CRE investors want to invest in tech-enabled firms in 2019

This year to help CRE companies understand and adapt to the rapidly changing CRE industry, Deloitte’s 2019 Commercial Real Estate Outlook surveyed 500 global CRE investors, across a diverse set of asset sizes and property types, on the factors that will drive their investment decisions in the year ahead.

Here’s a peek at what CRE investors had to say:

• CRE investors want to invest in firms that leverage emerging technologies: More than 80 percent of respondents believe that CRE companies should prioritize the use of predictive analytics and business intelligence. Over the next 18 months, nearly two-fifths of investors plan to increase the use of these technologies to make their investment decisions, and 62 percent prefer having access to IoT data from CRE firms for their investment decisions.
• CRE investors plan to increase capital commitments: In the first half of 2018, global CRE transaction volume increased 13 percent year-over-year to $341 billion. This trend is expected to continue in 2019: 97 percent of investors plan to increase their CRE capital commitments over the next 18 months, with the United States (13 percent), Germany (13 percent) and Canada (12 percent) leading the way. The United States is also the most preferred CRE market globally for inbound capital, followed by Hong Kong and China.
• CRE investors are really interested in nontraditional assets and new business models: CRE investors plan to diversify their portfolios through higher investments in newer and emerging business models and nontraditional assets next year. Over half aim to increase property investments with flexible leases and 44 percent with flexible spaces. Under nontraditional properties, investors are most likely to increase investments in data centers (67 percent) and healthcare facilities (55 percent).