Where future demand lies – The Property Chronicle
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Where future demand lies

The Analyst

Shopping centres and offices are the surprise front-runners in the REIT scene.

In the spring edition of The Property Chronicle, I ventured to suggest that, while there is something for everyone in the REIT sector this year, retail property could complete the sector playing with a full deck of cards. To recount, attractive dividend yields and their surety of growth is available from a number of companies where you might not make much capital, but the income stream is long and strong. Logistics shows absolutely no sign of slowing down, with ultra-strong investment demand and ongoing rental growth. London offices are savaged by the bears citing a vacancy rate approaching 10%, but dig deeper and grade A vacancy is under 3.5% and the development pipeline muted ahead of a disproportionately high concentration of ‘lease events’ over the next three years. Throw in the ‘E’ in ESG as a growing and important requirement for occupiers, and I have little doubt that tenant demand will focus solely on only the best space available, of which there isn’t much. Rents will fall a bit this year, but could rebound strongly next and investment demand is well evidenced. 

The Analyst

About Alan Carter

Alan has worked for nearly 40 years as a sell side property analyst and salesman, and has been a salesman at Stifel for the last five years.

Articles by Alan Carter

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