| Reasons to be cheerful
With this being the last Property Funds World wwekly newsletter of 2020, we're seeing out what has been a challenging year on a positive note.
First up is news of the latest INREV Quarterly Asset Level Index, which reveals an uptick in the performance of non-listed real estate for Q3 2020, with total returns moving back into positive territory at 1.20 per cent following the negative performance posted in the previous quarter.
And according to real estate advisory company Gerald Eve, there's more to come in the New Year, with the company predicting that 'all-property' returns will hit 6 per cent in 2021 having dipped by -4.5 per cent in the past 12 months, with industrial real estate leading the charge.
“Industrial property has been the saving grace of total returns this year, and this strength will be carried into next year too as the fundamentals continue to underpin investment in the sector," says John Rodgers, head of capital markets at Gerald Eve.
Eighty per cent of UK landlords meanwhile, are positive about the future of property investment, according to The National Landlord Index published by Accommodation.co.uk, but only if the Capital Gains Tax status quo is maintained. A mooted hike in CGT in the New Year would see over half scale back on investment.
The Covid-19 crisis may have hit the real estate sector hard, but global institutions' confidence in commercial property remains high and will continue in the same vein in 2021, says a new report from Hodes Weill & Associates and Cornell University. "Institutions anticipate that a potential buying opportunity is emerging as distress and dislocation become more prevalent," says Douglas Weill, Managing Partner at Hodes Weill & Associates.
That positive outlook is echoed by Colliers International, with the firm predicting that the commercial property market will 'accelerate' more rapidly than expected in the New Year due a rapid recovery in investor confidence following the roll-out of global vaccination programmes.
“Next year will hopefully bring a dose of certainty and the end of an era of unknowns," says Walter Boettcher, Head of Research and Economics at Colliers.
And finally we'd like to take this opportunity to wish all our readers the very best for the festive season. The Property Funds World team is due to resume business as usual on Monday 4 January, but we will continue to update our website with the most important industry news during the holiday period.
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