Market Insight: The Commercial Real Estate Market In Turmoil

Executive Summary

The commercial real estate market is being rocked by the current macroeconomic climate. Since the beginning of 2022, the MSCI World Real Estate Index has plummeted by 28%, and some properties have experienced valuation reductions of 50% as low office occupancy remains prevalent in an age of hybrid working.

It is not yet clear when the pain will stop: default rates are set to continue to rise, alongside central bank interest rates, while tenants continue to demand more from their workspaces to fulfil their net zero commitments. City planners, for their part, desperate to increase footfall, are expediting office transformations to other building use cases.

Smart building technology providers need to position their offerings to meet the key buyer demands of cost reductions through energy optimization, easy demonstration of decarbonization and ESG target compliance, and the creation of healthier workspaces to attract and retain talent. Vendors should look to this report to understand how they can capitalize in this real estate investment cycle, and best meet the needs of property owners and managers.