Editor: Observing the data column this week, I couldn’t help but consider the growth in investment volumes across the retail, office, industrial and hotel sectors. Since NavigatorCRE expanded from the US into the UK last year, I have been paying close attention to the aforementioned sectors and their behaviour.
Savills’ calculation professing a 6.2% net income yield and 5.4% capital growth in the London industrial sector over the next five years proved the value of data for projecting patterns and trends for investors. Supporting that forecast, we are seeing the industrial and logistics sector continue to dominate demand, as rising needs in ecommerce and last-mile delivery have exploded over the last 24 months. Increasing shifts from retail and office asset classes to hybrid asset classes with close in and last-mile distribution capabilities, especially those with freezer/cooler functions, will be of the highest demand as groceries and ghost kitchens increase the demand for delivery-first concepts.
Investors should feel quite confident in utilising these data-driven forecasts in supporting capital allocation decisions, but they should not neglect the value of integrated data at the portfolio and asset level as well. Without such data-enabled forecasts paired with asset and portfolio level insights, investors are in danger of being left in the dark in an increasingly dynamic market. While a rising tide of investment may lift all boats, the most informed allocators and operators will have an opportunity to generate outsized returns for their investors.
William Young, regional head of UK, NavigatorCRE
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