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The article aims to analyze the behavior of commercial real estate prices in Europe, with a focus on the post-coronavirus disease 2019 (COVID-19) pandemic period. The authors use national and city-level data for the various commercial real estate sectors in ten countries, as well as listed real estate data, to assess any differences across property type and space.

The authors analyze the behavior of commercial real estate prices after the COVID-19 pandemic, emphasizing differences across property types. For that purpose, the authors use national and city-level direct real estate data for the ten largest countries in terms of market capitalization, as well as listed real estate data. The article then turns to discussing the likely trajectory of commercial real estate prices in the future.

The recent rise in interest rates and geopolitical instability have affected prices differently across sectors. Industrial properties benefited from the pandemic, although prices declined significantly in 2022. Residential properties continued their upward price trend and have been the best-performing property type during the last two decades. Retail real estate continued its downward price trajectory. Thus far, office markets do not appear to be significantly affected by structural changes in the sector. The data for listed real estate markets in Europe suggest that markets bottomed out in early 2023.

This paper provides for a better understanding of the behavior of commercial real estate prices in Europe since the COVID-19 pandemic. The authors assess whether the effects found during the COVID-19 crisis were temporary or long-lasting. Also, many economic and political uncertainties have emerged since the beginning of the Ukraine war in February 2022, and it is important to analyze the effects of such uncertainties on commercial real estate prices.

The aim of this Real Estate Insight is to comment upon commercial real estate research. Much of the current research on commercial real estate sits in academic silos, constrained by disciplinary boundaries and rejecting insights from other areas. This can lead to an impoverished understanding of the processes and practices that drive market behaviour.

This Real Estate Insight, through the lens of history, draws on insights from a century earlier and, in particular, from the work of Frank Ramsey; the paper argues that market behaviour is shaped by the role of key actors and persistent beliefs which need to be accounted for in our models of market practice.

The paper argues that current research paradigms need to accommodate agency explicitly into existing models and that real estate research will benefit immensely if researcher were more open in seeking ideas from outside the real estate field and to be more open to external ideas and concepts.

The paper suggests that property research needs to be more embracing of other academic disciplines to develop a full understanding of the numerous and various drivers within commercial real estate markets.

This is a review of how beliefs impact upon commercial real estate markets. As with many things, history can help researchers today get a broader and more appropriate perspective on market drivers and how they affect decision-making.

Commercial real estate (CRE) indicators typically include asset deals and exclude share deals. This study aims to explore the phenomenon of real estate share deals and assess whether omitting these transactions results in indicators that do not accurately reflect the market.

Various registers in the Netherlands were used to estimate transaction volumes, total values and price developments of both share and asset deals. Share deals are company transfers and its transactions cover more than real estate. To estimate the contribution of real estate in share deals, valuations were used.

In the Netherlands, share deals are most prominent for rental dwellings. Adding share deals to volume and value indicators seems required. In price development estimates, significant differences were found for dwellings between share and asset deals. Price indices should, therefore, also include share deals, but in practice this is difficult and has little impact on the outcomes due to the low weight of share deals.

Legislation has a major impact on choosing a share or asset deal. The significance of share deals is expected to vary amongst countries. Performing similar research in other countries will contribute in harmonising real estate indicators.

Statistical agencies face many challenges in the construction of CRE indicators. This study provides statisticians knowledge that can be used to evaluate possible data gaps.

This is the first study to estimate indicators of real estate share deals and compare these to asset deal indicators.

COVID-19 has had a significant global impact at many levels, including an impact on global real estate capital flows. This paper examines the impact of COVID-19 on global real estate capital flows over 2019–2022 to clearly articulate the extent of this impact on global real estate capital flows across regions, countries, major cities, real estate sub-sectors and by major real estate investors. Drivers of these global real estate capital flow changes are also identified. The strategic real estate investment implications of this impact are highlighted, as well as the implications going forward concerning the global real estate strategies for the real estate portfolios held by institutional investors.

To assess the impact of COVID-19, the Real Capital Analytics (RCA) database of global real estate transactions over 2019–2022 is used to drill-out critical details on commercial real estate transactions to explore specific trends in global real estate capital flows in this period of the COVID-19 crisis. This includes real estate capital flows to specific regions, countries, cities, real estate sub-sectors as well as the role of major real estate investors.

The impact of COVID-19 is clearly shown with the major decline in global real estate capital flows in 2020, with a strong recovery in 2021. Reduced levels of real estate capital flows in 2022 reflect different risk dynamics, where 2022 has seen investors move on from the COVID-19 environment. In 2022, the risk of COVID-19 for real estate has been replaced by global real estate risk factors such as inflation concerns, geopolitical tensions, economic growth concerns, increased cost of debt issues and supply chain issues. This sees COVID-19 now rated as only the 6th most important risk factor in real estate investment decision-making for real estate investors in the Americas, Europe, Middle East and Africa (EMEA) and Asia–Pacific.

