OV E RV I E W
The growing role of data in real estate investment By A. Paris
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ike most other economic sectors, property investment had to re-invent itself in view of the Covid-19 pandemic. As some parts of the market, like hotels and retail businesses, were hit hard, others like data centres and large warehouses flourished. As the outlook is becoming more positive given the global vaccine rollout, investment managers should re-assess the resources and support they need to succeed in this environment. “Momentum in global office markets remains subdued, with Q1 leasing volumes down 31 percent on Q1 2020. However, there are now tentative signs of an improving outlook with leasing activity in some countries including China back above pre-pandemic levels. Retail and hospitality, the two sectors most directly impacted by social restrictions, are continuing to face challenges. The logistics sector, the standout performer throughout the pandemic, maintained its robust growth in Q1,” says Jones Lang LaSalle in its Global Real Estate Perspective for May 2021. Despite the difficulties the industry faced as a whole, real estate opportunities remain attractive. BlackRock outlines the market “offers investors the chance to invest in attractively priced properties that aim to provide 4 | www.propertyfundsworld.com
a regular income with the potential for capital growth.” The asset manager notes real estate can provide a stable income potential for capital growth. These assets also offer a pattern of returns which differs from those of traditional equities and fixed income. In addition, BlackRock explains there are dislocation opportunities due to Covid-19, “where under-pressure financial markets have not reflected the quality of a number of properties in their price. We believe volatile financial markets and an uneven economic recovery have created an opportunity to buy attractive properties at prices that do not reflect their true value.” In support of this belief, BlackRock is starting to invest more in sectors facing a more volatile future, such as bricks-and-mortar retail and hotels. These sectors, as also highlighted by Jones Lang LaSalle, can deliver significant returns as economies slowly start to emerge from restrictive measures. Data alone is not enough Although the outlook for the real estate sector is a lot more positive than it was a year ago, there is no denying things have changed. THE FUTURE OF PROPERTY IN FOCUS | May 2021
