Life is coming back to the commercial real estate sector after a “record pricing correction” last year, according to MSCI, as sellers have copped lower valuations on the chin and returned to the market. A raft of recent discount real estate investment trust (Reit) disposals reveals that sellers are now accepting much lower prices – but the recovery in commercial real estate values looks as though it is still a while away.
Figures from real estate agency Savills (SVS) and analytics firm PropertyData show that this January was the worst opening month for investment activity since 2009 and provisional data for this quarter indicates it, too, is likely to be one of the worst since 2009. Some are predicting that the deals from recent weeks have set the market on a path to recovery, however, as the market has quickly shifted into the price discovery phase of the cycle.
