The financial results of companies in the commercial real estate sector (commercial spaces, business centers, offices, logistics spaces) will be influenced this year mainly by cyber risks, legal requirements for combating climate change, and increasing interest rates in financial markets, according to the Deloitte 2024 Commercial Real Estate Outlook global study.

Companies in Europe are primarily concerned about the same risks, but they rank political instability second (replacing climate-related regulations). Regarding the evolution of market fundamentals, industry players expect worsening in terms of financing costs (50% of companies globally and 57% in Europe) and capital availability (49%, respectively 58%).

On the other hand, 44% of respondents (both globally and in Europe) expect an increase in merger and acquisition activity in the real estate market this year, mainly for diversifying the asset portfolio and incorporating new technology-based competencies.

This latter aspect is important considering that 61% of companies worldwide and 59% in Europe still claim to be partially dependent on outdated systems, but half are in the process of modernizing them. 72% of global study participants (67% in Europe) are in the early stages of implementing pilot systems based on artificial intelligence or developing such solutions.

Regarding preparedness for compliance with ESG (environmental, social, governance) regulations, 59% of participating companies globally (54% in Europe) say they still do not have the data, processes, and internal control systems ready for this purpose.

However, they are considering, for 2024, a series of strategic initiatives to meet sustainability standards, such as investments in Internet of Things (IoT) devices (45%), risk management assessment solutions (44%), and equipping new or rehabilitated buildings with elements resistant to climate change (43%).

"The transformations taking place in the global economy entail considerable financial efforts by real estate companies, in at least two major directions. One of them is related to regulations aimed at meeting sustainability standards, which are evolving rapidly, both globally and in Europe, so the necessary investments for compliance become a priority.

European legislation also targets Romania, and for this reason, we expect players operating in the local market to face additional requirements from national authorities related to compliance with ESG criteria, including within the processes of issuing permits or building authorizations.

The other direction to follow is the one aimed at equipping with state-of-the-art technologies for the development of smart buildings but also for implementing solutions to streamline the operations of companies operating in the real estate sector, such as digital property management solutions and compliance with legal requirements for real estate portfolios (including permits and authorizations)," said Irina Dimitriu, Partner Reff & Asociatii | Deloitte Legal, Leader of Real Estate Consulting Services at Deloitte Romania.

Regarding the most attractive investment opportunities, assets associated with the digital economy take the top spot, surpassing central office spaces (which drop to tenth place in the global ranking), with rental buildings and senior care centers following closely.

The Deloitte 2024 Commercial Real Estate Outlook study was conducted among 750 companies with assets of over $50 million each, from three regions: Europe, North America, and the Asia-Pacific.