Real Estate Trends

Video
February 20, 2019
Will building skyports for flying cars become the latest "must have" feature for luxury residential buildings? Will there be human settlements on Mars? Despite decades-old predictions, it doesn't appear that they will revolutionize real estate any time soon¹. However, there are key global real estate trends for 2020 that are likely to impact investors in the near term, ranging from climate risk to improved data availability and transparency.

Top 5 Real Estate Trends for 2020

Climate risk: Getting to the bottom line

  • We now see physical climate risks materializing within real estate portfolios today. As a result, investors realize that mitigating and managing these risks are likely to be today's problems, not tomorrow's.

    Places are for people: Social impact investing

  • No building is an island, cut off from all around it. They are inextricably linked to the built environment, community and society that surround it. Investors want to understand these impacts in more detail.

    The many dimensions of real estate risk

  • As a complex asset class real estate has a great many dimensions of risk to consider that combine in a myriad of different ways and more than ever we need new ways to coherently analyze these risks.

    Beyond 'location, location, location'

  • The drivers of real estate value have almost always been more diverse and complicated than the adage "location, location, location" would suggest. Outside of sector and geography, what emerging drivers can we start to consider in a systematic way?

    Everything is relative, and only that is absolute

  • As real estate has become a larger part of investment portfolios there is increasing need to formally wrap its analysis into overall portfolio management which may require a new level of data and analytics. Relative market comparisons can help place performance in context and provide insight into drivers of return, for fixed and absolute-return portfolios.

    • FURTHER READING

    Read the full blog from Will Robson, for a deeper dive into the top five emerging real estate trends for 2020.
    Will Robson
    Executive Director,
    Global Head of Real Estate Solutions Research,
    MSCI
    Read the blog 1 Numerous technological barriers stand in the way of these innovations. See, for example:"Brown, D. "Possibility or pipe dream: How close are we to seeing flying cars?" USA Today, Nov. 4, 2019.
    Clifford, C. "Elon Musk defends plans to build a community on Mars after downbeat NASA report." CNBC, Aug. 2, 2018.
    For real estate investors, 2019 looks to be another year of adjusting to rapid changes arising from a variety of sources. At MSCI Real Estate we have identified the five emerging real estate trends we view as most likely to impact our clients' investment decisions over the next 12 months.
    • ESG risks on today's investment horizon
    • Few places left to hide from geopolitical risk
    • Technology-driven disruption
    • Real estate investing in the age of transparency
    • Endurance of cycle
    Watch the 1 minute video of the real estate trends from 2019. Download Video Transcript (98KB).

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