Assessing the Slowdown

Across all eight countries, returns have been squeezed by the pandemic with falls in total return being mostly driven by lower capital growth but also by lower income returns.

Global Investment Returns

Source: MSCI
Source: MSCI

As we move into 2021, the impact the COVID-19 pandemic has had on real estate is becoming increasingly clear with investment returns decreasing across the globe. In this chart, we compare returns for the first nine months of 2020 to the same period one year prior to illustrate the magnitude of the slowdown. Across all eight countries, returns have been squeezed by the pandemic with falls in total return being mostly driven by lower capital growth but also by lower income returns. Beyond the headline measures, the impact of the pandemic has varied considerably as some property types have been more affected by lockdowns and social distancing, and some cities have had to implement tighter restrictions. As we move beyond the initial impact of COVID-19 in 2020 and look to how the world may emerge from the pandemic, 2021 could be a significant year for real estate markets, with changes that could reshape real estate investment.

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