| Positive property market thinking…
There's a decidedly upbeat feel to this week's newsletter kicking-off with our guest feature from Paresh Raja, the founder and CEO of London-based bridging loan provider Market Financial Solutions (MFS), who is in pretty bullish mood about the prospects for the UK housing market, despite Lockdown 3.0.
The rapid roll-out of the coronavirus immunisation programme, the current stamp duty 'holiday', and last year's record UK house price increases, are all reasons to be optimistic, if not cheerful, about 2021 says Raja, who believes that alternative lenders can also fill any gaps in the mortgage market vacated by 'twitchy' mainstream lenders.
"If there are any lessons to be learnt from last year, it’s that you should never underestimate the ability of British real estate to make positive gains in uncertain times," says Raja.
A new report from LaSalle strikes a fairly positive tone on the prospects for the European real estate market as a whole, with the company predicting that the most successful investors with be "active on both sides of a growing chasm between favoured sectors such as logistics and residential, and less favoured property types including retail and office assets".
According to the report, the pandemic has accelerated the long-term process of investors rebalancing their portfolios away from traditional sectors such as office and retail into logistics, residential assets and niche sectors including healthcare properties and self-storage facilities. But investors can still take advantage of mispriced assets as they emerge in the retail and office sectors.
Pan-European investor and asset manager M7 meanwhile says there is still demand for UK regional office assets with the company having recently completed four lease renewals on behalf of M7 Real Estate Investment Partners III (M7 REIP III) across c96,600 sq ft of regional office space generating a total rent of GBP1.32 million per annum.
German commercial real estate meanwhile, is tipped by Savills to see continued strong demand in 2021 having seen transaction volumes reach EUR59 billion last year, only 6 per cent below the five-year average. "Active vendors and buyers are likely to ensure a high transaction volume this year,” says Marcus Lemli, CEO Germany and Head of Investment Europe at Savills.
A new report from Alpha Real Capital suggests that investors looking for real estate returns while making a positive impact on society should look to the Social Real Estate (SRE) sector, with every GBP1 invested resulting in a GBP3-4 societal value, as well as cashflows at spreads of 5 per cent-plus per annum over index-linked gilts.
“Investments in SRE can deliver quantifiable societal benefits, satisfying investors’ social targets as part of their responsible investment strategies, but they can also deliver high-quality, inflation-linked cashflows,” says Adrian D’Enrico, Head of Social Real Estate at Alpha Real Capital.
And finally, LaSalle is looking to further accelerate its ESG intiatives with the appointment of David DeVos as Global Head of ESG, and Elena Alschuler as Vice President of Sustainability in the Americas.
"We believe that integrating ESG best practices into our day-to-day work is the most efficient method to maximise investment performance for our clients while minimising our impact on the environment," says Tim Kessler, Global Chief Operating Officer of LaSalle.
Property Funds World
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