These views represent our latest thinking on the key trends which will impact on property markets. They are updated periodically and represent a high-level assessment based on our own research. We offer an array of regular updates and articles that cover in-depth analysis on individual elements of markets

Global macro outlook

The global recovery…

Global GDP is expected to climb 6% in 2021, a figure which could well be revised higher as the year progresses. Sentiment indicators reveal that recoveries in the UK and US are outpacing those elsewhere, most notably the Eurozone and Japan, due to successful vaccine roll-outs and earlier economic reopening.

…will be uneven
The recovery will be uneven, both geographically – due to the variations in vaccination programmes, and by industry. Economic activity has shifted to durable goods and investment, buoyed by record levels of household savings, at the expense of service industries, which are likely to take longer to recover to pre-pandemic levels.

…and supported by loose monetary policy
In most advanced economies monetary policy will remain loose. The Federal Reserve’s latest guidance suggests no immediate withdrawal in quantitative easing. Analysts expect this to begin in 2022 with no rate rises expected before 2023.

Global residential markets

The second phase of the pandemic-induced boom has started

The expected easing of travel restrictions in key markets, such as the UK and US, this summer will be the starting pistol for second home buyers keen to secure the best homes in what is a relatively thin market in many areas. Coastal, rural and alpine retreats were in favour amongst domestic buyers in 2020 but we expect European and US cities to see heightened activity in 2021, as vaccinations and the retreat of the virus make buyers reassess urban opportunities.

The tax and regulation environment will shift radically in 2021

From President Biden’s tax proposals, to new wealth taxes across Latin America, and a new capital gains tax for investors in New Zealand, global housing markets are facing challenges as policymakers look to raise taxation to plug deficits exacerbated by the pandemic. Markets offering flat taxes or lump sum taxation regimes such as ItalySwitzerland and Monaco will look more attractive as a result.

Covid has not led to fundamental change in demand

While some people will want more and better living space, with many embracing a longer commute on fewer days, a lot of this demand is already waning globally. We expect city centre apartments and pied-a-terres to be in demand in the major financial centres as workers return to the city and see the advantage of keeping a foothold near the office.

Global office markets

Re-occupying and reacquainting

The prevailing tone within global office markets is changing. As vaccination programmes extend, the safe re-occupancy of offices becomes a clear focus with companies utilising the office to re-establish connections between staff and with clients. This renewed acquaintance with the office will grow significantly over the summer and usher in the next stage of the great global workplace experiment, as business leaders take stock of how staff reintegration with the office effects output and future space requirements.

Portfolio reconfiguration is not a one-way street

Our recent (Y)OUR SPACE research points to the nature of these future requirements. It shows that, contrary to many recent headlines, those companies announcing sizeable reductions of global footprints are not representative of occupiers. 65% of respondents to our survey anticipate their global portfolios to either stabilise or expand over the next three years. What will be common across the market, however, is a reconfiguration of the workplace itself towards higher quality, amenity rich and collaboration inducing office space.

From introspection to inspection

This reconfiguration will generate market demand. Again, (Y)OUR SPACE notes that four in 10 respondents believe it likely, very likely or definite that they will relocate their HQ facilities within the next three years. When combined with the revival of pre-pandemic requirements and expansionary demand emerging from the tech and life sciences sectors, the portents are encouraging for office demand. Indeed, there has been a discernible uptick in office viewings within major global markets over the last month; something that will accelerate as lockdown measures ease further.

Global capital markets

Global gateways to prove resilient

There is increasing investor demand for large, liquid, transparent destinations to deploy capital in an environment of low bond yields and uncertain equity markets. This follows the predictions in our Active Capital report and in the first quarter of 2021 the US, UK and Germany were the top three destinations for cross-border capital, with the UK being highest according to analysis of RCA data . Capital flows are set to accelerate as economies open up and travel restrictions reduce over the coming months.

Innovation to drive the recovery

The current Covid-inspired economic dislocation is driving innovation. For global capital markets, this means that innovation-led cities, from London to Munich, Tokyo to Stockholm and beyond, could see above average recovery and investor appetite. Sectors such as data centres and life sciences are expected to see increased capital demand. At the same time with an increased government focus on climate change targets and green-led recoveries, sustainability is moving up the investment agenda at a rapid pace.

The recovery will be uneven

Not all real estate will recover at the same rate, leading to a bifurcation in performance and driving the need for careful strategic decision making by investors. Innovation-led locations and sectors including data centres, industrial, life sciences and residential, which benefit from structural changes, local infrastructure investment, innovation and offer sustainable credentials, will likely see an acceleration of demand over the coming year, supported by easier access to financing.

UK macro outlook

The outlook brightens

With the UK opening already underway, the economic rebound in activity has surprised on the upside. Output is now expected to grow almost 7% in 2021 supported by consumers spending some of the record £160bn in excess savings they accrued during lockdowns.

Lower for longer

The Bank of England’s latest guidance indicates that there will be little movement in monetary policy until’ “there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% target sustainably”. As a result expectations are increasingly focussed on it being 2025 before we see a movement in the base rate.

