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NEWSLETTER | 15 Oct 2020  

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

Real estate assets to fall by up to 10 per cent or more in value, but will bounce back by 2021, says Duff & Phelps
Wed | 14 Oct 2020, 11:38
Duff & Phelps, a provider of governance, risk and transparency solutions, has published a survey revealing that nearly four in 10 investors (39 per cent) expect commercial real estate assets to fall between 5-10 per cent in value in 2020, whilst nearly a third (31 per cent) predict a fall of 10 per cent or more as a result of the pandemic.
Habitat for Humanity partners with Miller Homes to help rebuild Beirut
Mon | 12 Oct 2020, 16:43
In response to the devastating explosion in the Port of Birut in August, Miller Homes has partnered with Habitat for Humanity Great Britain to help rebuild the Lebanese capital.
Mailbox REIT to become first commercial property asset to list on IPSX exchange
Wed | 14 Oct 2020, 11:08
Mailbox REIT is to become the first commercial property asset, owned by a single company, to list on the International Property Securities Exchange (IPSX) in London. 
PGIM Real Estate makes first UK acquisition for European core strategy
Fri | 9 Oct 2020, 09:57
PGIM Real Estate has made its first acquisition in the UK on behalf of the investors in its European core strategy. 
BrainBox AI launches AI building technology in the UK & Ireland
Wed | 14 Oct 2020, 11:21
BrainBox AI, a specialist in autonomous building technology, has launched an AI-powered solution in the UK and Irish commercial real estate markets.
New proptech model targets pandemic ‘location revolution’
Wed | 14 Oct 2020, 09:59
A new proptech model which tracks the economic vitality of more than 2,800 locations across the UK aims to help investors and developers deal with the ‘location revolution’ that will follow the Covid-19 pandemic.

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