Colliers Global Investor Outlook Report anticipates up to 50% surge in global investment in 2021. New report reveals 98% of investors plan to expand their portfolios.
Leading diversified professional services and investment management firm Colliers International Group Inc. (NASDAQ and TSX: CIGI) reveals investors are largely optimistic about a market rebound in 2021, according to its new Global Capital Markets 2021 Investor Outlook. Colliers’ research anticipates a 50 per cent surge in investment activity in the second half of the year, pointing to a broad-based renewal of confidence in the property market as a result of recent vaccine developments and continued government stimulus.
“Based on our global analysis, which gives us a bird’s-eye view of investors’ interests and expected appetite, longer-term tailwinds in the property sector remain intact. With a massive volume of equity raised globally and the need for real assets, investors are eager to deploy pent-up capital and pursue opportunities during the year,” said Tony Horrell, Head of Capital Markets | Global at Colliers International. “We expect to see movement up the risk curve this year, with investors exploring all types of assets from senior care homes to public infrastructure projects.”
The report, which drew nearly 300 respondents including major institutional investors, listed property companies, sovereign wealth funds, private equity funds, family offices and third-party money managers, indicates 98 per cent of investors across all regions aim to expand their portfolios, with approximately 60 per cent looking to expand by more than 10 per cent. Furthermore, 67 per cent of survey respondents in EMEA and 88 per cent of those in the U.S. are planning their next investment as early as the first quarter of 2021.
The Czech Market
“We have been saying that real estate investment is a very attractive asset class for a while. This report is a great confirmation that almost all investors expect to increase the size of their portfolios. This also reflects the situation in our local Czech market. Moreover, supply is so limited here (in all sectors and sub-sectors) and demand is so strong that we see continued pressure on pricing for most assets. We still expect that an investment bought at today’s asking prices will look like an excellent buy in the relatively short-term – in the next one or two years – just as has happened in the last few years. Offices (as also confirmed by the very recent purchase of Parkview by DEKA), residential and logistics are the most attractive sectors here too, but we are also registering interest for manufacturing, retail, hotels and other sectors,“ said Andy Thompson, Head of Investment, Colliers International Czech Republic.“Many of the key themes we are seeing globally will be reflected in the Czech market. Czech logistics will continue to be one the most targeted segments across CEE. As well, Czechia should see an outsized benefit as it relates to foreign capital looking for domestic partners. The Czech real estate market now boasts multiple world-class, Czech based, investment managers that will allow foreign capital to confidently invest, regardless of travel restrictions or similar,” said Luke Dawson, Managing Director and Head of Capital Markets.
Additional key takeaways from the Colliers Global Capital Markets 2021 Investor Outlook:
Top-tier city offices remain a primary asset target. Investors with international capital find the scale and liquidity of the office sector in major commercial hubs such as New York, London and Sydney appealing. Having office assets that meet health, sustainability and technical benchmarks is important to investors.
Logistics and living sectors are thriving. Both sectors were among investors’ top three choices across all regions. Intense demand for these assets will require investors to broaden their geographic focus and build portfolios through joint venture platforms and local partnerships.
Opportunities to repurpose discounted retail and hospitality assets. Investors are expecting to see pricing discounts of over 20 per cent in these sectors. They represent a rare opportunity to acquire core and distressed assets for ambitious repurposing initiatives.
Alternatives, platforms and partnerships are playing a bigger part. Rising demand for alternative assets such as data centres, senior living and life science assets reflects broader structural shifts amplified by the pandemic.
For more details, the full Colliers Global Capital Markets 2021 Investor Outlook is available for download here.