Asia

Asia will account for more than half of the global economy by 2040. However, while money and wealth flows into Asia, the population is aging at an alarming rate. In Japan, for example, seniors will account for 20% of the entire population by 2030. Thailand’s seniors will account for 25% of the population by 2040. This has led to high demand of senior living facilities and the emergence of more healthcare REITs in Japan. In fact, according to Property Investor Today, there is great demand for retirement properties with 800,000 beds needed by 2030. Thailand faces another problem in addition to its own aging population: the foreign retiree. Applications for retirement visas doubled from 2013 to 2017, adding more demand to retirement development.

These factors are offering up numerous opportunities for developers to tap into the $123 billion market in Japan and the enormously growing Thai market. Despite this demand, it has been increasingly difficult for foreign investors to enter the markets against some of the stronger and more established Asia Pacific (APAC) developers. However, with more expats continuing to retire abroad, there may become more demand for western developments.

Europe

Cross-border capital into student property markets around the world accounted for 40% of investment into student accommodation over the last three years and that number is expected to rise according to the Global Student Property 2019 by Knight Frank. This sector is desirable around the world, but especially so in the European markets. There are currently over 15 million students studying at 3,300 institutions across continental Europe, which represents a 7.7% increase over the past 3 years. Another key factor in growth has been the rise of international students studying in Europe, which currently stands at 2 million students annually.

European countryside with bridge

With the demand in student housing on the rise, many North American companies, including Nuveen, Brookfield and Lasalle Management, have invested large sums into student housing in Europe. One common motive for student accommodation investment is its perceived countercyclical qualities. During a depression or downturn, the consumption of education increases. Provision rates, which measure specialist student accommodations compared to the overall student populations, also remain very low.

Given the expected increase of international students over the next decade, the demand for student housing is set to significantly increase in the coming years.

South America

After years of political uncertainty and shrinking economies, the outlook of South America is on the rise with projected economic growth through at least 2022. In Brazil, market conditions have created an ideal environment for new investment with interest rates in the country hitting the lowest level ever. Vacancy rates in major cities sit at 20% which is high, but a vast improvement over the recession levels that plagued the country over the past decade. Global companies from China, Korea, Canada and the US have made considerable investments looking for the economic upswing possibilities.

European clock tower, downtown at night

In Argentina, GDP grew by 3% in the second quarter compared to the same period in 2018. This quarter was a tremendous historical period for the office spaces in Bogota, according to Cushman and Wakefield. Class A office markets in the city reached only 7.6% reflecting a high demand for premium office space. With demand and rents at an alltime high, the city currently has nearly 250,000sqm under construction, of which 57% will hit the market in 2019.

However, factors such as the available area for new development and high employment numbers are looming over the market. The government is focusing on these two issues to keep the momentum they have gained over the past years and continue to build upon the investment conditions perception.

Middle East/Africa

Downtown Middle Eastern cityscape

Throughout the vast continent of Africa economies continue to expand and retract quickly. The main players of years past such as South Africa and Nigeria are seeing their equal share of challenges and opportunities. Nigeria, the continent’s biggest economy, continues to grow thanks to free market reforms from the government. Meanwhile, South Africa’s economy continues to slow to its lowest point in a decade due to increased reliance on exports.

Johannesburg in South Africa is seeing a large amount of new mixed-use development with vacancy levels hovering around 10%, double the national average over the past 10 years. Meanwhile in Nigeria, Africa’s most populous nation, a housing deficit of nearly 3 million housing units requires an investment of nearly $360 billion to solve the issue.

middle eastern city on the water

In Dubai, the Middle East’s leader in property development, bad loans are starting to mount up and Emirati banks are beginning to prepare themselves for a property crunch. According to S&P Global, property prices have fallen 31% since their height in 2014, and are on pace to fall another 5%-10% by the end of 2019. Despite the declines, residential supply will continue to grow to 659,000 units at the end of 2021, compared to 536,000 in 2019, according to JLL.

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