This archive report was first published on 31 October 2019.
As reported by Knight Frank in their October global market overview, the world economy is experiencing a synchronized slowdown after several years of strong growth. The slowdown has raised concerns about a potential technical recession in some countries, although a global recession is unlikely.
According to the report, investors are shifting their focus from prime assets to long-term income opportunities due to the increased risk profile. Global commercial property investment activity has seen a modest easing during the year, with investment volumes falling in nine out of 10 of the world's most significant cities in the first half of the year.
However, cities in the next tier down saw rising investment over the same period. The report also highlighted that there is $330 billion (Sh34 trillion) of unspent capital in the hands of private equity funds targeting real estate, while pension funds are increasing their allocations towards real estate.
Despite the slowdown, Knight Frank noted that large, well-developed real estate markets continue to see strong demand for industrial property, driven primarily by retailers reorganizing their supply chains to serve an e-commerce driven world.
On the other hand, global residential markets are witnessing a general moderation in price growth, with the Knight Frank Prime Global Cities Index increasing by 1.4 per cent in the year to June 2019, up marginally from 1.3 per cent in March 2019 but still significantly lower than its four-year average of 3.8 per cent.
