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Property investors are told there is huge potential for purpose-built accommodation, including student and apartment complexes.
Rob Martin, global head of real estate investment strategy and research at Legal & General Investment Management, spoke at Fisher German’s annual real estate briefing earlier this month.
He said: “When it comes to demographics, he simply says three words: cash register, cash register, cash register. Whether it’s student accommodation or “multifamily” accommodation, which is making up an increasing share of investment funding allocations. Whatever the case, there is great potential for purpose-built accommodation in the UK.
“ESG remains extremely important and we must not lose sight of it. Occupiers value it and investors factor in ESG capital expenditure when considering commercial real estate purchases. I’m here.”
Panelists said that economic factors, such as both interest rates and inflation remaining high, and geopolitical factors, such as elections in the US and UK, rising nationalism, and conflicts around the world, particularly in the Middle East and Ukraine, will I felt it was going to be unpredictable.
Martin added: “Countries around the world are putting up more barriers to free trade and immigration, all of which will have knock-on effects on the economy.”
“Advances in AI and the need for more space in data centers also show no signs of slowing down and will frame many decisions in the commercial real estate market.”
Global economist Dr. Rebecca Harding stressed that growth could slow in 2024 due to high economic and geopolitical uncertainty.
“With major elections taking place in the UK, US and Europe in 2024, there is a possibility that unwise campaign promises will be made to win votes, or decisions will not be made until a new government is elected,” he said. There is a possibility that there will be a “stagnation in the election” where no vote is taken.”
“As a result, interest rates may remain high and inflation may not fall as expected, negatively impacting demand in the housing and commercial markets.
“On the geopolitical front, it remains to be seen how the violence in the Red Sea will affect global trade and related markets such as oil prices. Escalating conflicts in the Middle East and Ukraine could put further pressure on the global economy. It may cost.
“ESG remains very important, but reporting requirements are currently unclear and could potentially lead to ‘green hashing’.”
“There is certainly a conflict between who pays for ESG and who benefits from ESG. When regulatory frameworks are inconsistent or ineffective, investors benefit more than the planet. It may seem like it is.”
Mr James added: “2024 will give investors a lot to consider. The megatrends identified by Rob Martin and the global pressures highlighted by Dr. Harding are the overall drivers for the real estate investment market. However, the dynamics will be different in different sectors and regions.
“For example, LGIM predicts that assets in London and other urban areas are likely to perform better over the period to 2028, with residential and industrial sectors performing best on average. The retail sector is highly diverse and is negatively affected by known obsolescence risks, but we must not forget that the office sector is expected to perform better.” and provide opportunities for reuse. ”