The division of property types is likely to shrink – report

In comparison, the 20-year average spread between the highest and lowest property types in the United States was 11.9 percentage points, according to the report.

In the UK, the best-performing type of real estate, industry, returned 29.6% and the worst-performing sector, office, returned 2.3%, a gap by 27.3 percentage points.

The difference between the best and worst performing property types in the US and UK has been around 10 percentage points on average over the past 20 years, according to the report.

The wide spread in 2021 was caused by changes in tenant preferences and behavior that were accelerated by the COVID-19 pandemic, including more people working from home and shopping online, according to the newspaper. Industrial and residential real estate types have benefited from this trend, while hotels, offices and retail have suffered.

Additionally, the relative decline in transaction volumes for office and retail buildings, which were historically the two largest real estate sectors, has pushed investors towards specialized property types such as single-family home rentals, according to The report.

While the best performing asset types such as multi-family and industrial buildings are expected to continue to attract investor capital, disadvantaged asset types such as hotels, offices and retail are expected to start to rise. gradually recover between 2022 and 2024, as those sectors regain some of the market share lost during lockdowns, said Richard Kleinman, head of LaSalle’s U.S. research and strategy group and co-CIO for the Americas, based in Chicago.

“We are seeing signs of renewed investor interest in retail,” Kleinman said in an interview.

Desirable retail properties, such as power centers anchored in grocery stores, are on the radar of institutional investors because they have generated stable income and are well positioned for the recovery, he said.

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