Rents and capital values rise in global real estate – Americas industrial leads – The Property Chronicle
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Rents and capital values rise in global real estate – Americas industrial leads Retail rents are easing as the sector reinvents itself

The Economist

2018 has registered a very healthy start with strong global GDP growth and historically low G7 unemployment rate. The global economy is poised to record the fastest growth (3.1%) in seven years, driven by the turbo charged U.S. economy and continued strength in emerging Asia.

Occupier demand is robust due to rising consumer confidence and tightening job market, while Commercial Real Estate (CRE) investment maintains its momentum as the cost of capital stays low.

Capital value growth continues to outpace rental values in all regions and sectors. Global rent and capital value indices recorded growth in Q1 2018 across all property types except for retail rent, which dropped 0.75% quarter-over-quarter.

In due course, we think rising interest rates will curb the rate of capital value growth, but for the time being global conditions are very favourable to real estate.

The office sector took the crown in EMEA and APAC for rent and capital value growth. EMEA’s office capital value has outgrown other regions for three consecutive years with an annualized quarterly growth rate of 10.6%. Rental growth was on the upside as well due to strong employment and leasing volume growth.

The Economist

About Richard Barkham

Richard Barkham

Richard is a specialist in macro and real estate economics. He joined CBRE in 2014 as Executive Director and Global Chief Economist. Prior to taking up his position with CBRE Richard was a Director of Research for the Grosvenor Group an international business with circa $10bn of capital under management in real estate. He was also a non-Executive Director of Grosvenor Fund Management where he was involved in fund strategy, risk analysis and capital raising. Richard is the author of two books and numerous academic and industry papers. In 2012 he published Real Estate and Globalisation (Wiley Blackwell, Oxford), which explains the impact on real estate markets of the rise of emerging markets such as China and Brazil. He has extensive consulting experience and is a Visiting Professor in the Department of Construction and Project Management at the Bartlett School, University College London. He holds a PhD in economics from the University of Reading where he taught, in the Departments of Economics and Land Management, between the years of 1987 and 1998.​​​

Articles by Richard Barkham

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