Research Reports

The public REIT market enjoyed a big comeback in recent months with yields declining and investors rotating into defensive sectors of equity markets. We remain convinced REITs are an attractive way to deploy capital into real estate today. In this brief REIT market update, we discuss reasons why and the current state of REIT market conditions.

In our monthly Insights into Private Markets (IPM), we provide you with bite‑sized updates into real estate, infrastructure, private equity and private credit. This month, real estate investors are waiting in the wings following the Fed’s decrease in rates. This might give infrastructure investors some comfort in knowing that financing markets are likely to improve steadily. We explain why rate cuts could jump start exit slumps in private equity and why lower rates may have an impact on residential real estate credit as the cutting cycle has commenced.

The European logistics sector has navigated a period of significant adjustment over the past few years. Looking ahead, we see signs that the sector is at an inflection point – be it economic growth, stabilizing occupiers and the demand for modern stock. The most notable shift is in the demand for modern product with higher specifications which are increasingly required by tenants and their changing distribution requirements. We believe modern product will be the cornerstone of a successful logistics real estate strategy, particularly in the context of rapid technological advancements and evolving ESG standards. Whilst it is near impossible to time market cycles, we believe there is compelling data to suggest that meaningful opportunities are beginning to present themselves to investors looking to add or build logistics exposure in Europe.

The turnaround in interest rates has brought greater momentum back to the Swiss real estate market and led to a stabilization of yields and a normalization of the risk premium. The residential segment in particular is attracting great interest from investors thanks to sustained growth in demand and increases in rental price.

Greenhouse gas emissions share a common ancestry with these miracle products. Heating buildings with diesel fuels, running gas lines through city streets, producing electricity with coal-fired plants—these were all logical, economical, and sensible solutions to the problem of bringing energy to homes, businesses and buildings of all types. The industrial revolution accelerated the growth of cities and raised the quality of life for millions of people by dragging them out of rural poverty. As we now know, society’s dependence on fossil fuels creates new problems which must be dealt with. The recognition that miracle products can carry hidden (or not so hidden) dangers follows a predictable pattern. Take a look at the step-by-step process.

As we approach what feels like the most widely anticipated Federal Reserve interest rate cut this month, we are looking ahead to the REIT revival likely to accompany the upcoming rate-cutting cycle. Our optimism is based on two considerations: 1) policy rate cuts have historically been a catalyst for REIT performance and 2) REITs offer a compelling opportunity for real estate investors versus core private real estate funds, and for all investors versus broader equities.

Is multifamily still an attractive investment in this evolving macro landscape? We think so. Japan’s transition from deflation to inflation is expected to have positive implications on longterm yield spread and rental growth. Nonetheless, the demographic trend is a pivotal factor and should guide our investment focus.

Multi-tenant light industrial real estate continues to exhibit compelling fundamentals. The sector has demonstrated remarkable resiliency during major economic disruptions, including the Global Financial Crisis (GFC) in 2008, the depths of the COVID-19 pandemic in 2020, and the rapid interest rate hikes from March 2022 to July 2023. In 2023, broader industrial fundamentals experienced a slight deceleration, primarily due to factors such as a wave of new deliveries, tenant demand normalization, extended inflationary periods, elevated financing costs, and global economic uncertainties. Despite these challenges, optimism remains high for multi-tenant light industrial properties due to their innate, fundamental advantages and secular tailwinds. Favorable changes in capital markets, including anticipated interest rate cuts in the near future, are expected to further enhance the sector’s performance.

In our monthly Insights into Private Markets (IPM), we provide you with bite‑sized updates into private equity, private credit, real estate and infrastructure. We may be reaching a recovery in real estate and have undergone a positive mid‑year health check in infrastructure. Performance looks stable in private equity, with nascent recovery in venture capital and investors are looking to understand how looming rate cuts may impact returns in private credit.