The current situation, including the pandemic and inflation, highly affects the real estate industry. The global COVID-19 pandemic brought a severe economic crisis to the real estate market. However, despite the circumstances, the U.S economy and European markets managed to recover in 2021, while some raised striking fortunes and development last year.
So far, 2022 has favored commercial real estate and contributed to the growth of the economy. Gross Domestic Product (GDP) and job expansion were incredibly surging and the wages enriched, and retail sales recovered.
Real estate investors looking ahead to 2023, should consider long-term trends and new opportunities to prepare against the impact of the pandemic and the demands of property types and markets.
Employment and Economy
Last year, the real estate industry created a noticeable average of 537,000 employment each month, making the unemployment rate below 4%. The most significant factor of real estate demand is job and wage growth which drives inflation. Although several industries result in labor unavailability, especially in the hotel and hospitality sectors, employment conditions remain stable.
According to Global Commercial Real Estate Services (CBRE), the Euro area Gross Domestic Product (GDP) will rise by 4.7% in 2022. In anticipation of the long-term interest rate inflating from the low levels at the pandemic, it will continue to be advantageous for prime property.
Secondary Markets and Multifamily
The secondary real estate market is the “resale marketplace,” Investors and lenders buy and sell current mortgages, forecasting secondary markets and single-family rentals to accumulate immense momentum.
The European multifamily market had an excellent performance in 2021, with investment volume achieving $179 billion. This year, the European Multifamily is fail-proof and thriving in volume and the total investment market.
One of the factors why multifamily is highly in demand is it is remarkably suitable for work-from-home citizens, aside from the fact that it provides more space for families with a yard or garage.
Workplace
The work-from-home phenomenon delivers flexibility, convenience, and comfort in this pandemic. It saves us money from commuting and wardrobe; however, the benefits of working in the office, such as building teams, establishing collaboration among colleagues, coaching, and support from peers, are put on hold. Multiple businesses will realize the importance of relationships with co-workers and connection to the company at some point.
As we slowly go back to normal, numerous businesses will require the employees to be physically present in the office for meetings, training, team building, and many collaborative engagements. The probability of upgrading offices and renting wider auditoriums for larger meetings is to look forward to. The investors may predict the occupancy and the growth of rentals this year.
In Europe, the office markets are attracting positive leasing stimulation, and the CBRE hopes to nurture it all through 2022.
Investments and Logistics
The demand for residential and logistics assets are distinctly strong. The CBRE forecasts the mass of European commercial real estate investment will soar by as much as 5% this year, which signifies a return to the pre-pandemic state.
At the same time, logistics investment revenue has a prediction that it will stay high due to the volume of capital targeting the sector. Hence, competition to possess land will strengthen, and CBRE envisions rental growth.
The Use of Proptech
Proptech or Property Technology is a technology in the real estate market used to optimize how real estate is bought, sold, researched, designed, contracted, and managed.
The real estate and property technology organization acquired almost $21 billion in 2021 with the effectiveness of home-improvement software, embedded finance, and digital solutions.
The Success Story of Amir Dayan
The COVID-19 pandemic caused significant economic hardship, particularly to the real estate market, forcing many businesses to close or shut down. It results in the occupancy rate of offices has decreased.
Despite challenging times, Amir Dayan and the Dayan family, owners of Africa-Israel Hotels, managed to thrive. According to Israeli newspapers, it was announced that Africa-Israel Hotels will establish with IBI a hotel investment fund in Israel that is expected to raise $500 million. And, in addition, the Dayan family is cooperating with the Israeli hotel chain Isrotel, to purchase 60 hotels in Greece and Cyprus for a massive amount of 1.2 billion Euros.
Mr. Amir Dayan is an Israeli investor, entrepreneur, and real estate professional. Mr. Dayan is known for his successful and expanding portfolios, which bring value to the investors with low leverage in the European real estate.
He was born in 1974 in Tel Aviv, Israel, and currently resides in Amsterdam, Netherlands. Amir Dayan and the Dayan family invested in various real estate private and public stocks, mainly in European real estate and hotels in the UK, Germany, and the Netherlands since 2005.
