On the back of improving sentiment, global real estate investment is projected by Savills World Research to rise by 7% to US$747b (R14t) in 2024, with further growth to US$952b (R17t) forecast for 2025, says Andrew Dewey, MD of Swindon Property, which is Savills’ commercial associate in sub-Sarahan Africa.
Says Dewey: “According to Savills, this recovery is anticipated to gather momentum in 2025, and by 2026, global activity is expected to surpass the US$1t (R18t) mark for the first time since 2022. Central banks across major economies have begun to cut policy rates, fears of a global recession have largely been quelled and occupational markets remain resilient. The fundamentals of real estate continue to attract institutional investors, who have increased their market share to the highest level since 2021.” Savills reports that much of this initial growth is supported by a recovery in Europe. With all major central banks in the region having started rate-cutting cycles in the summer, commercial real estate is looking a lot more attractive. Says Dewey: “A key trend noted by Savills is that commercial real estate is advancing, with more intelligent buildings that enhance working environments and drive net-zero initiatives. Furthermore, tenant experience and satisfaction have become increasingly important in the fight for talent and the drive to encourage employees back to the office. “In addition, the prevalence of hybrid working has heightened this need as office attendance has shifted towards ‘peak days’, a trend which requires smart management of spaces and facilities. In Europe, office attendance is highest on Tuesdays – reaching 68% occupancy – and lowest on Fridays, at 43%, according to Savills’ figures, with a similar pattern observed in the US. While no such data is available for South Africa, we have seen that the ‘return to office’ drive has helped cut vacancy levels in the office secto