Worries Over the New Omicron COVID-19 Variant, Real Estate Mergers and Acquisitions on the Rise

The emergence of the worrying new Omicron COVID-19 variant had triggered a sell-off across global markets. Though the severity of the new variant has yet to be fully determined, governments around the world are playing it safe by taking immediate measures to limit the variant's spread. With this potentially new dangerous variant, companies may have to think twice about their return-to-office plans. Workers have been resistant to returning to the office, citing reasons such as childcare issues, mental health concerns, and danger of commuting.

Read also: An Analysis of COVID-19's Impact on Office Real Estate Demand

While the world keeps a close watch on the developments of the Omicron variant, mergers and acquisitions in the real estate sector are on the rise, as a mix of pent up demand, renewed confidence, and frustration in finding direct investment opportunities at scale are combining to spur activity. Increased M&A activity in the real estate world is mirrored by a rise in deal-making across all industries, with volumes already close to their all-time US$4.8 trillion high, having so far surpassed $4.3 trillion this year.

Read also: Implications of COVID-19 Aftermath on Real Estate Sectors

What caught our eyes this month?

Will the Threat of the Omicron Variant Cause Companies to Change Their Return to Office Plans and Allow Everyone to Work Remotely?

Forbes – The World Health Organization reported that a new potentially dangerous coronavirus variant—Omicron— started to spread in southern Africa and some other countries. The uncertainty over the new variant may cause companies to think twice about their return-to-the-office plans.

Why Real Estate M&A is on the Rise

JLL – A string of deals in recent months is a sharp contrast to the lull experienced early in the COVID-19 pandemic when caution ruled among real estate investors. Among recent deals, the world’s third-largest listed real estate investment manager is being created with US$129 billion of assets under management, as Hong Kong-headquartered ESR Cayman buys real estate fund manager ARA Asset Management.

Higher Interest Rates ‘Could Weigh on UK Housing Market’

The Guradian – Nationwide Building Society has said there could be a “cooling” of the UK’s red-hot housing market, after house prices hit a new record high in October. While the Bank of England this month decided to keep interest rates at a historic low of 0.1%, it could raise borrowing costs as early as December, against a backdrop of falling unemployment and higher inflation.

Melbourne Housing Market Insights: November 2021

The Urban Developer – Melbourne housing market saw new home listings soared by 82 per cent last month as vendors rushed back into the market after lockdowns ended. The city's house prices have increased by 19.5 per cent in the past year, with the median price now $953,000, following a peak-to-trough fall in values of -5.6 per cent between April and September 2020.

Read also: Investing in Australian Residential Real Estate

Why Logistics Firms are Piling into Bigger Warehouses

JLL – Since the global pandemic sent supply chains into a tailspin, delivery delays have affected everything from toilet paper to bicycle parts. Wary of continued disruption, logistics and manufacturing businesses are hunting for larger warehouses. Globally, business demand for larger warehouses is expected to be significantly higher over the next three years.

Vantage Point is a curated cache of the latest trends in real estate investing repurposed from media outlets and websites around the globe. Each article is a succinct wrap-up of key news points for an easy read. Outbound links, embedded in each editorial, are attributed to original external sources. RealVantage makes no warranties or representations regarding the accuracy, completeness or veracity of the information or data contained in such external sources. Editorials under the Vantage Point vertical do not reflect the views of RealVantage, in part, or in its entirety.

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