Pick of the bunch: W/E 17th May 2024

Highlighting some of our latest opportunities across each of our disciplines, alongside global market insights for real estate professionals, weekly.

Residential Real Estate

This week, significant developments occurred in China's residential real estate market aimed at addressing the ongoing debt crisis in the property sector. On Friday, Beijing introduced measures to bolster the struggling housing market, including reducing the minimum down payment rate for first-time homebuyers to 15% and for second-home purchases to 25%. These reductions are among the lowest ever seen in China, signaling strong government intervention to rejuvenate the market.

The Chinese government also proposed buying commercial real estate to convert into affordable housing, a move intended to mitigate the crisis by utilising idle residential properties and assisting financially troubled housing companies. Vice Premier He Lifeng emphasised the need for local governments to handle commercial housing projects facing delivery difficulties and to purchase excess inventory as affordable housing. The announcement has already had a positive impact on the stock market, with shares of Chinese developers rallying significantly.

In the United States, Lawrence Yun, chief economist and senior vice president of research for the National Association of REALTORS (NAR), has forecasted a positive outlook for the market. He anticipates that interest rates will decrease and home sales will pick up through the remainder of 2024 and into 2025. Yun projects existing home sales to increase to 4.46 million in 2024, up from 4.09 million in 2023, with further growth to over 5 million in 2025. This expected increase is underpinned by strong job growth, which boosts housing demand and home prices.

The U.S. has significantly more people and jobs than it did nearly three decades ago. Yun points out that high mortgage rates and low inventory have constrained sales, but he remains optimistic about the market's potential to improve over the next decade, with most years seeing gains in home sales.

Contact: Emma Lyall, Recruitment Consultant

Contact: Michael Woda, Partner

Contact: Jessica MacLeod, Recruitment Consultant

Property Management

The Saudi Arabian real estate market is expected to witness continued growth driven by significant government investment in infrastructure and key sectors such as tourism and logistics in the next few years. This growth will lead to increased demand for various property types, including office space, industrial facilities, and hospitality accommodations. In the long term, over the next 5+ years, the market will be shaped by economic diversification and technological innovation. As Saudi Arabia moves beyond its oil-dependent economy, the real estate sector will reflect this shift with the increased adoption of technology enhancing property management, transactions, and overall market efficiency.

Contact: Rose Lock, Associate Recruitment Consultant

Contact: Anuradha Deb, Director of Business Support

Business Support

The use of AI and big data analytics will provide property managers with valuable insights into property performance, tenant behavior, and market trends. Office support professionals will need to develop new skills to interpret and utilize this data effectively, which will enable them to contribute more strategically to property management decisions. Automation of routine tasks like rent collection, maintenance requests, and tenant communications will further streamline operations, reducing the administrative burden on office support staff. This will free them up to engage in more meaningful work, such as tenant relations, strategic planning, and improving service delivery.

With the integration of smart building technologies, such as IoT (Internet of Things) devices, property managers will be able to monitor and control building systems remotely. This capability will enhance energy efficiency and reduce operational costs, allowing office support professionals to focus on higher-level tasks rather than routine monitoring and maintenance.

Contact: Peter Wallis, Associate Recruitment Consultant

Contact: Anuradha Deb, Director of Business Support

How did you source your last hire?

?? Recruitment agency (57%)

?? Job board advertisement (36%)

?? LinkedIn / social media (7%)

?? Internal referrals (0%)

Partnering with a specialised recruitment agency like GKR International - Real Estate Talent Specialists offers access to industry-specific expertise and a vast network of candidates. With a deep understanding of industry trends and extensive connections, agencies can efficiently source top talent, saving your team precious time.

Contact our team to secure your next hire within the real estate market!

Commercial Real Estate

The commercial real estate (CRE) market is showing signs of improvement, as indicated by the recent rise in the CRE Sentiment Index, a key forecast of market conditions. Professionals in the industry anticipate better prospects for CRE development over the next 12 months. Despite concerns about rising construction costs, optimism abounds across various components of the index, particularly regarding capital market conditions, including debt and equity availability, as well as first-year cap rates. Additionally, there's a positive outlook for demand, with expectations for slight improvements in occupancy rates and effective rents. However, challenges persist, especially for office properties, which are anticipated to face a tough market. Nonetheless, developers and building owners foresee a modest increase in deal volume and expect favorable local economic conditions in the coming year.

Contact: Anuradha Deb, Director of Business Support

Contact: Michael Woda, Partner

Built Environment

As global temperatures reach record highs, experts advocate for the adoption of nature-based solutions (NbS) to help cities adapt to climate change and enhance human health and well-being. The Nature Conservancy (TNC) is implementing NbS initiatives in Berlin and Stuttgart, tailored to each city's specific needs. These include innovative approaches like green wall systems, retail fa?ade greening, and tiny forests. However, funding remains a challenge, with more investment needed to support these initiatives effectively. NbS, such as planting trees in urban areas, has been shown to have significant benefits, including saving lives and reducing heat-related illnesses. Despite the European Commission's Climate Adaptation Strategy, there is a call to strengthen governance and financing for climate adaptation at both the EU and local levels. Engaging local governments and communities is crucial for the success of such initiatives, with environmental education playing a key role. Ultimately, the focus is on transitioning towards sustainable urban planning, green infrastructure, renewable energy, and fostering international cooperation to build resilience against the impacts of climate change.

Contact: Lee Riley, Senior Director

Investment, Finance & Accountancy

A new investment fund called the Reserved Investor Fund (RIF) is anticipated to become available later this year, pending Royal Assent to the Finance Bill 2024. This onshore UK-based fund structure has garnered widespread industry support due to its transparent tax status and simplicity in operation. Expected to unlock billions of pounds in new capital for UK property, the RIF aims to attract both domestic and international institutional capital for various initiatives, including town center regeneration, social housing development, and achieving net-zero goals.

According to Gallup's Economy and Personal Finance survey, real estate remains the top choice for long-term investment among Americans, despite recent challenges in the market. However, confidence has slightly declined, with 36% choosing real estate compared to 38% last year. Stocks rank second, with 22% of respondents favoring them, reflecting increased confidence in the stock market compared to the previous year. Gold follows closely behind, chosen by 18% of participants, although this is a decrease from 25% in 2023. Overall, while real estate retains its top position, there are shifts in preferences for long-term investment options among Americans.

Contact: Grant Kaveney, Founding Partner

Contact: Emma Smith, Recruitment Consultant

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