Offices will be the main focus of investors worldwide in 2022. This is one of the main conclusions of the latest edition of 'Impacts', an analysis program conducted by Savills Aguirre Newman on the global real estate market, which delves into the main investment, rental and ESG (environmental, social and governance factors) trends for 2022 in the world's major cities.
Other forecasts emerging from the study are that technology companies will be the most active in the rental market, prime real estate returns will remain largely static and, in terms of sustainable investment, Asian cities are lagging behind other regions.
The consultant highlights that yields will remain unchanged over the next 12 months, until the second quarter of 2022, with the exception of the logistics and residential sectors, where adjustments are anticipated as a result of growing investor interest. As for the office segment, 97% of expert analysts in different international markets agree that it will prove its resilience with yields remaining unchanged in most markets.
According to the report, global office rents will return to pre-Covid levels by 2022, although with differences by region and, especially, in emerging Asian markets, where hiring levels are expected to rise. In addition, it will be technology companies that will lead the absorption of office space globally and will be more active than in 2019.
As mentioned above, the report predicts that, in the global real estate investment market, offices will be the dominant asset in 2022 and foresees a market with more international capital in all segments. In this regard, a 47% cross-border share is expected, with a large share from neighboring countries, compared to 53% of domestic origin.
According to the consulting firm, offices are expected to account for 60% of the total volume of investment in Asian cities such as Shenzhen, Beijing and Seoul. In European cities such as London and Zurich, offices are expected to account for 50% of the total volume, while in Madrid they are expected to account for 35%.
«With herd immunity consolidated in many countries from September onwards, company activity will start to pick up exponentially. At that precise moment, decision-making regarding office space will become more dynamic and investors will regain confidence in offices as an asset class, increasing investment volumes to levels similar to pre-pandemic by 2022 in Spain», remarked Hipólito Sánchez, executive director of the office division at Savills Aguirre Newman.
The logistics and residential sectors, other investment focuses
The residential and logistics sectors will be the next most sought-after options for investors, where the international consulting firm highlights the special focus on residential in North America, the world's largest market for this type of product.
In addition, analysts point to sustainability as an important aspect of investors' strategies in 75% of markets. However, in several major Asia-Pacific cities it is still not considered a key factor by buyers in locations such as Hong Kong, Tokyo, Jakarta and Seoul. According to Savills, however, this situation is likely to change soon given the global importance of the ESG agenda.