The fall and rise of commercial property
There's bad news and good news this week from Duff and Phelps with new research from the firm predicting a fall of 'up to 10 per cent or more' in commercial real estate asset values as a result of the coronavirus pandemic.
The survey of senior directors and investors in real estate from the US, UK, and Europe, identifies (unsurprisingly) retail and hotels as the sectors to be hardest hit. The good news though, is that all values should recover strongly with 90 per cent of firms expecting asset prices to return to pre-pandemic levels by 2021.
Recovery is also theme of a our second featured story with news of a partnership between Miller Homes and charity Habit for Humanity, which is aiming to help re-build the Lebanese capital Beirut following the devastating explosion in the port area of the city back in August. According to current needs assessments, over 170,000 people in Beirut are in need of support to repair or reconstruct their homes.
"With Covid-19 still prevailing as an active pandemic and the country’s economy in severe distress, vulnerable families are really struggling to pay for essential items, let alone the rebuild of their home," says Tum Kazunga, CEO at Habitat for Humanity Great Britain. "With Miller Homes' help, we will be able to support vulnerable families on the ground and ensure they, once again, have a safe home to live in.”
Next up we have a couple of firsts: news of the first commercial property asset to list on the International Property Securities Exchange (IPSX) Exchange – Mailbox REIT, a single asset company which owns the 'live-work-play' Mailbox building in Birmingham; and the first acquisition by PGIM Real Estate on behalf of its European Core Strategy. The residential property in question, known as “Centre Square”, consists of 123 multifamily rental units, and is situated on a central site in High Wycombe, Buckinghamshire.
Finally we look to the future with a couple of proptech stories: the launch of an AI-powered 'self-operating building' solution from BrainBox AI, which is currently being implemented in 10 buildings comprising over 1,000,000 sq ft of commercial real estate in total; and Evaluate|Locate, a new proptech model from JPES Partners which tracks the economic vitality of more than 2,800 locations across the UK to help investors and developers deal with the ‘location revolution’ that will follow the Covid-19 pandemic.
“Successful property investment and development often pivots on spotting themes, gaps and anomalies which produce opportunity," says JPES Partners Associate Director, Adam Kirby. "Anecdotal evidence about an area is no longer enough, so we believe Evaluate|Locate can help to power a more evidence-led approach."
Property Funds World