Our latest quarterly reviews of global office and logistics capital markets explore the appetite for deal-making across key EMEA, North America, and Asia Pacific markets, amid a challenging macroeconomic environment
Economic growth has proven to be resilient this year, but this is supporting ‘sticky’ inflation, forcing central banks to increase interest rates in response. This is weighing on sentiment across real estate markets, and transaction activity remains subdued. Much of the negativity is focused on the US office sector, which impacts markets across the world. Nevertheless, with a prime yield of 5% or higher in markets such as City of London and Sydney, investors are showing renewed interest. In the logistics sector, despite the slowdown many metrics across both capital and occupational markets are broadly comparable to pre-Covid levels, suggesting a normalisation in activity. Positive rental growth outlook supports investor confidence in the sector.
To read the key articles within the publication, please click each section below, or to read the full PDF which includes our ‘agent’s view’ then please download a copy of the full report here.
Offices
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Global outlook
Commercial real estate is in a state of stasis, with Q2 transaction volumes 60% down on the year globally. The lack of market activity provides very little transparency on pricing.
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Regional outlook
Q2 data point to a broad-based slowdown in occupational demand globally, however, there are important differences in the supply side of the equation.
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Market view
There are more willing buyers than there are sellers and we are now seeing more buyer competition, which despite the persisting pricing spread, it should further aid stabilisation.
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Logistics
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Global outlook
Investors have not wavered in their conviction for logistics through this down cycle, but have rather chosen to sit out the volatility. The tide is beginning to turn.
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Regional outlook
A yield of around 5% in the US, Australia, and UK is beginning to look attractive again, given prospects for more stability in interest rates and continued upward pressure on rents.
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Market view
Price discovery has characterised the US logistics capital markets since 2022, but clarity is now emerging both around pricing and market fundamentals.
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