Getting to grips with global real estate markets

Getting to grips with global real estate markets

Bouwinvest Research developed the Global Market Monitor (GMM) as a tool to objectively quantify and compare the attrac­tiveness of global real estate markets and economies. The GMM uses a vast array of indicators, building on both historical data series and fore­cast series to measure the attractiveness of a particular real estate market. “What drives the market and are proper data available? By assigning specific weights to each indicator, we rank what we believe are the most attractive office, residential, retail and logistic markets globally. And thanks to numerous refinements over the years, what began as a data collection tool now provides us very valuable market insights at all kind of levels” says Robert Koot, Manager Research at Bouwinvest.

Combining data and investment strategy

The Global Market Monitor covers the most important global office, retail, logistics and residential markets and is updated every three to six months, adopting the latest forecasts. In addition to sector rankings, the model produces quarterly rankings of the most attractive countries, mainly based on economic and demographic developments. But it also provides indicators related to investment criteria such as transparency, corruption, and sustainability. Obviously, the attractiveness of countries and cities  also depends on an investor’s investment strategy. “This is why we have made the monitor an interactive tool, assigning weights to certain indicators or groups of indicators. So we can rank countries and real estate markets in line with investment styles,” Koot says.

Powerful market intelligence

The huge amount of data from different sources enables the Bouwinvest International Investments and Research teams to compare markets on a like-for-like basis, while digging down to real estate fundamentals. To produce forecasts based on both historical performance, current trends and outlook. “Because we group similar, cohesive indicators into the investment themes, we are able to make comparisons and gain insight beyond overall scores and rankings. This makes the monitor a powerful market intelli­gence tool. It feeds the debate on potential investment opportunities,” Koot says

Balanced investment decisions

However, the monitor is just the beginning of the investment process, and the resulting data have to be treated with caution, Koot stresses. The rankings and forecasts are not a road map for future investments, but a very valuable tool to help make well-informed investment decisions. “No data collection system is that good. That’s why it’s so important to work with local players, like Clarion in the US, because they know the local market. The monitor is a wonderful tool and starting guide, but in the end any investment decisions are based on years of experience and expertise and a whole range of factors, including the investment strategy of the investor.”

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