Real estate capital markets remained subdued in the first quarter of 2024. Investment turnover across all sectors fell by 18% on the year, registering the lowest quarterly outturn in over a decade. The economic environment, meanwhile, remains broadly unchanged. Growth has now likely bottomed out, with high-frequency data showing some growing momentum at the beginning of this year, while risks to the outlook are evenly balanced.
Yet ‘sticky’ inflation, particularly in the fiscally charged US economy, is delaying expectations for a policy pivot from the major global central banks. This feeds into investor behaviour; occupational markets broadly mirror the fortunes of the wider economy. But capital markets have detached from this reality, and investors are struggling to agree on what constitutes value in a high-interest rate environment.
Click here to read our Q1 update on the offices and logistics markets.
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