Top Papers on the Outlook for Global Real Estate
In the last three months we have witnessed a profound shift in the direction of global monetary policy. What impact does this have on the outlook for CRE returns? The fact that central banks believe looser policy is needed should make investors a little wary about the demand side of the equation, but asset allocators might naturally be inclined to believe that lower bond yields justify lower yields on prime property.
Below we list some of the best commentary from the last couple of months, examining the outlook for commercial real estate markets, both globally and regionally. We also include some key papers which discuss the properties of real estate as an asset class and provide insight to the structural changes that are occurring.
Recent legislation was introduced in the U.S. to encourage investment in areas deemed as 'Opportunity Zones' by offering a tax incentive for investors. Aegon looks at the relative attractiveness of investing in apartment complexes located within opportunity zones, as well as the process of identifying and investing in them.
GLOBAL REAL ESTATE OUTLOOK
Both a weaker global growth outlook (largely due to political uncertainty and trade wars) and a recent dovish shift in monetary policy from central banks will affect real estate investors. UBS Asset Management discusses these and other factors influencing the outlook for global real estate.
Given the rising interest in real estate debt allocations, this interview with experts from PGIM Real Estate discusses the risk/return profile of the asset class and how it may perform during the next economic downturn.
Nuveen examines the outlook for real estate markets given the backdrop of lower interest rates.
COUNTRIES AND SECTORS
Aegon discusses the outlook for US CRE investment returns.
For compliance reasons, this paper is only accessible in the EMEA region
This article discusses recent US economic data and its implications for the US commercial real estate market.
UBS Asset Management presents their outlook for UK real estate in the second half of the year. Uncertainty over Brexit may still be deterring investors.
UBS updates their property return forecasts for the eurozone. Despite the weakening outlook for the eurozone economy, return expectations for the property sector have improved, largely due to dovish monetary policy.
Grocery stores face pressure from e-commerce solutions, a shrinking middle class, and advancements in in-store technology. The authors look at the transformation of grocers over the next decade.
The authors believe that the asset class of commercial mortgage-backed securities (CMBS) remains attractive, despite the existence of volatility and uncertainty in the broader market.
SECULAR TRENDS IN REAL ESTATE
MSCI discusses diversification within real estate portfolios. Institutional investors are diversifying their exposures and investing in other property types such as data centers and logistics centers.
This collaborative report contains thoughts on megatrends in real estate. What are the main drivers of the structural changes that are happening, and how will they continue to shape the future of the real estate industry?
PROPERTIES OF REAL ESTATE
This paper provides ideas on the characteristics that can be delivered by real assets and how they can be incorporated into an investment strategy.
This academic paper discusses the properties of commercial real estate (CRE) as an asset class.
Capital expenditures can erode the yields of real estate assets. How can investors account for capex and improve their understanding of the income profile of their portfolios?