Real estate experts from Cushman & Wakefield expect the world to exceed 60% in partial and full vaccination by end of 2022, which will surely sustain a recovery of the commercial real estate. Since Asia Pacific has been the quickest in formulating a pandemic response, experts see sufficient easement in the supply chains from this part of the globe and fewer bottlenecks in oversea shipments.
Commercial real estate is assumed to yield better than inflation level returns, as over the medium-term inflation expectations are lower and interest rates are also expected to settle in the lower department, which will also dimmish the cost of capital for new projects. It is assumed that every 10 basis points of real GDP growth generate globally demand for close to 500 thousand square meter of office premises (for an estimated global stock of modern offices of close to 500 million sq m). If one looks are the expected 2,5% added growth of Moldova GDP, we may expect a new demand of close to 20 thousand sq m (in this estimation we also assume a certain lag between local demand/economic development and modern economies).
The biggest winner in the post-COVID era looks to be the industrial sector. Governments will combat inflation and rising social costs only by encouraging innovation, R&D and new emerging economic sectors, which mean soaring demand for industrial hubs and office/industrial clusters. It doesn’t mean, tough, that we should expect straight and unconditional normalization: investors should be on the watch for a partial normalization of market activity that will be apparent in the second half of 2022 and will accelerate beyond 2023.
Most developed markets experience a surge in contracts that are being renegotiated and resigned for a lease term of over than 5 years (60% and growing). 10 years and more leases account for close to 30%. It really means that occupiers negotiate and lock in favorable terms for the long-term before office fundamentals recover, i.e. rent, landlord contributions. On the retail side of the business, experts estimate growing savings (although not uniform), which will eventually translate into shopping. Once travel, dining and entertainment sectors spring back to life, one will see recovery across retail markets thereon.