This research has clearly shown the extent of the impact of COVID-19 on global real estate capital flows, as well as identifying the drivers of these real estate capital flow changes. It highlights that real estate investors have moved on and are now prioritising new risk factors ahead of COVID-19 risk. These critical risk factors reflect more recent financial, economic and geopolitical issues, which are key issues in real estate investment decision-making going forward. Investors need to structure these new risk factors into their real estate investment decision-making for the ongoing management of their domestic and international real estate portfolios.

This paper is the first published empirical research analysis of global real estate capital flows during the COVID-19 crisis. This research provides major insights on real estate investment decision-making during this crisis and the strategic changes seen in acquiring real estate portfolios in response to this major global crisis. The change in real estate risk priorities in 2022 as real estate investors move on from the COVID-19 environment is also identified and is clearly reflected in the 2022 global real estate capital flows.

Opportunity real estate funds are an important style of real estate investing for institutional investors seeking nonlisted real estate exposure. Importantly, institutional investors have sought exposure to the China real estate market, often via opportunity real estate funds. This has been by a pure China opportunity real estate fund (100% China opportunity real estate) or by a pan-Asia opportunity real estate fund where China opportunity real estate was part of this pan-Asia opportunity real estate portfolio. Using two bespoke China opportunity real estate indices developed by the authors, this paper aims to assess the risk-adjusted performance and portfolio diversification benefits of China opportunity real estate in a mixed-asset portfolio over 2008–2020. It also highlights critical issues for institutional investors going forward to factor into their real estate investment decision-making for effective China real estate exposure.

This paper develops two bespoke China opportunity real estate fund performance indices to assess the risk-adjusted performance and portfolio diversification benefits of China opportunity real estate funds in a mixed-asset portfolio over 2008–2020. An asset allocation diagram is used to assess the role of China opportunity real estate in a mixed-asset portfolio via both the non-listed and listed real estate investment channels.

Over 2008–2020, China opportunity real estate exposure via pan-Asia opportunity real estate funds were seen to outperform pure China opportunity real estate funds. In both formats, China opportunity real estate funds were seen to have a significant role in a China mixed-asset portfolio across most of the portfolio risk spectrum; particularly compared to listed real estate exposure in China. On-going issues regarding real estate risk management in China will take on increased importance for institutional investors seeking China real estate exposure.

Opportunity real estate funds are an important style of real estate investing, often used by institutional investors to gain non-listed real estate exposure in a developing real estate market. This style of real estate investing has been popular with institutional investors seeking exposure to China real estate as part of the China economic growth dynamic. The results of this research highlight the importance of opportunity real estate investing in China, both via a pure China opportunity real estate fund and via a pan-Asia opportunity real estate fund. Based on this empirical analysis, China opportunity real estate exposure is seen to be more effective via a pan-Asia opportunity real estate fund than a 100% China opportunity real estate fund. A range of practical China real estate investment issues are also highlighted for the effective delivery of China real estate exposure for institutional investors going forward; this particularly relates to the on-going risk management for real estate investment in China.

This paper is the first empirical research analysis of the risk-adjusted performance of China opportunity real estate and its role in a mixed-asset portfolio. Using bespoke China opportunity real estate fund indices developed by the authors, this research enables empirically-validated, more informed and practical opportunity real estate investment decision-making regarding the strategic role of China opportunity real estate in an institutional investor's portfolio. It also highlights the importance of various facets of real estate risk management in China going forward.

This study examines whether green buildings enjoy more favorable financing terms compared to their non-green counterparts, exploring the presence of a green discount in commercial real estate lending. Despite the extensive research on green premiums on the equity side, lending has received limited attention in the existing literature, even as regulations have increased and ambitious net-zero targets have been set in the banking sector.

In this study, the authors leverage a unique dataset comprising European commercial loan data spanning from 2018 to 2023, with a total loan value exceeding €30 billion. Hedonic regression analysis is used to isolate a potential green discount. Specifically, the authors rely on property assessments conducted by lenders to investigate whether green properties exhibit lower interest rate spreads and higher loan-to-value (LTV) ratios.

The findings reveal the existence of a green discount in European commercial real estate lending, with green buildings enjoying a 5.35% lower contracted loan spread and a 3.92% lower target spread compared to their non-green counterparts. However, this analysis does not indicate any distinct advantage in terms of LTV ratios for green buildings.

This research contributes to a deeper understanding of the interaction between green properties and commercial real estate lending, offering valuable insights for both lenders and investors.

This study, to the best of the authors’ knowledge, represents the first of its kind in a European context and provides empirical evidence for the presence of a green discount.

