According to real estate consultancy Knight Frank, the total volume of real estate investments worldwide fell significantly in the first half of 2020 – however, some particularly safe locations are exceptions: In Germany, for example, the investment volume has even risen sharply compared to the previous year.
The international real estate consultancy Knight Frank publishes the “Active Personal-Financial.com Report” every year. This year’s report deals in particular with opportunities for recovery in the market for real estate investment, which was hit hard by the Corona crisis in a wide variety of sectors.
Active Personal-Financial.com Report: Almost a quarter less capital flowed worldwide in the first half of 2020
Knight Frank reports that in the first half of this year, due to the corona pandemic, a total of 23 percent less capital flowed into the international investment market than in the same period of the previous year 2019. Asscompact reports further data from real estate consultancy that deviates slightly – according to this data, the whole should global transaction volume in the first half of 2020 was 320 billion US dollars.
The real estate industry is doing much better than other areas of the economy – after all, real estate is particularly popular in times of crisis. Felix von Saucken, head of the living area at real estate service provider Colliers International, even explains to ARD: “The greater the unrest in the population, the greater […] demand.”
Germany only slightly affected by international uncertainties – commercial real estate is popular
According to the report, the international market has become significantly more uncertain compared to the previous year, but according to the Knight Frank data available from Asscompact, German commercial real estate is still considered safe and stable: Germany is one of the few countries in which the investment volume has not only not decreased, but even increased be.
In the first half of 2019, capital inflows into the German commercial real estate market amounted to 13.1 billion US dollars – in the first half of 2020, however, inflows totaling 16.6 billion US dollars were recorded (this corresponds to an increase of 27 percent).
Germany is the cross-sector market leader in Europe and in second and third place globally
With inflows worth 32.3 billion US dollars, Germany was the second most popular destination for international real estate investors after the USA.
According to Asscompact, Knight Frank also ranked second among the leading investment markets in the second quarter of 2020 in the asset classes of senior and care properties, in industry and retail as well as in the residential property sector. The German class of office properties was able to achieve third place in the global ranking.
In all of the sectors mentioned, the inflow of capital has increased by percentage points in the smaller and larger double-digit range and Germany is the market leader across all sectors.
USA, Canada and Germany are key players in 2021
Asscompact quotes Ole Sauer, Managing Partner at Knight Frank in Berlin, with the following words: “Germany has so far handled the crisis extremely well […]. Quickly acting and resolutely implemented measures such as short-time working allowance and rent moratorium show the efficiency with which the German government has countered a severe economic downturn. “
In contrast to locations such as Paris or London, the German sub-markets are not very liquid, but they always recover from crises particularly quickly: probably one of the reasons that Knight Frank will have the USA, Canada and Germany in 2021 (in that order ) as both the top three sources of capital and goals.
According to the real estate consultancy, Singapore and locations where a lot of oil is extracted could also become attractive.
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