RealCast: Logistics trends persist, office sector awaits return, high-impact loan

Nicol Dynes, Paul Strohm and Richard Betts

In the spotlight this week:

In the spotlight this week, Real Asset Media’s briefing on logistics, part of Transport Logistics 2021 online event, examined the main themes in the sector. demand for logistics space is not expected to slow down as the pandemic recedes. Online retail sales volume in Europe last year was equivalent to the previous five years combined, emphasising that the biggest driver of growth in Europe has been the transformation of the retail landscape.

With huge demand for all types of logistics assets is pushing up prices to levels not previously thought possible. Meanwhile, the “nearshoring” phenomenon is a reaction to supply chain problems and is a trend also likely to persist beyond the pandemic. Otis Spencer, chief investment officer at P3 Logistic Parks said Central Europe will be a beneficiary.

Meanwhile, in the office sector a BBC survey of the 50 biggest employers in the UK revealed that 43 of them plan to let their workers return to the office two to three times a week. The survey estimated that 20% less office space will be needed. Nevertheless Goldman Sachs has told its UK and US employees that they will all return to the office in June.

The macro impact of the working-from-home phenomenon varies from city to city and some cities are more vulnerable than others. Large cities such as London and Paris have bigger workforces, a higher proportion of which can work from home but students and tourism can compensate and smaller and medium-sized cities are likely to be worse off.

In a separate report, Germany’s city quarters represent an opportunity worth €200 billion with major potential for investors – 616 city quarters have been identified in Germany. City quarters also play to ESG concepts.

Elsewhere, Tishman Speyer have agreed a €70 million office loan which is linked to the firm’s social impact.

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