TH Real Estate has issued its latest research report “THINK 2017: Five things you should know” which highlights five areas of focus for future real estate investment: big picture trends, cities to watch, leading sub-sectors, technology trends and sustainability.
Among key specific trends cited by the research: rise of green bonds, impact of Brexit, driverless cars and smart cities.
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1 – Big picture: Geo-political risk, burden of debt in countries and monetary policy are among the broad trends that will impact global investment and outline expectations for another year of transformation, with political disruption and globalization continuing to take center stage.
2 – Cities to watch: Washington DC, Hongkong, San Francisco, Berlin and London are expected to undergo significant changes in the coming year are identified, as are specific factors that will impact them – for better or worse. Identifying and analysing cities poised for long-term growth is becoming more critical as this approach is overtaking country-level investing. Every city is impacted by unique, long-term trends that impact risk, diversification, pricing, volatility and returns.
3 –Leading sub-sectors: Data storage, outlet malls, co-working space and other niche, or ‘structural,’ sectors are considered, as interest in real estate alternatives continues to gain momentum in institutional investor portfolios. These sectors can offer performance, attractive yield profiles and liquidity and align investors with the megatrends shaping TH Real Estate’s Tomorrow’s World investment philosophy.
4 – Technology: Technology impacts all real estate sectors, but the retail, logistics and office sectors are likely to see the greatest change as driverless cars, online shopping and open source data platforms become mainstream. Furthermore, the PropTech movement is creating efficiencies across the critical services that are used by the real estate industry, whether from the transaction, asset management or property management perspective.
5 – Sustainability: Lastly, sustainability remains a critical consideration for real estate investment and is poised to play a broader role in years to come. A focus on sustainable factors can distinguish growth opportunities, while minimizing the risk of obsolescence within a portfolio. The report highlights the focus on science-based carbon reduction targets and the increased emphasis on the health and well-being of individuals who interact with properties.
Abigail Dean, Global Head of Sustainability, said: “Monitoring these sustainability trends in 2017 and beyond is crucial to help us anticipate and respond to changes in the investment market, to mitigate risk, and to protect and create long-term value. We also anticipate impacts on occupier demand, legislative and fiscal regimes, client expectations and energy supply.”
Source: TH Real Estate
