Last year was a record year for global commercial real estate transactions. Around $1.75 trillion was collected during that period, according to real estate services firm Cushman and Wakefield. However, according to Funds Global Asia, the world might not see such an amount any time soon.
The figure represented a 4% rise in 2017 ($1.68 trillion), which had also been a 'record year.' Of the world's real estate markets, the Asia-Pacific region shone the brightest in 2018. About $866 billion in investment volumes was recorded in the region. More good news: the region will also see a 1% increase this year, good for $875 billion.
Invest volumes in Africa, Europe, and the Middle East didn't do as good in comparison. These markets suffered a 10.8% decline, collectively reaching an amount of $331 billion. The real estate firm said that this was because of a 'pull-back' that global and domestic sources suffered. It was also due to the conclusion of a few portfolio mega-deals. It is also expected, however, that the values of these countries will rise by 2.5% this year.
This rise may have allowed Singapore to do a reversal of roles, investing in the UK Private Rented Sector (PRS). CRE Herald reported that Singapore-based City Developments Limited (CDL) has bought a $27.5 million SGD freehold site, located in the city of Leeds, from Alpha Real Trust.
The real estate firm also managed to secure full planning permission for the site, which has a residential and commercial Net Lettable Area of 386,000 sq ft and 16,000 sq ft. CDL is eyeing a 664-unit build-to-rent residential project with retail space. The site also contains heritage arches, which are located beneath a viaduct.
This is a positive despite 'Brexit,' which is seen to have a 'limited' impact on the private rented sector. This is because the said sector is driven by local transactions. Sherman Kwek, the CDL Group Chief Executive Officer, said that the UK PRS is within the strategy of the firm to grow their 'recurring income,' as well as to diversify their purchases.
This and other global transactions are expected to create more waves in 2019. They are also seen to surpass last year, and will reach $1.75 trillion while 'investors' continue to test markets to find more 'opportunity.' The combination of sellers and investors will necessitate more strategies that will enable to market to grow, a report from the firm said.
