{"id":1004382809,"date":"2020-01-16T06:07:05","date_gmt":"2020-01-16T14:07:05","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004382809"},"modified":"2025-02-28T00:21:42","modified_gmt":"2025-02-28T08:21:42","slug":"avison-youngs-top-cre-trends-for-2020","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/avison-youngs-top-cre-trends-for-2020\/","title":{"rendered":"Avison Young\u2019s Top CRE Trends for 2020"},"content":{"rendered":"
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Image via Pixabay<\/em><\/p><\/div>\n

A global forecast, combined with local market reports, are providing commercial real estate owners and occupiers with information on how those trends can impact their investments in the year ahead. Avison Young’s global report also provides perspectives for property owners and occupiers on how global events, trends and indicators could impact commercial real estate this year. While the report notes there is still uncertainty around the world, the forecast reveals there are investment opportunities across all sectors that are being driven by low interest rates as well as economic, geopolitical and other issues driving demand.<\/p>\n

Nick Axford, global head of research for Avison Young, told Commercial Property Executive<\/em> that volumes in 2020 may not be as high as in recent years but the \u201cmarket still has potential to grow.\u201d <\/em><\/p>\n

It should not be a surprise that the top trend on Avison Young\u2019s list for 2020 is \u201clower for longer\u201d\u2014a look at how investors are dealing with a low-inflation, low-interest rate world that is expected to continue keeping capital flowing despite some uncertainties as the real estate market cycle enters its second decade. \u201cWe don\u2019t anticipate major downturn in the economy, so income from real estate should hold up. Equally, we don\u2019t anticipate a big surge in growth or inflation, so interest rates are likely to stay low,\u201d<\/em> Axford told CPE.<\/em><\/p>\n

Axford said he expects to see continued demand from investors attracted to the combination of income and capital growth potential and capital protection.<\/p>\n

He pointed to some of the world\u2019s major countries like the U.S., where he said the strong labor market is supporting market stability, and Canada, where the market is buoyed by solid fundamentals. The 16-page forecast links to market reports for the U.S., Canada, Germany, Mexico, South Korea and the U.K.<\/p>\n

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READ ALSO:<\/strong> Mark Zandi on the Real Estate Economy in 2020<\/a><\/p>\n

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The U.S. report also addresses the strong labor market and states it is supporting consumer and business spending, which benefits many areas of real estate. The positive momentum in the U.S. commercial real estate market is expected to continue this year, resulting in continued healthy occupancy levels and rent growth across most markets. It notes that within the 47 U.S. major markets tracked by Avison Young, office and industrial sectors saw positive occupancy growth of 200 million square feet. While industrial construction<\/a> remained flat at the end of 2019 at 235 million square, 30 percent of what was being built was preleased. Office construction increased in 2019 with 113 million square feet in development at the year with 45 percent preleased. \u201cMany U.S. markets are reporting preleasing greater than 50 percent of product currently underway, evidence of strong tenant demand for new space,\u201d<\/em> Jennifer Vaux, vice president, research, Northern California, told CPE.<\/em><\/p>\n

Looking ahead, Vaux said Avison Young is forecasting the overall investment volume in the U.S. to be slightly down this year due to concerns over political uncertainties. \u201cHowever, the past few years have seen strong investment numbers across the U.S. so any slowing of pace in investment should not be interpreted as a sign of any looming downturn, just an adjustment in market activity,\u201d<\/em> Vaux said.<\/p>\n

The U.S. forecast notes that despite the uncertainty over the upcoming presidential election and trade disputes, \u201cthe U.S. commercial market should hold its own, with conditions largely continuing to favor landlords.\u201d<\/em><\/p>\n

Talking Trends<\/strong><\/h2>\n

Another top trend for this year addressed by the global 2020 forecast is labeled \u201cPower to the people\u201d and notes that landlords, developers and occupiers need to pay increasing attention to local political activism because \u201ctoday\u2019s street protests increasingly signal tomorrow\u2019s policy initiatives.\u201d<\/em> The report cites growing rent control legislation<\/a> in U.S. markets such as New York City and notes London\u2019s mayor plans to make rent control a cornerstone of his 2020 re-election platform.<\/p>\n

Climate change is another issue that is gaining steam on local levels in the U.S. as well as cities like Paris and Canberra, Australia, where governments are setting 100 percent renewable levels city-wide. Other cities like Boston and Sydney plan to be climate or carbon neutral by 2050. Climate change<\/a> also figures into one of the other top trends, \u201cBuilding resilience,\u201d which notes that cities across the world are responding to climate change to ensure sustainability and it is impact the built environment.<\/p>\n

Avison Young\u2019s other 2020 trends are:<\/p>\n