Months after much of Asia emerged from coronavirus lockdowns, commercial real estate dealmaking remains far below pre-pandemic levels, a sign that markets face a long, slow recovery just as hopes rise for vaccines to make offices, hotels and malls safe again.
Even in places that are conquering covid-19, investors are taking it slowly. About $128 billion in commercial real estate traded hands globally in the quarter ending Sept. 30, little changed from the previous three-month period and the lowest level since early 2012, according to Real Capital Analytics Inc.
The value of third-quarter deals sank 27% in Asia, 37% in Europe and 59% in North America from the third quarter of 2019, CBRE Group Inc. reported.
“Overall, we expect the real estate recovery, particularly the office sector, to lag the broader economic recovery by several quarters,” CBRE Group Inc. Global Chief Economist Richard Barkham said in a Nov. 12 note.
Conventional wisdom has been that the pandemic accelerated real estate trends already underway, such as raising values for industrial and logistics properties as e-commerce replaces old-style shopping centers.
When it comes to dealmaking, there’s no sign of a speedup, even in regions where the virus remains at bay.
Lending in the U.S. for commercial and multifamily real estate is forecast to remain below pre-pandemic levels at least through 2022 with this year’s new loans plunging 34% from 2019, according to the Mortgage Bankers Association. Global fundraising sank more than 50% to $21 billion during the third quarter, as investors backed away from committing money,