By ANNE ASHWORTH, Daily Mail, 15 June 2024:
For the past few years, the commercial property sector has been an investment no-go zone, ravaged by higher interest rates, inflation and the pandemic’s impact on shopping and working.
The general disquiet was highlighted this week by the cancellation of the stock market launch of Special Opportunities, a Reit (real estate investment trust) which was aiming to acquire ‘very high-quality’ properties at rock-bottom prices from distressed sellers and pension funds seeking to ‘de-risk’.
But if you have long horizons and an appetite for risk, you may find this an opportune moment to examine the opportunities.
Office blocks, for example, are seen as an area worth exploring – but only so long as they have tip-top technology and impeccable green credentials.
Also essential are the ‘office peacocking’ features that make a workplace a lot more appealing than working from home.
These include roof terraces and luxurious shower and other ‘end-of-trip’ facilities.
Tenants are increasingly demanding such upgrades. In April, £900million-plus was wiped off the value of the Canary Wharf towers in London Docklands, largely because the accommodation is viewed by some as outdated..
Private equity groups are also swooping on office blocks and other bargains, while UK, US and European institutions like Aviva, Axa, Brookfield, M&G and PGIM, a division of insurance giant Prudential, seem to reckon the worst is over..
Richard Williams of analytics group QuotedData likes Urban Logistics Reit, which is trading on a discount of 27 per cent and specialises in the smaller warehouses that serve the ‘last mile’ of the supply chain between a company and its customers.
It’s a segment of the warehouse sector that is ‘vastly under-supplied’, according to Williams.
Read more here