Nearly Half Of Commercial Property CFOs Expect Revenue To Fall In 2023
GLOBAL – In a newly published survey, about 48 percent of the chief financial officer (CFO) of companies who business involves commercial real estate (CRE) expect revenue to drop next year, reported Connected Real Estate Magazine on Tuesday morning (20 September, SGT).
According to the 2023 Commercial Real Estate Outlook by Deloitte Center for Financial Services, the grim commercial property outlook is because of cost-cutting measures be executives arising from climate regulatory action and economic slowdown.
“Revenue expectations for the full year are mixed among those surveyed, and generally more muted than last year,” stated the report.
“Regardless of which scenario comes to fruition, the outlook survey reveals that concerns about the economy are top of mind for most global real estate leaders as they prepare for the remainder of 2022 and 2023.”
Meanwhile, 12 percent of the polled CFOs expect no change in their revenue from commercial properties, while 40 percent anticipate an improvement compared to 2021. This is a huge drop from the prior survey, when 80 percent of respondents expected revenue would be slightly to significantly better than previous year. But that rosier outlook was based on recovery from a challenging 2020.
Meanwhile, the report revealed that “occupancy levels in top US markets were 44 percent of pre-pandemic levels in July 2022, and owners, investors and local governments are exploring ways to combat vacancies.
“Hybrid work is here to stay, and employees now expect top-of-the-line office space,” it added.
The survey involved 450 CFOs of major CRE owners and investment firms. The respondents were asked to share their opinions on their companies’ growth prospects and future plans for their staff, technology, operations, and culture.
Respondents were equally distributed among North America (US and Canada), Europe (the UK, France, Germany, and Switzerland), and Asia Pacific (Australia, China Mainland, Japan, and Singapore).
The survey included real estate firms with minimum assets under management (AUM) of US$100 million. The survey was finished in June 2022.