14 MARKET VIEW
Growth engine: the trend towards e-commerce is driving demand for modern logistics centres.
opportunity set that has grown over time,” Haggerty says.
A related theme is the growth of cloud com- puting and the Internet of Things, which must be accommodated via specialised data centres. “These growth themes reflect the change in the infrastructure that supports our daily lives and will continue to underpin rapid growth in demand for specialised real estate for decades to come,” Haggerty points out. The active advantage Another unique feature of today’s listed real estate market is lease durations, which can range from as short as a day to over a decade. With inflation hovering at the highest levels for a generation, Dybas says the role of active man- agement in generating long-term alpha cannot be overestimated. “Just as bond portfolio manag- ers can adjust the effective duration of their portfolios, active managers of listed real estate can do the same through a selection of listed real estate securities with a shorter or longer average lease duration,” he explains. “When pric- ing power rises for landlords, having the ability to reprice leases more frequently is a significant advantage – particularly for those property sec- tors with typical lease durations of one year or less.” These sectors include lodging, apart- ments, single-family home rentals, manu- factured home communities, student housing, senior living and self-storage sectors. “The pool of property sectors with a typical lease duration of one year or less represents a significant
REITs take responsibility Finally, aside from inflation, environmental, social and governance (ESG) factors remain a key investor consideration for the remainder of 2022 and beyond. Duff & Phelps, which integrates ESG analysis into its fundamental processes, says that the REIT market has made a number of positive strides forward in recent years. “Listed real estate investors regularly engage with companies to encourage improvement in ESG practices and disclosures,” Haggerty concludes. “As ESG practices and opportunities continue to grow in importance, we believe listed real estate owners are better positioned to meet the future ESG requirements of tenants, employees, stakeholders and shareholders.”
Nordea 1 – Global Real Estate Fund
Geoffrey Dybas and Frank Haggerty
Managers
USD
Base currency
LU0705260189 (BP-USD) LU0705259504 (BI-USD)
ISIN
15.11.2011 (BP-USD, BI-USD)
Launch date
nordic friends
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