Office and retail to re-emerge as more investable propositions in 2022

The sharp divergence between the favored and unfavored sectors of European real estate that has arisen over the past two years out of the COVID-19 pandemic will begin to reverse in 2022, according to the latest Investment Strategy Annual (ISA) published by LaSalle Investment Management.

After identifying in last year’s ISA a “growing chasm” between logistics and residential real estate, on the one hand, and office and retail assets, on the other, LaSalle projects this gap to gradually narrow from this year onwards, with the Omicron variant likely to create a sharp, though brief, period of disruption. This re-convergence will be driven in part by the steady reduction in pandemic-related headwinds for certain retail and office subsectors—with retail warehouses and top-tier high streets the most favorable of the former, and the recovery in offices depending on asset quality and location.

Meanwhile, the sustained inflow of capital into the comparatively small inve