- November 1, 2018: Vol. 12, Number 10

To read this full article you need to be subscribed to Institutional Real Estate Europe

Building resilience: Which cycle-insensitive assets will deliver predictable income streams over the long term?

by Eleanor Jukes

Shops, offices and sheds: the three cornerstones of commercial property investment. From these bricks and mortar holdings an owner expects to receive long, predictable income streams and (hopefully) an appreciation in capital values.

Or do they? The capital side of the investment equation has certainly been giving some owners of property sleepless nights recently. With shortening lease lengths, more break clauses and greater incentives, commercial cashflows are becoming increasingly volatile — and that is before we even consider voids.

So perhaps it is not surprising there is now a widening divergence in sector composition across property portfolios. We are seeing increasing evidence of investors reweighting towards more income-resilient areas and away from those under stress, such as the retail market. Analysis of the MSCI IPD Property Index suggests the allocation towards defensive sectors ­— in this instance, industrial and non-commercial (alternative) property

Forgot your username or password?

We use cookies and other tracking technologies to personalize your user experience on our site and perform site analytics. By clicking on “I accept”, you consent to our Privacy Policy.