2. 2017 Global Market Outlook
The Outlook for 2017
Moderate economic growth with low interest rates, punctuated with bouts of pessimism
and volatility—the factors that have characterized the world economy for the past few
years—are likely to continue in 2017, supporting moderate growth in commercial rents and
investment sales volume globally.
Economy
Expect 2017 to be a year of volatile markets but steady economic growth. Consumers in the
U.S., EU and many parts of Asia Pacific are spending gains from rising incomes, low interest
rates and low oil prices, which should support GDP growth.
Rents
In 2017, global prime rents across the three major property types—office, industrial and
retail—are expected to grow 2.2% on an annual basis, according to estimates from CBRE’s
Global Rent Index.
3. Capital Markets
Global commercial real estate investment markets are expected to remain active in 2017, but
the pace of growth is anticipated to slow after six years of recovery and price appreciation.
Office
Most U.S. and European office markets are expected to tighten further in 2017 as demand
for space is expected to outpace limited new development. However, Asia Pacific office
markets will be more mixed.
Retail
Retailers and mall operators are adopting new “placemaking” strategies to compete with e-
commerce, which combined with stronger consumers, should stimulate more demand for
retail space globally.
Industrial
Robust demand from e-commerce and third-party logistics companies for warehouse and
distribution space—including for smaller in-fill locations within major metros—will continue
to reshape the industrial market.
4. Real Estate contribution to World GDP
1. Housing’s combined contribution to GDP generally averages 15-18%, and
occurs in two basic ways:
2. Residential investment (averaging roughly 3-5% of GDP), which includes
construction of new single-family and multifamily structures, residential
remodelling, production of manufactured homes, and brokers’ fees.
3. Consumption spending on housing services (averaging roughly 12-13% of
GDP), which includes gross rents and utilities paid by renters, as well as
owners' imputed rents and utility payments.
5. 5 big real-estate trends to watch in 2017
1. Attack of the drones
2. Not ‘mixed-use’ but ‘surban’
3. Forget the starter home, millennials want the move-up property
4. How Trump’s shocking win could change real estate
5. Start thinking about Generation Z
7. Top 2 Global Companies
1. CBRE GROUP , which has an estimated revenue of 10.5 billion US dollars.
This conglomerate acquired Global Work Space Solutions for 1.5 billion
us dollars which resulted in the addition of another 1.2 billion square
feet in property under management.
2. JLL , with an estimated revenue of US$ 6 billion, this company stands 2nd
in the list. They are recording remarkable growth rates and the company
boasts of the fastest current cash-flow development rate far above,
putting its closest rivals to shame. Their very recent strategies of taking
over companies like SAG, JLL will boost the company’s stand in the Hotel
and Hospitality management sector as well.
