Schroders Global Real Estate Lens February 2023: your go-to guide to global property markets

Welcome to the first issue of our monthly Global Real Estate Lens (which replaces our monthly Newsflash). In this report, we examine the key data and trends for prevailing economic and capital market conditions, real estate occupier markets and private real estate debt markets.

The tragic conflict in Ukraine unfortunately continues and material inflation (and interest rate rises to control inflation) seen across the globe signals a new era in macroeconomic and monetary policy. Current market conditions and the economic outlook are likely to lead to further pressure on pricing of real assets globally over the coming months with repricing gathering pace in Europe and the US during the end 2022. This momentum is expected to continue through the first part of 2023.

The key highlights in this month’s report include:

• Downgrades to growth and upgrades to inflation forecasts for 2023 as global economic growth loses momentum.
• Core inflation remains high, despite energy and food prices easing, with price pressures likely to continue into the start of 2023.
• Activity in the US real estate market fell by 62% in the fourth quarter of 2022 (compared to Q4, 2021), highlighting the impact of higher interest rates and market uncertainty had on investor sentiment.
• Commercial real estate growth turned negative in 2022, with declines of 13% in Europe and a 16% fall in the US.