Commercial Real Estate Brokerage and Management Market

Market Overview

The global commercial real estate brokerage and management market size was valued at USD 2,26,902 million in 2021. It is projected to reach USD 4,24,406 million by 2030, growing at a CAGR of 7.2% during the forecast period (2022-2030). 

Commercial real estate brokerage management consists of properties such as industrial, land, flex, retail space, shopping complexes, and others. Brokerage management provides valuation services, advisory services, lease management, and rental management. Brokerage is connecting a seller and a buyer to complete a transaction. The commercial real estate brokerage and management business are expanding due to the demand for technologies like Big Data analytics, Artificial Intelligence (AI), and the Internet of Things (IoT) in commercial real estate management. The commercial real estate management and brokerage market are mainly driven by urbanization in developing nations.

Market Dynamics

Market Drivers

Rise in Government Initiatives for Real Estate Investments

The need for brokerage management services in the real estate business is driven by increased government efforts to develop commercial infrastructure. Government programs like Make in India, the Affordable Housing Funds (AHF), and others encourage the development of greater commercial projects. The market is expanding due to government spending on real estate infrastructure development. For instance, the Russian government spent over USD 96 billion over six years to construct hotels, business buildings, and retail malls, increasing demand for brokerage management systems for selling, renting, and acquiring real estate. As a result, this element fuels the market for commercial real estate brokerage and management.

Market Restraint

Saturation in Developed Nations

All large cities in developed countries have reached a point of saturation where the growth of the urban area and the economy has either stopped or is growing at a prolonged rate. For instance, the commercial real estate market in the United States saw a decline in sales of commercial properties in significant cities like Washington, DC, due to increased property values and decreased investments by foreign investors. In addition, the emergence of other cities with lower business and living costs is caused by overpopulation, pollution, and poor management of local governing bodies in certain cities. This causes a demand-supply imbalance for commercial properties, limiting the market's expansion.

Market Opportunities

Expansion of Old and Setting New Planned Cities

The overpopulation of major cities has forced governments to either plan for a brand-new metropolis or to enlarge the boundaries of existing ones to balance economic growth across the nation. For instance, the Indian government has announced the creation of new cities comprising commercial, residential, and industrial regions, such as Dream City in Gujarat, Vikram City in Madhya Pradesh, New Town in Kolkata, and New Kanpur City. Similarly, the South Korean government has chosen to build two new cities to balance the expansion of the Gangnam and Gangbuk regions. Migration is encouraged by such expansion and establishment plans for new towns, which increases demand for brokerage management solutions for property buy, rent, and lease management.

Regional Analysis

North America Dominates the Global Market

The global commercial real estate brokerage and management market is divided into four regions: North America, Europe, Asia-Pacific, and LAMEA. 

North America is the most significant revenue contributor and is expected to grow at a CAGR of 6.6% during the forecast period. The commercial real estate brokerage and management market are researched in the US, Canada, and Mexico. In 2020, the US held the lion's market share, while Mexico is anticipated to rise quickly over the coming years. People are increasingly choosing to purchase rather than rent commercial real estate due to the US and Canada's high per capita income levels. In addition, many prefer to invest in homes since they can generate more significant returns in the future due to higher rents in developed and developing areas. These elements fuel the North American commercial real estate brokerage and management sector.

Europe is expected to grow at a CAGR of 6.8% during the forecast period. Due to the expansion of their economies, nations like Germany, France, and the UK have been acknowledged as significant commercial real estate brokerage and management markets. The market's major players are Christie's International Real Estate, Engel and Volkers AG, Savills, and Vinci. In addition, the demand for real estate is growing due to population expansion, historically low borrowing costs, improved job stability, and international tourists in some European nations.

Asia-Pacific is the world's largest real estate management market. The rapid increase in per capita income, the development in urbanization, and the adoption of property management solutions all contribute to the expansion of the commercial real estate brokerage and management business. The infrastructure and manufacturers in emerging countries like Myanmar, Thailand, the Philippines, Vietnam, and others are being improved with a strong commitment. Government support for property management solution initiatives in numerous Asian nations, including Vietnam, Indonesia, India, and others, also contribute to the market's expansion.

Nations like Brazil, Argentina, Chile, and Peru are developing quickly in the region. In addition, Ghana, Uganda, and Nigeria are urbanizing the area. In contrast, other Middle Eastern countries like Kuwait, Egypt, and others have experienced a noticeable rate of urbanization during the past ten years. The urbanization of developing nations in Latin America and Africa has prompted the construction of commercial infrastructure and housing projects. The commercial real estate brokerage and management sector in LAMEA are also anticipated to grow due to government encouragement and tax breaks. Moreover, there is a growing understanding of the advantages of real estate property management, such as asset management, property management, cost reduction, and complexity reduction.

