Green shoots emerging as real estate eyes recovery

It’s #Week31 at Paperclip and despite typically British skies, summer holiday season is here. For many this offers a chance to relax and reflect on the state of the market, perhaps from the comfort of a (hopefully dry) sun lounger.

There’s no doubt that a holiday is needed after a challenging time at the coalface. Across the UK and Europe, transaction volumes have been very subdued, as economic concerns and general uncertainty have weighed heavily on the market. The results being reported by JLL and the other big agencies indicate just how tough things have been for those reliant on transactional-based revenue.

Agents are a good barometer of the health of the industry as a whole, and while most are still warning of some pain to come, there is a notable tone of cautious optimism in what they are saying. Barry Goshin of Newmark speaks for many when he sees activity teetering on “the cusp of a new market”. And it is not just talk: firms such as CBRE are working on major merger and acquisition deals, as sure a sign as any that the jostling for market position is gaining pace.

Paths are emerging to improved business, with many spotting the early signs of a capital markets thaw that will catalyse recovery. Predictions are that the UK will narrowly avoid recession over the rest of 2023 and see a modest recovery in 2024 as falling inflation helps to restore spending power. This optimism extends beyond the UK: the European commercial market has repriced at unprecedented speed, and growing demand means that things are looking up.

These are all good signs for the sector, and indicative of the proverbial ‘green shoots’ of recovery. Real estate has always been cyclical; with any luck, the industry is turning a crucial corner.