Publications

- February 1, 2018: Vol. 10, Number 2

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Something special: Specialty property types are a key element of smart portfolio construction

by Leslie Chua

Specialty property types offer investors a rare combination: yields that exceed those of traditional property types and defensive characteristics in their operations. As a result, these property types tend to perform well across the cycle. An allocation to specialty property types — including data centres, medical facilities, senior housing/care homes, self-storage and student accommodation — is a key component of smart portfolio construction. Over the past 20 years, self-storage and student accommodation have gained acceptance as institutional-quality property sectors in the United States and Europe, and are attracting increasing investor interest in Asia Pacific.

Demographic trends support both sectors. Rising household income and expansion of the middle class are changing consumption patterns across the region. Urbanisation continues, accompanied by compression of living space, setting up demand for off-site storage. Similarly, growing demand for higher education has h

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