2024 Winter Issue of Urban Land - 90

% EXPECTING TO INCREASE EXPOSURE OVER NEXT 5 YEARS
Figure 5-3 % expecting to increase exposure over next 5 years
Solar farms/solar
energy generation
Medical office
buildings
Private healthcare provider clinics and
medical practices
Geothermal energy
generation
Wind farms/wind
energy generation
HGV parking/electric
vehicle fleet charging
increase exposure over next 5 years
42%
33%
33%
30%
29%
27%
26%
y
e
nd
es
d
e
ve
es
or
S)
os
s)
ry
26%
17%
16%
16%
15%
15%
15%
Hospitality-driven
meeting and event space
Battery
storage
Carbon sequestration/capture and
storage plants/facilities
Cold
storage
Post-operative
care facilities
Industrial outdoor
storage (IOS)
Media production studios
(film, TV, music, podcasts)
Timber/forestry
Farmland/
rural land
Communication
towers/fibre
E-sports/gamingarenas
or venues
Campsites, camping and
caravan parks
Seabed rights/submarine
offshore pipelines
42%
33%
33%
30%
29%
27%
26%
26%
17%
16%
16%
15%
15%
15%
15%
14%
12%
11%
5%
Source: Emerging Trends Europe survey 2024.
Interviewees agree that in an era when higher rates
are likely to be the new normal and increases in
property values are not guaranteed, the move toward
complex and more operational alternative sectors
will probably accelerate. " A lot of value was created
just because of the fact that cap rates were going
down, " says one global investor. " Now we're in an
environment where cap rates are going up, so it's a
lot harder to make money. " That puts more emphasis
on creating value by growing income and having
assets where demand will be sustained.
The evidence that real estate investors increasingly
want to put their capital into alternative sectors
has been evident in Emerging Trends Europe for
years. When the report was first published in 2004,
it analyzed the prospects for just nine sectors. The
number is now 26. However, investors also need to
Source: Emerging Trends Europe survey 2024
Source:
90
URBAN LAND WINTER 202 4
Battery
storage
Carbon sequestration/capture and
storage plants/facilities
Cold
storage
Post-operative
care facilities
Industrial outdoor
storage (IOS)
Media production studios
(film, TV, music, podcasts)
Timber/forestry
Farmland/
rural land
Communication
towers/fibre
E-sports/gamingarenas
or venues
Campsites, camping and
caravan parks
Seabed rights/submarine
offshore pipelines
overcome challenges to expanding into niche sectors
that are inherently smaller and less mature.
26%
The rise of colocation
The impact of hybrid work on the office sector
remains a top issue for many market participants.
They believe reducing overall costs, location, and
attractiveness to talent will be the three most
important factors driving occupiers' workplace
strategies. Additionally, some industry players see
solutions to obsolete or underused assets that involve
looking beyond a siloed approach and advancing
ideas around colocation. A majority of respondents
(86 percent) believe that colocation, or the practice
of combing different uses into a single mixed-use
building or location, will increase.
17%
16%
16%
15%
15%
15%
15%
14%
12%
11%
5%
Communication
towers/fibre
E-sports/gamingarenas
or venues
Campsites, camping and
caravan parks
Seabed rights/submarine
offshore pipelines
15%
14%
12%
11%
5%
Farmland/
rural land
Source: Emerging Trends Europe survey 2024
Source:
Source: Emerging Trends Europe survey 2024
Source:
Colocation can include different combinations of
office, residential, retail, hospitality, or other uses in a
single building or location. Some 35 percent of survey
respondents expect a hybrid model of three or more
sectors to be the most common combination within
their portfolio. Successful places will feature multi-use
space that attracts different generations and types
of users, argues one institutional investor, and it will
be large, sophisticated real estate players with the
scope to control and reshape whole districts that are
likely to lead the charge. " Those places will be urban
and transport-led. You have to be a big player to
generate scale and management efficiencies. Valuing
them is complicated. Managing them is complicated.
But that's the future. "
Real estate as social infrastructure
Another theme highlighted in Emerging Trends is that
of real estate being akin to " social infrastructure. "
Although not all industry players share this view,
some believe it to be a trend accelerated by the
desire from investors for their real estate investment
strategies to align with broader environmental, social,
and governance (ESG) policies.
Real estate is an industry that is not just " creating
a lease so we can collect the rent, " as one investor
says, but investing in the space required to meet
the most fundamental needs of society, and in many
cases fulfilling needs traditionally met by government.
The interlinked challenges of environmental
sustainability, regulation, and asset obsolescence are
expected only to increase in importance over the
next five years. Nine out of 10 survey respondents
believe that running an environmentally and socially
sustainable business is the most important factor for
a successful organizational transformation within the
real estate industry by 2050. " ESG compliance is not
a 'nice-to-have.' It's a license to play, " says the CEO of
a pan-European property company. UL
BETH MATTSON-TEIG is a freelance business writer and editor based in
Minneapolis.
2024 Winter Issue of Urban Land

Table of Contents for the Digital Edition of 2024 Winter Issue of Urban Land
