Even purpose-built student accommodation (PBSA), a counter-cyclical property type if ever there was one, suffered from the malaise that high interest rates inflicted on real estate investment in 2023. Behind the depressing economic headlines, however, student housing continues to tell a positive story.
From the Current Issue
While the real estate industry is grappling with a host of ESG-related challenges, progress is being made in addressing issues such as data collection, analysis, reporting and standardisation. Availability of data — especially at the asset level — is a key challenge for asset owners and managers. Whilst some data, such as energy consumption, is becoming easier to access, there remains a significant gap when it comes to obtaining information relating to the efficiency and sustainability of individual buildings and its occupants. This data has been hard to obtain for various reasons.
In Europe, health expenditures as a percentage of GDP can be as high as 12.7 percent (in Germany), and health expenditure per capita is growing by 3.3 percent more than inflation across the member countries in the OECD. This growth has significant implications for the real estate sector, with demand rising for different type of facilities, including laboratories, incubators, accelerators, clinics, manufacturing facilities and cold chain distribution, to name just a few.
The COVID-19 crisis caused an unprecedented shock to the hospitality sector. Across the board, operators experienced the largest revenue drops on record. Many encountered a cashflow crisis. Those that survived did so thanks to the contribution of multiple stakeholders. Governments deployed a series of measures to cushion the impact of lockdowns; lenders provided liquidity through covenant waivers and loan guarantee schemes; and landlords offered to defer rent payments amid fear of tenants’ insolvency and empty premises.
Recent data from Savills into the UK flexible office market shows that in the first half of 2023 up to 43 percent of deals were management agreements. It is clear the growth of the flex office market, coupled with the desire to improve returns from their assets, has encouraged landlords to consider alternative options to traditional leasehold agreements.
How do you align the interests of a tax-exempt investor and a taxable investment manager? Bringing them together into the same room to let them network and engage in interesting conversations certainly isn’t the way. You might be able to break down some of the normal barriers to open communication, but you have done nothing to alter the nature of the relationship dynamics that drive investment outcomes.
Biodiversity is a consideration of the environmental impact of real estate that is critical, but often completely overlooked. As well as offering substantive performance benefits, promoting biodiversity can be done with limited capital expenditure as part of a broader sustainability strategy.
Target real estate allocations across Europe, Asia Pacific and North America have decreased for the third year running among investors. According to the 2024 Investment Intentions Survey produced by ANREV, INREV and PREA, the current average allocation to real estate globally is 10.6 percent, but the average target allocation is 10.4 percent. European investors are the most bearish on expected allocations, with a substantial 43 percent expecting a decrease in allocations — and only 16 percent expecting an increase.
Germany has enough warehouse roof-top solar panel capacity to entirely replace any reliance on fossil fuel energy sources. GARBE Industrial Real Estate has claimed that the country’s industrial and logistics stock, if used to host roof-mounted photovoltaic (PV) systems, would be able to produce energy to replace the output of 36 hypothetical nuclear plants or 121 gas- or coal-fired power stations.
Knight Frank has forecast that office take-up in London will hit 12 million square feet (1.15 million square metres) for 2024 — 12 percent higher than in 2023.
With its Price Expectations Gap model, MSCI indicates how far apart parties sit on pricing and quantifies the gap that needs to be bridged for transactions to get moving again. The model — powered by the MSCI Real Capital Analytics transaction database — can be used alongside other indices to enable investors to develop a fuller picture of what is happening in terms of pricing.
As property assets continue to be repriced, the asset class itself remains a cornerstone of many institutional clients’ portfolios. This is one of the key findings of Universal Investment’s 12th annual survey among German institutional investors, conducted in late 2023.