Realcast: Retail recovering, ESG on every tongue, living goes for impact, Hines gets disruptive

In the headlines this week:

Last week, MIPIM heard much discussion about Credit Suisse, but few there could have been expecting the merger with UBS to materialise so quickly, creating a reportedly $160 billion real estate “behemoth”.

Meanwhile, in the UK, retail sales have grown 2.2% in the last quarter but are still 2.3% down on the same period last year. Among retail research just published Lambert Smith Hampton and Revo have revealed that 40% of UK shops will need to be “reinvented” during the next five years.

In the lostistics market, UK-listed investor London Metric simultaneously exchanged and completed on the sale of a portfolio in the UK’s West Midlands for €52 million generating returns significantly above initial expectations owing to to accelerated rental growth and yield compression. British Land also completed the acquisitions of 300,000 square feet of retail parks, explaining that retail parks have emerged as a preferred format due to their compatibility with omni-channel retail.

ESG was mentioned in almost every MIPIM panel and almost every conversation there, it seemed. Revitalising city centres is something Legal & General is focusing on and CEO Nigel Wilson said that investing for impact it makes good commercial sense because it can deliver good returns as well as benefits to society and there is a misconception that ESG investments are riskier – the opposite is true. Plus, investors like to do the right thing.

Scandinavian housing investor Heimsatden Bostad has established a combined green and sustainability linked financing framework, Nuveen has launched an Article 9 global real estate carbon reduction strategy.

The “living” sector, also one of the big MIPIM themes, has featured in the news in the last week. In Colliers research into the PRS sector in CEE, the rural-to-urban migration now familiar and well established in many more mature economies is influencing the markets there. The Czech Republic’s PRS sector leads in terms of the amount of stock – 62,500 units, up 10% on 2021. Poland is in second place with just 10,000 units. House prices in the region have increased dramatically with Hungary in the lead at 108% growth.

Elsewhere in the sector Heitman has acquired Norwegian student housing platform Bo Coliving with a portfolio of about 1,400 beds in 13 Norwegian cities.

In Germany, Catella Wohnen Europa has acquired a 62-unit wood-hybrid affordable apartment scheme in Berlin.

In other news, property company Hines has created a new global business unit, EXP by Hines, intended to address disruptive changes in the built environment.

Click on the video to see the full discussion or listen to the podcast below.