According to the CBRE, real estate investments will recover in 2021

According to the report, 2021 will be an essential year for the recovery of the real estate market.

Investment in commercial real estate will increase by 30% in 2021, according to CBRE’s 2021 UK Real Estate Market Outlook forecast.

The investment is expected to total £ 37bn in 2020, which should increase to £ 48bn in 2021.

Despite the current challenges of Brexit, CBRE predicted that it would quickly disappear as the most significant source of change and uncertainty for real estate in 2021.

Miles Gibson, UK Research chief executive and editor of the report said: “Deal or no deal, 2021 will find us in a newly established relationship with the European Union, after five years of debate, division, and uncertainty.”

“We will not have left the COVID-19 winter behind, but the form of that exit will be much clearer. Brexit will quickly fade into the background as a concern, as new problems emerge for the UK economy, politics, society, and real estate.”

CBRE added that long-term interest rates are at record lows, and there is an abundance of capital looking for a return, which will help support the recovery of investment in commercial properties.

Investors have stayed low during the pandemic.

Steven Newlands, Chief Executive Officer of CBRE’s investment team, said: “Investors have stayed away from UK property investing recently, partly due to the disruption related to the pandemic and the potential for it to induce changes in the occupant behavior.”

“Travel bans and guidelines on social distancing have also meant that investors have not been able to see some properties.”

“These concerns, as well as restrictions, will ease over time for some asset classes as the occupying market recovers.”

“For now, investors are focusing on the winners of the pandemic: the logistics sector and other sectors with more secure long-term income.”

“By 2021, we expect this to continue as we return to near normal conditions as the vaccine is released.”

CBRE forecast typical property returns of -4.4% for 2020, but 2.6% for 2021, assuming a Brexit deal is made.

For the next five years, CBRE has forecast an average profitability of 4.4% per year with rental growth of 0.3% per year.

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