Cautious optimism
We surveyed more than 150 real estate businesses, to get their views on the state of the sector. By doing this we have been able to identify the challenges businesses are facing now, as well as the risks and opportunities that will shape the coming years.
Our results reveal that, though there are ongoing concerns around a potential recession, as well as economic volatility acting as a potential barrier to investment – we are seeing growing optimism and confidence within the sector. After a difficult few years, there is light at the end of the tunnel – with our respondents indicating they are optimistic about the real estate markets progress over the next 12 months, this sentiment rises when looking further ahead.
Stacy Eden
Head of Real Estate and Construction, RSM
of respondents are optimistic about the real estate markets prospects over the next 12 months
This rises to 80% when taking a longer-term view of three years
The sector at a glance
Funding and forecasts
Economic volatility and access to funding are key concerns and are cited as being top barriers to investment, though respondents are less troubled than last year.
Sustainability
ESG credentials are no longer a nice to have but are increasingly becoming a prerequisite to accessing finance. Businesses that focus on enhancing theirs, despite changes to governmental targets, will be in a much stronger position than those who hesitate.
Assets and regions
The living sectors remain attractive investment opportunities, boosted by demographic shifts and healthy fundamentals. Meanwhile there is ongoing concern around office and retail spaces outside of the ‘safe haven’ of London.
AI and technology
Early adopters of generative AI predict significant returns, as the technology shows potential across all areas of the sector, though initially most prominently in financial and management information and price modelling.