The Top Markets Around the World to See More Commercial Capital Flowing In 2021

Mashvisor released their hottest real estate markets for 2021 a couple of months ago. While it might sound off-putting because of the date, statistics back up their claims. Real estate experts have ranked the 10 best prospects for this year.

These sectors came in second place for real estate prospects. Interestingly, they climbed to the top of the list for this year during the pandemic.

The main attractions include the city’s lifestyle, but it’s also a very affordable housing market. Economically, it ranks third for the healthiest cities.

Austin doesn’t depend on the hospitality and leisure sectors. This advantage has carried it through the pandemic.

The renter population is also quite high. Rental managers can expect solid occupancy rates. Property values also appreciate quickly as a result.

Nashville is another strong housing sector. For the best real estate investment places, it sits comfortably in the top three.

The most important consideration is its attraction to the younger workforce. It's one of the fastest cities to recover financially as a result.

Dallas enjoys a similar standing as Nashville, with the added benefit of high affordability. Employment rates also show promise in the near future.

Most importantly, it enjoys a diverse economy, with several thriving markets for business. For real estate investment, the housing market is a highlight.

Charlotte is another popular destination during the crisis. However, investors should consider the 8% unemployment rate, so the job market will demand attention.

These make up more boom markets, particularly because of plentiful migration during the pandemic. As a bonus, unemployment rates have started to drop since April.

Additionally, their renter population is quite high, more so in Tampa.

This Utah market also makes it to the top 10 investment options for the US. It’s a common destination for people coming from California, particularly during the pandemic.

Its economic health is also quite promising, with the lowest unemployment rate on the list. The renter population is 53% as well.

Washington is a surprising addition to the list. While it's the main city, its influence over the rest of the country has kept it relatively safe during the crisis.

Unemployment has been steady, unfortunately. However, it’s kept its popularity thanks to its suburbs and a high renter population.

Boston is another establishment, similar to Washington. While migration has been noticeable, quick recovery is among its expectations.

We also need to consider its leading industries and education, which keeps its popularity despite how expensive it is.

Finally, Long Island has been going through slow-but-steady growth for several years. Curiously, the increased demand for suburban locations has boosted this growth during the pandemic, coupled with dropping unemployment rates.

Yahoo! Finance has an excellent article about 2021’s expectations for commercial real estate. Many markets within this sector experienced the worst hits during the pandemic. Luckily, others saw increased demand and prices.

The article points out several projections for common concerns within the industry. However, it also sheds light on unexpected upcoming trends you should keep an eye out for.

The most intriguing trend from the article comes as a consequence of the number of retail bankruptcies during 2020. Luckily, chances are people will be desperate to go outside after the pandemic subsides.

Dark stores experience greater demand because of that. These stores basically profit from same-day deliveries and curbside pick-ups. The lack of pedestrian traffic dependence is the main reason behind their advantage.

Most offices remained vacant during the pandemic, and remote work will definitely hurt the need for office real estate.

That said, 2021 looks to be the year when office space hits rock bottom and starts recovering. As vaccination begins, companies will likely start reopening their offices.

Hotels experienced significant losses during the pandemic. Recovery expectations for 2021 oscillate around 50%, but full recovery will likely take until 2023 at least.

Then, we need to consider mortgage payments. Recovery rates will also vary with locations, and some markets might not recover for a while.

Surprisingly, warehouses experienced some of the best numbers for real estate during the pandemic. With logistic companies catching up, this is only expected to remain this year.

For investors with warehouse properties, high rents and occupancy rates might yield excellent returns on their investments.

To move somewhere else, the UK’s CBRE also shared interesting data on the EMEA real estate sector. Of course, it touches on many points touched by the previous article, and they didn’t change too much for the UK.

However, other markets are showing promising numbers.

The second half of 2021 offers the chance for significant recovery, especially given the vaccine’s expected availability. Similarly, interest rates will likely remain low.

Therefore, inflation is expected to stay low, and interest rates for the short-term will likely wait until 2023 to rise. Debt servicing and sustainability still sit comfortably, and property spread will drive real estate demand.

Investment volumes expect over 8% in growth for the year. Interestingly, the second half of 2020 might see the pre-COVID situation returning.

Travel restriction lifts will also drive interest in the investment markets. 2021 will see the continuation of demand for logistics, prime office, and multifamily properties. Hotels might take a while to recover still.

The grocery sector shows promise because of longer leases. The same is true for retail parks due to their convenience and lack of public transport need.

The best European locations will still enjoy demand, but newer investors will look for discounts. Repurposing and repositioning retail properties will become standard practice during the year.

Supply chains will likely experience expansion toward inventory increases and near-shoring numerous tasks. Automation will keep growing as a standard, and CEE regions will be the main winners.

However, land availability might tighten over competition regarding land usage and repurposes. Online retailers will keep expanding, as supermarkets keep investing in online distribution. Cold storage facilities are the winners here.

As government job support tapers, this market will face difficulties during the year. Thankfully, both multifamily and student accommodation investments will remain strong.

Experts might expect subdued rent rates, but competition will regulate prices. Tenant and operational efficiency should be the main focuses.

With remote work becoming standard, data centers will continue growing their demand this year. Existing markets have lower supply and increased costs, so looking for future supplies is vital.

Investment appetite for data center investment spreads across all European markets. Car showrooms and land parcels are prime locations for development.

Finally, the same challenges from the pandemic will continue to direct decisions during 2021. Leisure/entertainment markets will stay down in the near-term.

However, healthcare and self-storage show promising growth possibilities for 2021. They’ve actually performed better, and 2021 will receive them on the right foot.

Finally, Halo Financial released an article on the best cities for 2020-2021 real estate investment. Granted, most numbers suffered during the pandemic, but many of their observations show curious investment options.

Of course, it still touches on the US markets, so we’ll focus on foreign investments.

The US still leads the list of the most secure investment countries. Germany made it to the second spot, but it only amassed 20% of the votes, against the 58% for the US.

The rest of the list is easy to expect. Canada, the UK, and Australia make the other three spots of the top five.

The most promising emerging market is Brazil, even replacing China. China fell to second place, but India actually climbed to fourth place.

The other two emerging markets are Mexico and Colombia. While Mexico lost its second-place position—now tied with India—Colombia is debuting on the list.