Commercial property development builds floor space in anticipation of potential, but unknown, future demand, making it particularly prone to risk and uncertainty. The research explores the degree to which property developer decision-making is objective and rational and the degree to which it relies on behavioural instincts and intuition. Decision-making theory, including heuristics, is considered and its prevalence in the field of commercial property development is examined.

A “dual-processing” decision-making model, comprising intuitive System 1 and objective System 2 processing, is proposed and tested. Inductive research using template analysis of interviews, with “high status” commercial property developers, explored whether the model offers an accurate representation of developers' behaviour and effective lens through which to examine decisions made under conditions of risk and uncertainty.

Participants believed they adopted objective and rational approaches to complex commercial property development decisions. Analysis of interviews reveals that System 1 heuristics and intuition play significant roles in decision-making behaviour, leading to potential bias and systematic error. The research concludes that the dual-processing model provides a useful lens through which to better understand the decision-making approach adopted by commercial property developers.

The research represents the rare application of behavioural theory to the realm of commercial property development and provides new and original insight as to how important investment decisions are made under conditions of risk and uncertainty, with implications for professional practice.

This paper aims to provide a comprehensive analysis of the transformative impact of Artificial Intelligence (AI) and Large Language Models (LLMs), such as GPT-4, on the real estate industry. It explores how these technologies are reshaping various aspects of the sector, from market analysis and valuation to customer interactions and evaluates the balance between technological efficiency and the preservation of human elements in business.

The study is based on an analysis of the strengths and weaknesses of AI as a technology in applications for real estate. It uses this framework to assess the potential of this technology in different use cases. This is supplemented by an emerging literature on the topic, practical insights and industry expert opinions to provide a balanced perspective on the subject.

The paper reveals that AI and LLMs offer significant benefits in real estate, including enhanced data-driven decision-making, predictive analytics and operational efficiency. However, it also uncovers critical challenges, such as potential biases in AI algorithms and the risk of depersonalising customer interactions.

The paper advocates for a balanced approach to adopting AI, emphasising the importance of understanding its strengths and limitations while ensuring ethical usage in the diverse and complex landscape of real estate.

This work stands out for its balanced examination of both the advantages and limitations of AI in real estate. It introduces the novel concept of the “jagged technological frontier” in real estate, providing a unique framework for understanding the interplay between AI and human expertise in the industry.

Foreign direct investment in the real estate (FDIRE) sector is required to bridge the gap between investment needed and domestic funds. Further, foreign direct investment is gaining importance because other sources of raising finance such as External Commercial Borrowing and foreign currency convertible bonds have been banned in the Indian real estate sector. Therefore, the objective of the study is to explore the determinants attracting foreign direct investment in real estate and to assess the impact of those variables on foreign direct investments in real estate.

Johansen cointegration test, vector error correction model along with variance decomposition and impulse response function are employed to understand the nexus of the relationship between various macroeconomic variables and foreign direct investment in real estate.

The results indicate that infrastructure, GDP and tourism act as drivers of foreign direct investment in real estate. However, interest rates act as a barrier.

This article aimed at exploring factors attracting FDIRE along with estimating the impact of identified variables on FDI in real estate. Unlike other studies, this study considers FDI in real estate instead of foreign real estate investments.

The delay in real estate projects in India is pervasive. Organization and management (O&M) and project management (PM)-related challenges are argued to contribute to project delays. This study examined the O&M and PM factors that cause delays, the level of implementation of various O&M and PM aspects in real estate projects and how the challenges can be alleviated.

Perception surveys among the consumers and relevant stakeholders engaged in real estate projects in the Bhubaneswar and Cuttack regions of India were conducted to collect data on the factors of delay and implementation of the O&M and PM aspects. Relevant statistical methods and structural equation modeling (SEM) were used for data analysis.

Findings suggest that from the O&M point of view, poor decision-making, mishandling of finance, concurrent execution of many projects, diversion and misuse of finance for unrelated activities, lack of PM personnel and poor management contribute to the delay. Further, although the project initiation is satisfactorily done, most of the PM principles are not largely used, thus leading to delay.

The study does have limitations, including its reliance on a perception survey of consumers and stakeholders, a limited sample size and a restricted number of projects. Nevertheless, the study highlights the need to address poor O&M and the insufficient application of PM principles to combat project delays in the Indian real estate sector.

Proper O&M and adequate application of PM will enable professional management of the projects and avoid delay.

Proper O&M and the application of adequate PM would reduce delays in real estate projects. Consequently, conflicts between the companies and consumers might be reduced and housing and infrastructure demands might be met.

The study manifested that the lack of adequate implementation of O&M and PM aspects leads to delays. So, it is theorized that O&M and PM play critical roles in the success of real estate projects. Appropriate implementation of the principles and best practices linked to these aspects might alleviate the challenges of delay in real estate projects in India.