Mark Firth, Managing Partner - UK and Chairman of The Taplow Group S.A. attended a briefing in London, UK on the Real Estate markets with focus on the 2019 outlook on behalf of Taplow. Hosted by CBRE and Investment Briefings, a panel of senior directors from CBRE, AF Advisory, Principle Real Estate, Fidelity and IMMO Investment Technologies gave their views on the Real Estate sector outlook and took questions from attendees.
Whilst it was agreed that 2018 had shown resilience and growth, Asia had seen a marked dip in investments monies whilst Europe had held firm and the USA had once again seen significant growth in 2018. It was also agreed that the markets globally were at a peak, however this peak has been steady for some time and a downturn or market correction is due if one looked at historical data for the warning signs that are now present. The feeling amongst the panel was that 2019 would see slightly above average growth in the UK, Europe and USA, with pockets of uncertainty driving some markets/sectors down. Most of those who were present, expected 2020 to be the crunch year that would see a market correction.
Key global influencers, such as Asia and USA along with political issues will have effects on the markets, political influencer are to have an impact not seen before, the rise of populism in Europe and elections coming up in key European countries t could lead to nationalistic governments, Brexit uncertainty, continuing trade sanctions across the globe and USA Presidential pronouncements have and will continue to have an adverse effect on investor confidence, however the expected market correction is forecasted to be swift and short.
Key areas for optimism are that office occupancy is holding firm although yields are slightly down as new builds come on stream and companies seek to become more flexible on contracts and deposits.The residential market is growing across Europe and the demand for more residences is strong. The retail sector is anticipated to go through a period of change as “bricks for clicks” continues to gain traction across Europe. Logistics, university residence and senior citizen housing are forecasted to continue to attract investment. There is no doubt that investment opportunities will become scarcer as required yields are harder to seek out but there remains a desire from investors to continue to invest in Real Estate.