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Last year, we were faced with prolonged high inflation, sharp interest rate hikes and a weak economy, with looming fears of recession. However, most countries proved resilient and avoided recession, with the US particularly strong. There were continued challenges from geopolitical tensions and bank failures. Now, as markets can see disinflation and signs of interest rates at their peak, there may be light at the end of the tunnel and a path to improved market conditions in 2024.

If we revisit our 2023 predictions, our outlook was fairly realistic. Our gloomy prediction that global real estate capital values would bottom out in the second half of the year or later has proven prescient. Although we think the bulk of the correction had occurred by the end of 2023, we expect capital values to bottom out in 2024. We also discussed opportunities for investing in Japan due to its continuing low interest rates and resulting hedging gains, which continued through 2023.

We look at 10 key questions for real estate investors and begin by highlighting opportunities and how artificial intelligence can be incorporated into real estate investing. We also analyze the bifurcation in bid-ask spreads across the different property types and assess if the investment opportunities in favored sectors can match the available capital. Next, we look at government incentives for improving the sustainability of commercial real estate and the conversion of offices to residential.

We also discuss the ongoing geopolitical shocks and how investors can position themselves defensively against them. We consider a higher-for-longer interest rate scenario. So, a wide-ranging selection of topics for us to consider for 2024. We hope you find our answers insightful.