Commercial Real Estate - Caribbean

The Commercial Real Estate market market in the Caribbean is expected to reach a projected value of US$390.80bn by 2024.
This market segment is anticipated to experience an annual growth rate (CAGR 2024-2029) of 1.20%, leading to a market volume of US$414.90bn by 2029.
In comparison to other countries globally, the United States is projected to generate the highest value in the Real Estate sector, with an estimated value of US$25.3tn in 2024.
The commercial real estate market in the Caribbean is experiencing a surge in demand due to increased tourism and foreign investment.

Definition:

Commercial real estate can be defined as properties that are used for business purposes, such as office buildings, retail spaces, warehouses, and industrial properties.

Additional information:

The commercial real estate market contains the value of commercial properties as a key performance indicator. This is the worth of all office buildings, retail spaces warehouses, and industrial properties for the timeline of our data coverage.

Office buildings
Retail spaces
Warehouses
Industrial properties

Residential real estate
Publicly owned buildings used by the local government
Buildings used for public health care services

The Commercial Real Estate market in the Caribbean is experiencing significant development and growth due to several factors. Customer preferences in the Caribbean are shifting towards more modern and efficient commercial spaces. Businesses are increasingly looking for office spaces that provide state-of-the-art technology infrastructure, flexible layouts, and amenities that enhance employee well-being. Additionally, there is a growing demand for retail spaces that cater to the region's booming tourism industry, with a focus on luxury brands and experiential shopping. Trends in the market show an increase in foreign investment in the Caribbean's commercial real estate sector. International companies are recognizing the region's potential for growth and are investing in office buildings, hotels, and retail spaces. This influx of foreign capital is driving the development of new commercial projects and contributing to the overall growth of the market. Local special circumstances, such as the Caribbean's natural beauty and tourism industry, are also influencing the development of the commercial real estate market. The region's stunning beaches, tropical climate, and vibrant culture make it an attractive destination for tourists and businesses alike. As a result, there is a high demand for commercial spaces in prime locations that offer breathtaking views and easy access to tourist attractions. Underlying macroeconomic factors, such as stable economic growth and favorable government policies, are further fueling the development of the commercial real estate market in the Caribbean. Many countries in the region have implemented investor-friendly policies and incentives to attract foreign investment. Additionally, the Caribbean's strong economic performance, driven by sectors such as tourism, finance, and offshore banking, is creating a favorable business environment for commercial real estate development. In conclusion, the Commercial Real Estate market in the Caribbean is experiencing significant growth and development due to customer preferences for modern and efficient spaces, an increase in foreign investment, local special circumstances such as the region's natural beauty and tourism industry, and underlying macroeconomic factors such as stable economic growth and favorable government policies. These factors are driving the construction of new commercial projects and contributing to the overall expansion of the market in the Caribbean.

Data coverage:

Figures are based on value of commercial real estate.

Modeling approach / Market size:

Market sizes are determined by a bottom-up approach. As a basis for evaluating this market, we use national statistical offices. Next, we use relevant key market indicators and data from country-specific associations such as share of industry, manufacturing, and services of the GPD, price level index, GDP. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the market, for example, exponential trend smoothing.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

After a challenging period during the coronavirus pandemic, the European commercial real estate sector now faces additional pressures, including inflation, record-high interest rates, and sluggish economic growth. In 2022, these challenges were evident through contracting investment volumes in the two largest markets—the United Kingdom and Germany. Although the shifting economic landscape has impacted all commercial real estate subsectors, industrial and logistics—a property type that demonstrated incredible resilience during the pandemic—continues to be the most popular investment class. The performance of the sector is closely tied to the state of the economy, explaining why cities with flourishing capital markets garner the most interest from investors. In 2023, investors identified London, Paris, and Madrid as the three most attractive markets.

Growing demand for industrial and logistic real estate is prominent in Europe, driven by the increase in online retail sales rather than in-store. All the Nordic countries saw steady growth in their e-commerce sales during the past fifteen years and more, and the growth is expected to continue. Investments in the industrial and logistic real estate industry have generally been at a higher level during the last few years. The highest investment value among European countries in the first half of 2021 was in the United Kingdom, while Sweden topped the list among the Nordic countries, and was fifth in terms of industrial and logistics investment in real estate in Europe that year.