Cross-border real estate investment set to hit record levels in 2022

Real estate’s long-delayed “roaring twenties” is set to finally arrive in 2022, according to research, with record levels of cross-border property investment predicted. Researchers at Knight Frank have said next year will see a resurgence in capital flows into the sector, with office assets are on course to lead the charge. More than half of international investment volumes in 2022 are predicted to be into offices, driven by investors looking for secure rental income. Residential is forecast to be the second most invested sector, followed by logistics. Neil Brookes, head of global capital markets at the agency, said: “The results from this year’s report are a welcome sign of the continuing recovery in the global capital markets and a resurgence of global cross-border investment into real estate. “Indeed, as the world moves into the next phase of living with the pandemic, we could see a ‘roaring twenties’ effect for real estate in 2022.” The “green building” effect Researchers said that having a top green rating could improve a building’s value by as much as one-tenth. The report found that central London office buildings with a BREEAM Excellent rating enjoy a 10.5% premium on sales price compared with equivalent unrated buildings, while those with a BREEAM Very Good rating can expect a 10.1% premium. Meanwhile, the green premium was even more pronounced in Australia. Prime office buildings in Melbourne and Sydney with a NABERS2 rating of 5+ enjoy a 17.9% premium on sales price compared with equivalent unrated buildings, while those with a lower NABERS rating enjoy an 8.3% uplift. Victoria Ormond, capital markets research partner at Knight Frank, added: “We are rapidly seeing sustainability and ESG drive institutional real estate investment strategies. “For the first time, we have also been able to identify the price premium on the highest-rated green buildings across hemispheres. This is a strong signal that demand for green buildings is an international phenomenon and one that is likely to grow in significance.” See also: KF’s Stephen Clifton on why 2022 should see a rebound in real estate investment   To send feedback, e-mail alex.daniel@eg.co.uk or tweet @alexmdaniel or @EGPropertyNews