Knowledge Hub

The “Project of the Century” will provide enormous opportunities in the built environment over the coming decades

Over the last two generations, we have seen a familiar trend of rising wealth and influence in Asia. It started with the Japanese in the 70s and was followed by the Koreans in 90s and the South East Asian “Tigers” in the early 2000s. For the past decade, China and India have been among the powerhouses of world economic growth. Given their ambitions and scale, they are both likely to be important contributors for a very long time.

The Belt and Road Initiative (BRI) is one of clearest manifestations of China’s vision and influence. The infrastructure and investment underpinning the BRI will streamline trade flows and lift economic activity in much of Asia, the Middle East, and North and Eastern Africa. While the vision will bring huge opportunities for investors and developers, the BRI will also change the face of corporate China, which will have an enormous influence in the 21st century as Chinese brands become household names around the world.

This report aims to bring some clarity to the initiative, with Knight Frank’s research teams developing a Belt and Road Index to rank 67 countries according to a number of key criteria, along with local analysis from a significant number of BRI markets. Our analysis shows that opportunities are widespread, with improving bilateral relations between BRI countries and China providing potential for real estate investment, development and business expansion. No doubt the BRI will provide further impetus to corporate China’s growth and influence in global markets.

With this report, we are taking crucial steps in being able to provide the highest level of advice around tangible opportunities along the BRI. We hope you find the report useful and insightful.

PRIVATE REAL ESTATE CONTINUES TO DELIVER FOR INVESTORS

Investors surveyed in June for the Preqin Investor Outlook: Alternative Assets, H2 2017 reported high levels of satisfaction with private real estate returns. The majority (95%) of respondents reported that the performance of their private real estate portfolios had met or exceeded their expectations over the past 12 months, and 91% felt that they had met or succeeded over the past three years. It is clear that investors have a generally favourable view of the asset class, with 44% reporting a positive perception of real estate, compared with just 14% that have a negative perception.

Take a look through the sixth edition of The Occupier Edge, authored by Cushman & Wakefield’s very own future thinking experts. In this everchanging environment, you must stay on your toes – that’s exactly what we are doing. At Cushman & Wakefield, we put our clients and our people at the center of what’s next.

In addition to blockchain and co-working, this edition of The Occupier Edge also touches upon how PropTech is disrupting the real estate industry, the multi-faceted approach of placemaking, and why GenZ is the future. We also feature how robotics are being used to improve user experience and efficiency of facilities.

Global real estate performed exceptionally well in 2017, with volumes up sharply and values ahead. Yields compressed 12 basis points on average, while prime rents rose +1.7% and investment volumes jumped +13.2% in USD terms, ahead of even our own above consensus forecast.

While the momentum this seemed to be feeding into 2018 has been shaken by heightened fears of a trade war as well as renewed stock market volatility thanks to inflation risks, the existing balance of pricing, supply, and demand point to a further healthy year. Indeed, while stock is hard to find we are forecasting a small gain in global volumes thanks to more development, an increase in profit taking, and a release of stock via corporate activity.