Savills IM prefers long-lease income as economic growth slows in 2020

Savills Investment Management prefers long-lease income streams in 2020 instead of value-add and opportunistic strategies that depend on economic and strong employment prospects.

At the current late stage of the investment cycle, the outlook for pan-European occupier markets is weaker than it has been for some years. Various forecasters expect economic growth to remain subdued over the next 12 to 18 months as global demand loses momentum and several geopolitical risks remain unresolved. Nonetheless, Savills IM’s 2020 Outlook highlights that opportunities remain in the office, retail and logistics sectors, but investors must be mindful of asset location, structural changes and resilient formats, among other characteristics.

Andreas Trumpp, head of research, Europe, at Savills IM, commented, “At this point in the cycle, we are seeking long income streams. We prefer CBDs, fringe-of-CBDs and central city locations where buildings are located close to good tran