What will global real estate do this year? Where will capital flows move to in 2022? What role will big data play? And will economic growth in the US continue to lead the world’s recovery? A recent report from JLL answers these questions to predict major trends in real estate in 2022.
The next destination for capital?
The JLL report underlines the challenges facing any predictions after two rollercoaster years of the pandemic. With this in mind, the company’s analysts forecast which type of global real estate will attract the most capital in 2022.
In 2021, assets “appearing to offer resilience” featured at the top of investors’ priorities. They included sectors such as residential, data centres and logistics. The latter alone accounted for 23% of all global real estate last year, a record high according to JLL.
This year, the company believes that more “traditional sectors” such as office and hotel will see a rebound. “Conviction has been building for lagging sectors in the current recovery and will increasingly benefit the office, retail and hotel sectors in 2022,” said Sean Coghlan, Global Director, Capital Markets Research at JLL.
Adapting workplaces in 2022?
The report forecasts that the changing needs of employees will be a major focus this year as companies cater for hybrid models of working from the office and home. As a result, workplace design will be at the forefront as will the need to provide technology and resources that “advance faster and further”.
In global real estate investment terms, this translates to the need for broader investments in a sector that has been in survival mode for over two years. “The new wave of improvements cannot come quickly enough,” said Marie Puybaraud, global head of research at JLL.
The role of big data in global real estate?
Big data has had an increasingly more prominent presence in investment over the last few years, a situation that is set to continue in 2022. It will remain essential to analyse investments and optimise operations.
Using big data within real estate comes with numerous challenges, mainly as it evolves and leaves systems out of data. JLL believes that to overcome the obstacles companies will turn to “small data” this year and have a “more focused, simplified approach” as a result.
“To think big, you need to organise and govern your small data to harvest insights,” said JLL.
The role of the US?
The US has played a significant part in the economic rebound during the pandemic and investment has seen an impressive uptick. Recovery was also strong in 2021 in European countries such as the UK, Germany and France. JLL expects this to expand further in the EMEA and Asia Pacific during 2022.
The company notes that Asian and Middle Eastern capital has a strong interest in increasing cross-border investment this year. Moreover, the trend will expand quickly during 2022 as travel restrictions lift worldwide.