In dramatic fashion, the pandemic took the shine off traditional real estate sectors, such as hospitality, retail and, to a lesser extent, office. At the same time, it accelerated already-existing investor interest in logistics and data centers, which are expected to outperform in the medium to long term. Looking ahead, will any other traditional or niche real estate sectors be able to provide equally appealing risk-adjusted returns?
The answer seems to be a qualified “yes.” While investors may currently be enamored with data centers, that doesn’t mean they should lose focus on other sectors.
“Structurally speaking, tech adoption that favors online retail, outlet malls and ecommerce — alongside demographic tailwinds driving multifamily, student housing, co-living, senior living, life sciences and self-storage — is expected to match up to risk-adjusted returns provided by logistics and data centers,” says Harry Tan, head of real estate research, Asia Pacif
