2023-09-11 13:41:53
Colliers has already set a date for the comeback in real estate investment. After a turbulent 2023, marked by the economic slowdown and increases in interest rates, investment activity will be reactivated starting next summer.
According to the forecasts of the consultancy’s Business Intelligence team, the most critical moment will occur at the start of 2024, although the situation will improve as the year progresses and the ECB stops raising interest rates.
The document states that “theoretical asset prices should bottom out in the first half of 2024” and that “the worst of the market will be behind us after the first quarter of next year, as intervention rates are expected to peak in this period. This will provide more certainty to the markets, and the possibility of medium-term rate cuts will open up a good investment opportunity. which, with all certainty, many players are going to take advantage of. Some owners, forced by debt maturities and liquidity needs, will assume the new scenario and will bring price positions closer to investors, thus reactivating activity investor”.
The consultant also states that “The nominal values of real estate assets will not recover until after 2026“, so the next two years will be a good time for many investors thanks to the fact that they do not expect significant compressions in yields at least until 2026. Then, according to their calculations, “the ‘prime yield’ will compress to 4.2 % (-70 basis points from their highs)“.
As Alberto Díaz, Managing Director of Capital Markets at Colliers, explains, “investors who know how to take advantage of market opportunities in the first half of 2024, They will be able to obtain better returns thanks to the compression of yields that will occur in the medium term and the income of income that will grow during this period.” Thus, the consulting firm insists, “the option of delaying decisions to sell core investments may be reasonable in nominal investment terms, but it will have a negative impact on the IRR objectives and multiples of investors in the coming years.”
Within the investment community, Colliers believes that those who will have the most opportunities are private investors and family offices, as they are less subject to debt structures and will therefore maintain their advantageous position compared to institutional investors.
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