PwC: Takeaways from the Real Estate 2020 Outlook

December 3, 2019 | Investments, News, Real Estate

The global consulting firm PwC recently released its Real Estate 2020 outlook.

Real Estate 2020 Building the Future (a report from PwC) looks at the key trends in the commercial real estate market for 2020 and beyond.

They believe that rapid economic and social change will have a much stronger impact on the built marketplace and most industry participants are ignoring or downplaying these powerful trends. All over the world, people are moving from countries to cities to take advantage of greater economic opportunities.

This has enormous consequences for the real estate industry.

Real Estate 2020 Building the Future

PwC believes that the global investable real estate universe will grow substantially, leading to a much larger opportunity set, especially in emerging economies.

The report said: “The global stock of institutional-grade real estate will expand by more than 55% from $29.0 trillion in 2012 to $45.3 trillion in 2020, according to our calculations. It may then grow further to US$69.0 trillion in 2030.”

Much of this growth will be in emerging markets. This could lead to clearer property rights and better tenant quality, the report states.

PwC also suggests that climate change may become a real estate issue in 2020.

“Cities contribute an estimated 70% of the world’s energy-related greenhouse gases while occupying just 2% of its land. Their locations, often in low-elevation coastal zones and large populations make them particularly vulnerable to the impacts of climate change, such as rising sea levels.” Creating sustainable properties will become a much larger issue for developers and owners of commercial real estate than ever before.

The firm also thinks massive technological advances will disrupt real estate markets as the world moves online. This lessens the need for retail space and increases the need for warehouse and logistics real estate. Co-working and telecommuting are also growing and that could lessen office space demand around the world.

You can access the full report here.

Related: U.S. Private Equity Fundraising Hits New Record

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