The world market real estate looking for reasons to be optimistic, me manufacturers and investors to discuss the prospects for recovery, which is not expected to be seen soon.
The international property market exhibition MIPIN, taking place in Cannes this week, demonstrates exactly this sentiment against the backdrop of the continued fall in prices in commercial real estate market.
As expected, 20,000 visitors, builders and estate agents have arrived in Cannes with the state of the market as a talking point, while trying to secure deals.
But several of the biggest investors in the real estate market – including US giants LaSalle, Greystar, Hines and Federated Hermes, France’s AEW and Germany’s Patrizia – told Reuters through representatives that they saw faint signs of a recovery in deals. Others, however, appear cautious.
Rising borrowing costs and vacant office space are compounded by weak real estate investment, although some segments of the market, such as data centers and logistics, are doing much better.
Prices in the European commercial real estate market fell 13.9% year-on-year in the fourth quarter of 2023, the biggest drop since the 2009 financial crisis, according to data from MSCI Real Assets.
Prices in American cities are also in sharp decline, with office vacancy rates in cities such as San Francisco and Los Angeles approaching 30%. Deal volume in Europe’s commercial real estate market halved in 2023 to 166 billion euros, marking the worst year on record, according to MSCI.
Still, some investors believe a recovery is around the corner if central banks start cutting interest rates.
“Overall there is a sense of confidence and excitement about this year,” says James Seppala, head of real estate for Europe at Blackstone.
