Pricing resets across commercial real estate markets globally will usher in a shift in investor strategy, according to analysts from Colliers, who say capital values could correct by up to 30%.
"The full outcome for the market could take up to 24 months to fully materialize, but the next six months will be driven by a re-calibration of pricing," said Damian Harrington, Head of Global Capital Markets Research, Global and EMEA at Colliers. "The scale of the reset will differ markedly across locations due to the speed and extent to which interest rates are changing, in combination with variant local real estate fundamentals and pricing dynamics."
Colliers analysts say that on average, yields will move out by 75 basis points, or a 15% reduction in capital values. But the scale of change could range from 0 to 30%, they say, and timing will vary from market to market.
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