It has been one of the few good weeks for ‘man’ (occupied offices and physical retail) versus ‘machine’ (logistics), with Landsec and British Land both up 20% but declines for Zoom (-15%), Amazon (-6%) and even the seemingly unstoppable Segro (-2.3%).

The investment market is unrecognisable as the market I joined two decades ago. In my early days it was driven by the experienced (and largely domestic) generalist, who ran a balanced portfolio and was thus sector-agnostic. Acquisitions decisions were made on the individual merits of buildings. Since then, the internationalisation of ownership and ready availability of data have meant the identification of global ‘themes’ in buying (prioritising the macro rather than the micro). This in turn has led to sweeping generalisations, the most obvious of which is ‘retail bad and logistics good’ (which has parallels with the Orwellian ‘four legs good, two legs bad’). 

One of the best things about Brits is their radar for being misled. A number of the big owners of retail (mainly listed REITs) have spent the past five years as the property equivalent of Flat Earthers, denying physical retail was in decline, 20 years after Amazon’s arrival in the UK. Masking of rents became an art form, marketing literature was rebranded as research pieces, and confidence in the valuation community collapsed. This has been evident in the massive discounts to NAV in public markets for those companies with any significant retail weighting.