Industrial in the Limelight: Secular Shift or Cyclical Rotation?
categories: Americas, EMEAI, Asset Allocation and Asset Liability Management, Investing (Investment Management), Performance Analysis, Risk Management, Asia Pacific, Asset Owners, Research Paper, Real Estate, Asset Managers (Quant or Fundamental), Real Estate Products & Services, NIHALANI Amit, general
In 2017, industrial real estate had the highest sector total returns across many global markets. We have found that this was not just a rerun of industrial’s normal cyclical rotation, but that there were signs of a secular revolution starting, driven by e-commerce. In many global markets, the spread in yields between industrial and the other commercial real estate sectors has compressed more over recent years than in previous cycles. In the U.K., where outperformance was particularly pronounced, the spread between industrial and office yields turned negative (an unprecedented event) and assets with logistics- and distribution-related tenants were particularly strong performers.
Watch Will Robson speak about the Performance of Industrial Real Estate for 2017