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Law firms should target deals in the commercial office, private rented, hotels and logistics sectors to ensure they stay at the forefront of the global real estate market, new data from The Lawyer reveals.
The findings are included in the new Global 200 Real Estate report, which features insight from more than 30 of the world’s leading real estate practices including DLA Piper, Dentons, Fried Frank, Jones Day and Clifford Chance.
Over 100-plus pages, the report reveals the largest real estate practices by headcount globally and in the key regions of the the US and UK, Europe and Asia Pacific. It highlights these firms’ current busiest areas of activity and also flags up which sectors and jurisdictions they believe will be the most active over the coming years.
The new report includes the results of a survey of the world’s largest real estate practices, which asked for details of the sectors in which these lawyers were currently seeing most activity. 40 per cent said the hotels and leisure sector while a similar number said student accommodation.
The survey also asked firms where they anticipated seeing most activity over the next three-to-five years.
Responses stating “student accommodation” fell markedly, to just 16 per cent, while the largest number of respondents (36 per cent) said commercial office. Residential (excluding the private rented sector and student accommodation) was the second top scorer with 32 per cent while hotels and leisure, logistics and multi-family (which includes the private rented sector) also all stood out at (24 per cent).
The survey findings are backed by insights direct from the firms, which not only provided opinions on real estate market trends but also on the impact of geopolitical events such as European elections, the Trump presidency, capital controls in China and Brexit.
Asked what changes to activity levels it anticipated seeing over the next three-to-five years, Addleshaw Goddard said: “Student/senior living/PRS [private rented sector] will all drive the residential/housing sector. The release of strategic land and convergence of transport/infrastructure releasing land for logistics and related industrial development.”
Addleshaws’ comments were echoed by those from Allen & Overy, which said: “Logistics is a key asset class of interest at the moment and we expect activity to increase across all jurisdictions. This is also true for alternatives such as student accommodation and increasingly health care with a weight of international capital looking to access these sectors given their resilience to general economic uncertainty. The private rented sector is a major focus in the UK and we predict 2017 will be the year PRS and the build to rent sector finally come of age. Clients who previously were looking at build to sell are refocusing on build to rent. The measures announced in the Housing White paper can only help to stimulate this sector.”
The area that most firms agreed would see a marked decline in investment over the next few years is retail. Just 4 per cent of respondents said they believed they would see most activity in this sector by 2020.
You can also watch our video The Lawyer’s Global 200 Real Estate report – Everything you need to know clicking here
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