Job market resilience

Government support for employment is increasingly looking to have been a success. Despite the unwinding of the furlough scheme due later this year, the consensus suggests the unemployment rate will peak at 6% in early 2022, far below initial forecasts. The scale of employment support hasn’t come cheap, and the government plan for raising required taxation to cover this spending will likely become clearer as we approach the autumn.

UK residential market

Sales hit new highs...

The number of UK residential sales reached their highest level in more than 15 years in March as the country’s successful Covid vaccination gathered pace. The end of March was also the original deadline for the stamp duty holiday, which meant a number of transactions had been teed up to complete during the month. The holiday will now taper from June through to September, meaning a period of robust activity will continue for several months.

…low supply volumes could reverse

As pent-up demand that built during lockdown continues to be released, supply has struggled to keep pace in some areas. The resulting supply shortage has deterred some owners from listing their property because they are unable to find somewhere suitable to buy, exacerbating the scarcity. New supply was constrained during the third national lockdown in the first two months of this year and as more new properties are listed, a greater balance between supply and demand is slowly beginning to return.


Strong price growth over the past year has raised concerns over market stability. The risk of a price correction however appears low. Recent price rises reflect lower mortgage costs, the build-up of savings to fund deposits, and a recovery after several slow growth years.

While the end of the furlough scheme will have a dampening impact on the market, it is unlikely to put material downwards pressure on prices or activityCombined with the end of the stamp duty holiday, means price growth will moderate towards the end of the year.

UK capital markets

The UK proves its resilience

In the face of geopolitical, economic and health led disruption, in the first quarter of the year, the UK was the number one destination globally for cross-border capital real estate investment, according to analysis of RCA data. The industrial sector saw significant outperformance, with one of the highest quarters for transactional activity on record. We expect domestic and inbound investment activity to continue to lift into the summer as economic and travel restrictions ease, with our capital gravity model predicting the UK as a top two global destination for capital over 2021.

Innovation to drive the recovery

Innovation is proving to be a key driver of real estate demand. In the UK, it is not just the Oxford, Cambridge, London innovation triangle which should benefit from investor interest, with 19 cities across the UK benchmarked as global, innovation-led cities and set for investment outperformance. Sectors related to innovation, such as life sciences and data centres are also expected to see increased demand. We expect investor appetite for sustainable buildings to be spurred further by recent confirmation that the UK is accelerating its climate change targets, and the extension of Bank of England’s remit to help meet the UK’s carbon targets, which is also likely to drive the already growing provision of green finance.

The recovery will be uneven

Not all real estate will recover at the same rate, leading to a bifurcation in performance within the UK and driving the need for careful strategic decision making by investors. Innovation-led cities and sectors including data centres, industrial, life sciences and residential, which benefit from structural changes, local infrastructure investment, innovation and offer sustainable credentials, will likely see an acceleration of demand over the coming year, supported by easier access to financing.

UK retail market

A consumer recovery will only partly aid retailers

We expect a swift and sustained consumer bounce-back now that national lockdowns have been lifted. Retail sales are likely to grow by at least 5% in 2021. But any tangible recovery amongst retail occupiers will be lagging. Three periods of lockdown have deprived retailers of at least eight month’s trading since March 2020.

Rents and rates will add pressure

A key legacy from 2020 is unpaid rent. Many “non-essential” operators ceased paying quarterly rents from March 2020 and considerable arrears have built up since. The moratorium on forfeiture has protected retailers to some degree, but increasingly, the issue of how these arrears are resolved will come to the fore. The staggered end of the business rate holiday from June 2021 will put further cost pressure on retail occupiers and further fall-out, in the shape of CVAs and administrations is highly likely.

Investment demand remains…but is highly selective

There is still investment demand for long-income assets and with this, there is a clear pecking order of interest between the various retail sub-sectors: foodstores, then retail warehousing, then high street stores. Demand for shopping centres, other than for re-purposing plays, remains thin and pricing continues to reflect this. Oversupply is a key structural risk and re-purposing of retail space has become an industry buzzword. Few such projects are financially viable and those that are will probably form part of wider regeneration initiatives, rather than straightforward substitutions.

UK logistics market

Growth…and yet more growth

We foresee continued demand for warehousing suited to servicing B2C distribution. The rapid growth in e-commerce has been a key driver for occupier demand over the past year. Although online penetration rates will decrease as shops and leisure facilities reopen, the internet will play a larger role in the retail market post-pandemic. Occupiers are now looking past the immediate impacts of the pandemic and planning their supply chains, distribution models and warehousing requirements for the longer term. With limited availability of space and constrained land supply, robust levels of rental growth are anticipated, particularly in urban areas and for well-located units offering good levels of specification.

A Brexit dividend?

The UK’s departure from the EU single market has posed challenges for UK manufacturing trade and retail distribution networks. The new rules of origin regulations mean that companies must carefully assess their supply chains to understand the origin of all the parts of their goods and UK manufacturers will have to reduce their dependence on components manufactured outside of the region driving a need for more UK-based manufacturing.

Economic growth provides additional support

Supported by the tax incentive announced in the March Budget and the improving economic outlook business confidence and investment is expected to gain momentum throughout 2021, with firms investing more in their plant and facilities.

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