Knowledge Hub

• Savills Tech Cities are important centres for tech in their region and venture capital (VC) investment hotspots. Vibrant cities in which to live and work, they are magnets for talent.
• Wellness matters more than ever to both tech talent and business occupiers. Our Tech Lifestyle Cities have an edge here, with better air quality, access to greenspace and smaller footprints. Savills Digital Nomad Essentials Index highlights some of the factors that count to talent today.
• In spite of 2020’s upheavals, the Tech Megacities continue to dominate VC investment, led by Beijing and San Francisco. Singapore has received a boost, benefiting in part from the US-China trade war.
• A new raft of Rising Global Tech Contender cities are emerging, ranging from Detroit to Yokohama. Growth is fuelled by technological advances, government initiatives and cost advantages.
• While many tech companies have adopted work from home strategies in the wake of the pandemic, their city centre offices and campuses, in which they have invested heavily, will remain important as places for staff to collaborate, to instil company culture, and to attract the best and brightest.
• Out of town tech campuses have taken on a fresh relevance in a time of social distancing and newfound focus on health and wellbeing. We explore five examples with wellness at their core

Investors seeking yield will turn further toward real estate assets, while funds promising higher returns will be pushed up the risk curve

Lower for longer. Almost the entire way through the post-Global Financial Crisis economic cycle, interest rate calls have been revised downwards, or expectations of higher interest rates pushed well into the future. With COVID-19, that future looks even further away, if – a big if, given the liquidity pumped into the system – inflation is kept in check.

What does this mean for real estate? Preqin’s Future of Alternatives forecast is that private real estate assets under management (AUM) will grow from $1.05tn in 2020 to $1.24tn in 2025 (Fig. 1). While lower than our CAGR forecast of 9.8% for all alternative AUM, the real estate AUM growth of 3.4% per year should be viewed in the context of a market hit by what will likely be a period of demand uncertainty for its two largest asset classes: retail and offices.

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Based on our forecast model and insight from over 100 fund managers and 100 investors, we provide a detailed forecast of what the alternatives industry could look like in 2025. We analyze what the next five years hold for each asset class and region, explore changes underway in the investor universe, and identify the megatrends driving change in the industry.

We expect AUM growth in alternative assets to average 9.8% per year to 2025. Persistently low interest rates will attract investors of all types drawn to the promise of outperformance, diversification, and lower correlation with public markets. Among our key predictions, private equity will top $9tn in assets by 2025, and Asia's AUM will grow at a world-beating CAGR of 25.2%. Our forecast is supported by our Future of Alternatives 2025 survey, in which 81% of investors said they expect to increase allocations to alternatives in the next five years.

Read the report for AUM forecasts, data-driven analysis, insights, and predictions. Some of them may surprise you...

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Many occupiers are looking to reduce the total amount of office space they occupy, due to the preference for some employees to continue working from home following lockdown. This change in occupier preference, combined with the large amount of new supply, has resulted in occupiers looking to...