Segmental Analysis

The global commercial real estate brokerage and management market is segmented by solution, type, and application.

Based on the solution, the global commercial real estate brokerage and management market is bifurcated into sales, leasing, and others. 

The sales segment is the highest contributor to the market and is estimated to grow at a CAGR of 6.5% during the forecast period. Property purchases, sales, and rentals comprise sales. This includes selling businesses, offices, hotels, retail centers, and commercial spaces. Additionally, it manages rentals, marketing, promotion, and security. Due to the high costs of commercial properties, residents of affluent cities like Madrid, Seattle, Delhi, Beijing, and Paris want to open shopping centers in urban areas.

A lease is a contract wherein one party consents to rent out real estate owned by another party. It assures the lessor, the property owner, or the landlord and conducts monthly transactions for rent payment for the lessee, also known as the tenant, to utilize an asset. The demand for brokerage management solutions to rent out real estate, commercial offices, and other types of space is driven by an increase in urbanization and industrialization, which is what is causing the market for commercial real estate brokerage and management. Significant players also provide leasing services for property management, including Colliers, CBRE Group Inc., and others. For instance, Colliers offered leasing services for the Golden Oaks Industrial Park project in Greenville, South Carolina, United States. It is a center for emergency medical care.

Based on type, the global commercial real estate brokerage and management market is bifurcated into brokerage and management. 

The brokerage segment owns the highest market and is estimated to grow at a CAGR of 7.0% during the forecast period. The brokerage offers intermediary services in several industries, including lending, investing, and buying real estate. Brokers provide brokerage services. When a seller and a buyer agree to purchase or rent property, a broker acts as an intermediary. Several major companies, including Cushman and Wakefield Inc., CBRE Group Inc., and others, offer brokerage management services to expand their product offerings. For instance, Cushman and Wakefield Inc marketed the property in Hamburg, Germany's "HERRLICHKEIT" office building.

Management focuses on real estate administration in its discussion of property management. Consultation, rollout, integration, support, and upkeep are just some additional services it provides. Asset management, reservation management, and valuation are all covered. The demand for commercial building brokers is anticipated to rise due to rising disposable income and the rapidly expanding urban population, driving the market's expansion. The market is also expanding due to a rise in population movement from rural to urban locations. Additionally, the growing urban population fuels the need for inexpensive homes and business spaces, which in turn fuels the demand for commercial brokers to provide property management services, fueling the expansion of this market.

Based on application, the global commercial real estate brokerage and management market is bifurcated into offices, industrial, retail, multifamily, and others. 

The industrial segment is the highest contributor to the market and is estimated to grow at a CAGR of 6.4% during the forecast period. Industrial cabins and industrial real estate make up industrial spaces. Well-known companies like Colliers, Jones Lang LaSalle IP, Inc., and others provide brokerage management services for industrial regions. For instance, Jones Land LaSalle IP, Inc provided supply chain management services for property management and developing and managing industrial properties. Additionally, it offers logistical and consulting services. Such occurrences fuel this segment's expansion.

Residential apartments with more than five units are classified as multifamily. The apartment complex and apartment building are other names for it. Due to the availability of lending facilities and advice services for efficient property management, owners and developers ventured into multifamily. Due to the extremely high rents for larger homes in these places, studio apartments and small flats sales have increased primarily in big cities like New York, Berlin, and Madrid. People tend to reside in hotels and multifamily flats in major urban areas since the rents are high. The market for multifamily commercial properties is also anticipated to grow throughout the projected period due to increased tourism and city expansion.

Recent Developments

• August 2022- Tata Power, one of India's largest integrated power companies, signed a Memorandum of Understanding (MoU) with JLL India to promote green energy solutions in the realty space. With the real estate sector contributing nearly 40% of all greenhouse gas emissions, it was time to think green and lead the realty sector towards green energy adoption.
• September 2022- CBRE South Asia Pvt. Ltd, India’s leading real estate consulting firm, announced the findings of its latest retail report, ‘CBRE India Retail Figures H1 2022’. The report indicated that the retail sector leasing in India increased by about 166% Y-o-Y crossing 1.5 million sq. ft. As of H1 2022, the total investment-grade mall stock crossed over 77 million sq. ft.