ISA 2020 OVERVIEW
In the 26th- edition of the Investment Strategy Annual, we address the five themes that will shape the real estate investment environment for at least the next three years and likely longer. Some assets and strategies amplify these trends and will deliver “high beta”, others are much more insulated from all the noise and should be considered “low beta”.
Mastering the simultaneous need for fast/intuitive and slow/careful thinking becomes an important skill to develop in the speeding-up world of real estate, in a slowing-down economy. We review techniques to help investors determine portfolio objectives. We present our outlook for the property types and countries that are the most attractive. We share our best investment ideas.
The Case for Real Estate in 2020
LaSalle has made many contributions to the evolution of real estate’s accepted status as an asset class and the case for real estate in a portfolio.
The macro outlook for 2020 indicates that the global economy will be slowing, which means that rent growth, leasing and other drivers of real estate income could downshift to a lower gear. Yet, slow growth means that interest rates could also stay low and contribute to elevated asset valuations.
Meanwhile, the pace of structural change could ramp up, as technology acts simultaneously as a disruptor and an accelerator to both economic and social trends.
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LaSalle 2020–22 Real Estate Universe
Defining the Real Estate Universe
PUBLIC REAL ESTATE
The gross asset value of real estate owned by REITs and REOCs listed on public exchanges. Includes vertically integrated development companies in emerging markets but not exclusive homebuilders.
INSTITUTIONAL-INVESTED REAL ESTATE
The unleveraged total value of all professionally managed real estate portfolios, both public and private.
TOTAL INCOME-PRODUCING REAL ESTATE
Total commercial (office, retail, industrial, alternatives) and rented residential buildings. Owner-occupied residential homes are not included.