For real estate investors, geopolitical shifts continue to make the outlook volatile. A new report form Invesco Real Estate says real estate investors need to look at three key factors to determine how these trends could impact property investments across the globe, and to identify areas of greatest relative value and opportunity for value creation.
The key factors are the potential impacts on structural growth trends and the implications for sector-level real estate income growth; economic growth in different countries, and implications for market-level real estate net operating income (NOI) growth; and the potential for real estate cap rate compression to drive value growth.
“Achieving higher real estate returns than local market averages will require enhanced asset-level income growth and secular demand drivers that can help offset potentially slower economic growth,” said Mike Bessell, managing director, European investment strategist at Invesco Real Estate.
