of this three-month period, we have gained trust and routine for working at home."

Victoria Fast-Tracks $1.1bn in Project Approvals

The Urban Developer – Two towers at Collins Wharf and the $220 million Geelong Precinct are the latest projects to be fast-tracked by the Victorian government in a bid to kick start the state's economy. Seven development projects worth more than $1.1 billion have been given the nod in the latest tranche of planning permits issued by the state government.

How the E-Commerce Boom During COVID-19 is Changing Industrial Real Estate

JLL – During the coronavirus pandemic, people are buying essentials online more than ever — forcing producers of staple goods to scramble for additional warehouse capacity and companies to rethink supply chains. Online sales increased by 40% between May 26 and June 1, when compared with the period between February 24 and March 1.

Vantage Point is a curated cache of the latest trends in real estate investing repurposed from media outlets and websites around the globe. Each article is a succinct wrap-up of key news points for an easy read. Outbound links, embedded in each editorial, are attributed to original external sources. RealVantage makes no warranties or representations regarding the accuracy, completeness or veracity of the information or data contained in such external sources. Editorials under the Vantage Point vertical do not reflect the views of RealVantage, in part, or in its entirety.

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Disclaimer: The information and/or documents contained in this article does not constitute financial advice and is meant for educational purposes. Please consult your financial advisor, accountant, and/or attorney before proceeding with any financial/real estate investments.