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THINK 2017: Five things you should know

THINK 2017

In our latest research report, we highlight the five areas of focus for future real estate investment: big picture trends, cities to watch, leading sub-sectors, technology trends and sustainability.

1 - Big picture: The report examines broad trends that will impact global investment and outlines expectations for another year of transformation, with political disruption and globalisation continuing to take centre stage.

2 - Cities to watch:  Five cities which 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.

Alice Breheny, Global Head of Research, comments: “The impact of PropTech innovations may not have as significant an impact at property level, but they will certainly reshape large segments of an industry that, until now, has not witnessed the large-scale disruption that most other major sectors of the economy have had to learn to live with.”

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 minimising 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.”

THINK 2017 report 

View our THINK 2017 report 

 

Issued by Henderson Real Estate Asset Management Limited, 201 Bishopsgate, EC2M 3BN. Authorised and regulated by the Financial Conduct Authority. TH Real Estate is a name under which Henderson Real Estate Asset Management Limited provides investment products and services. Past performance is not a guide to future returns. The value of investments and any income will fluctuate (this may be partly be the result of exchange rate fluctuation) and investors may not get back the full amount invested. Where opinions have been expressed, they are based on current market conditions and are subject to change without notice. This document is intended solely for the use of professionals and is not for general public distribution. Any assumptions made or opinions expressed are as of the dates specified or if none at the document date and may change as subsequent conditions vary. In particular, the document has been prepared by reference to current tax and legal considerations that may alter in the future. The document may contain "forward-looking" information or estimates that are not purely historical in nature. Such information may include, among other things, illustrative projections and forecasts. There is no guarantee that any projections or forecasts made will come to pass. International investing involves risks, including risks related to foreign currency, limited liquidity particularly where the underlying asset comprises real estate, less government regulation in some jurisdictions, and the possibility of substantial volatility due to adverse political, economic or other developments. Past performance is no guarantee of future performance. The value of investments and the income from them may go down as well as up and are not guaranteed. Rates of exchange may cause the value of investments to go up or down. Any favourable tax treatment is subject to government legislation and as such may not be maintained. The valuation of property is generally a matter of valuer’s opinion rather than fact. The amount raised when a property is sold may be less than the valuation. Nothing in this document is intended or should be construed as advice. The document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment. TH Real Estate is a name under which Henderson Real Estate Asset Management Limited provides investment products and services. Issued by Henderson Real Estate Asset Management Limited (reg. no. 2137726), (incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London EC2M 3BN) which is authorised and regulated by the Financial Conduct Authority to provide investment products and services. Telephone calls may be recorded and monitored.

Alice Breheny

Alice Breheny

Global Head of Research

Alice's biography