Enjoying a sustained period of forward momentum, global real estate, hospitality and construction (REHC) executives remain confident about global growth and the opportunities for property acquisitions in the coming months even as some challenges begin to emerge.
Amid rising trade tensions and a levelling-off of the broad global expansion that began two years ago, REHC executives in the latest Global Capital Confidence Barometer have tempered their outlook on deal intentions, with 42% saying they expect to pursue M&A in the coming year. Yet they remain optimistic, as 69% of REHC respondents expect continued improvements in the deal market within their sector over the next 12 months.
While discipline in lending, strong corporate earnings and open capital markets point to a continued upswing in equity markets, the forecast for the overall sector, and M&A activity in particular, may be reshaped by emerging clouds on the horizon, as we approach the end of a long bull cycle and an era of multi-speed markets takes hold.
The continued impact of disruptive forces — from technology to changing customer behavior, to growing competition from non-traditional players such as startups and digitally-based businesses — is a chief concern. One third (32%) of REHC respondents are focusing on these disruptions, working to separate those that can drive competitive edge and opportunity from those that are flash-in-the-pan fads. Technology is a dominant theme as it continues to reshape conventional property uses and definitions, while also transforming the back office and every stage of the real estate process.