As the cliche goes, the real estate game is and always has been about “location, location, location.” And that rings as true in the commercial property market as it does in the residential realm.
Staying ahead of the curve means anticipating which areas, both within certain cities and in a more macro sense, are ripe for development and expansion. Myriad factors impact these trends, ranging from shifts in the way business is conducted to the fluctuating costs of materials and how they are imported and taxed.
Where’s the commercial property market headed in 2019 and beyond? That’s a loaded forecast, but there are some harbingers of what’s to come we can key on already:
According to CBRE’s 2019 Commercial Real Estate Outlook report, the global economy’s slowing trajectory will be felt at home, but not necessarily in altogether negative fashion. While economic headwinds dictated by international trade strife, rising costs of new materials and any number of other uncertainties limit the amount of short-term expansion available abroad, there’s still room for growth on the homefront.
To wit, the report notes that while construction and manufacturing rates may slow, affecting the retail sector’s growth projections, the commercial office space may be buoyed. Particularly in burgeoning metro markets, tenants will have room for expansion, whether that’s by way of accumulating additional space or scooping up newly constructed properties on previously underfilled commercial lots. More directly, while new buildings may not be going up at the rates of previous spring and summer seasons, vacancies should dwindle.
Gauging the state of the global commercial market, Deloitte’s 2019 Commercial Real Estate Industry Outlook took a more tactical approach. That is, while the aforementioned factors will continue to dictate where new opportunities arise and existing revenue sustains, savvy investors will continue to leverage technological updates in the interest of operational agility.
Specifically, nontraditional assets such as mixed-use properties and inventive business models will maintain momentum, and in order to accommodate, commercial property firms must possess the requisite tools. Shifts are happening faster too. One key finding from the Deloitte report noted that “survey respondents see a significant impact from technology advancements on legacy properties in fewer than three years.”
And where will those mixed-use properties be concentrated? Globally, Deloitte’s survey participants favour China, Hong Kong and the United States, while Singapore, Canada and Germany are all expected to see significant percentage increases in investment for 2020 and beyond.
While macro trends are just that, these forecasts still serve as helpful edification for any commercial property holders, regardless of the size or scope of their endeavours.
For more insights and guidance, contact the experts at Ray White Surfers Paradise