Talking Point  

Advisers favour residential investments

Advisers favour residential investments
A block of residential appartments in King's Cross(credit: Chris Ratcliffe/Bloomberg)

Residential and industrial facilities are among the property types advisers are most likely to increase their client's exposure to over the next 12 months, according to an FTAdviser poll.

When asked about the property types they favoured, a third (33.3 per cent) said residential, 26.7 per cent said industrial facilities, while 20 per cent said warehouses.

Some 13 per cent said warehouses, while only 6 per cent said they would consider increasing exposure in shopping centres.

Shopping centres have struggled in recent years, as a result of the rise of online shopping, a trend which accelerated during lockdown and has carried on.

Over 8,700 chain stores disappeared from UK’s retail locations in the first six months of 2021.

In total, 3,488 shops opened, compared to 8,739 closures, creating a net decline of 5,251, according to PwC research compiled by the Local Data Company (LDC). 

When it comes to ESG performance, industrial properties are leading the way in commercial real estate, globally, according to a study by Deepki, an ESG intelligence firm.

A recent survey of 250 European pension fund managers in the UK, Germany, France, Spain and Italy, with a combined AUM of €402bn, shows that across different segments of the real estate sector, industrial properties such as warehouses and manufacturing sites lead the way when it comes to ESG performance.

The report asked respondents to rate the performance of eight commercial property sectors.  

Two thirds (62 per cent) rated the ESG performance of the industrial sector as good or very good, followed by leisure (61 per cent), and retail (60 per cent).  

This compares to logistics and office real estate which had the lowest ‘positive’ rating of 47 per cent and 44 per cent respectively.