Real estate investment volumes in the Middle East and around the world fall significantly in 2020, as the coronavirus hindered and poor financial conditions dampened sentiments and demand.
Investment volumes over Europe, Middle East, and Africa (EMEA) reached $282 billion in 2020, building a 17 percent fall year-on-year, asper the JLL’s recently provided Global Real Estate Perspective.
All over the world, deals columns fall 28 percent to $762 billion from a registered a=cost of capital markets activity in 2019.
The activity has recently geared up, with total investment volumes touching $267 billion in the fourth quarter, a rise of 65 percent from last quarter in 2020. However, JLL provided that the current wave of the pandemic, accompanied by economic conditions, could carry on to pose risks to recovery.
Confidence
In the major markets, France, Germany, and the United States record deals costing $150 billion in the last quarter, showing a rise of 81 percent in the third quarter.
“As 2020 progressed and the pandemic matured in markets, investors have learned to better navigate the uncertainty. This confidence was reflected in higher levels of capital deployment in the latter part of the year,” said Sean Coghlan, global director for capital markets research and strategy at JLL.
JLL provided that the upgrade activity was most general in certain parts of the market, containing logistics and multifamily sectors and high-quality advantages.
Optimism improving
“Despite the divergence in many parts of the market, optimism continues to improve on the heels of recovering liquidity, and the low cost of debt is supporting cap rate compression in sectors with growth and favorable demand outlooks,” said Coghlan.
JLL also noted that based on its interactions with investors, “optimism continues to improve” on the back of deeper liquidity and as measured by rising bidding activity all over the world.
“However, signs of improvement in the capital markets could be impacted by the ongoing wave of lockdowns and depressed economic conditions,” it added.