GLOBAL real estate investment fell by 33 percent in the first half as the coronavirus pandemic battered economies and disrupted deals. The Asia-Pacific region took the biggest hit, with volumes down 45 percent from the year-earlier period, because it was the first struck by the outbreak, according to a report from broker Savills Plc. Investment dropped by 36 percent in the Americas and 19 percent in Europe, the Middle East and Africa. With the tourism industry shut down for months by government lockdowns, hotels saw investment decline by 59 percent in the first half of the year, followed by a 41 percent drop for retail properties, according to the Savills report. Industrial and residential properties fared better. Investment is “expected to remain well below pre-pandemic levels for the rest of 2020 as investors wait for market clarity,” Simon Hope, Savills head of global capital markets, said in a statement yesterday. “However, certain sectors are expected to outperform as investors focus on secure assets, namely logistics, residential and life sciences.” The International Monetary Fund has forecast that global gross domestic product will shrink 4.9 percent this year as the pandemic wears on. IMF chief economist Gita Gopinath has said the cumulative loss for the world economy this year and next as a result of the recession is expected to reach US$12.5 trillion. Still, the investment decline was less severe than at the start of the last financial crisis in the first half of 2008, when investment cratered by 49 percent and kept falling until the middle of 2009, said Sophie Chick, director of Savills World Research team. (SD-Agencies) |