Commercial real estate, sharply recovering from a Covid 19 downturn, is expected to experience a compounded annual growth rate of more than 10% in the next five years, according to a new industry report.
As issued by the Dublin, Ireland-based Research and Markets, the report notes that globally the office sector, we well as hospitality and retail sectors, were substantially impacted by the pandemic, but began to see signs of recovery last year.
A press release accompanying the 150-page report Commercial Real Estate Market notes that in 2021 nearly 400 cities worldwide experience a “robust growth rate of more than 80%.”
“Moreover, 30 million square feet of office space has been absorbed since third quarter 2021.”
The largest absorption rate at 61% has been recorded in the Class A office sector, following by a Class B rate of 32%. The rate dropped swiftly to 7% for Class C properties.
New investments in commercial properties appear to be coming from everywhere, with half of such investments in Europe, by way of example, made by entities based in other countries and comprising nearly $140 million.
The Research and Markets report, in noting the positive impact of a loosening of travel restrictions, social distancing, and general Covid 19 protocols, additionally notes that countries in the Asia-Pacific Region are leading the global office market comeback, due primarily to overall population growth.
Notes the Research and Markets release: “To meet the consumer demand and to adapt the changing retail environment, developers are focusing on different strategies such as remodeling shopping centers to serve multiple purposes, customizing tenant mix, [and] developing new lease models to attract latest business models.”
The Research and Markets was launched in 2002 and offers insight into more than 800 industries across the globe.
By Garry Boulard
