CREF-C Investment Highlights
Five Takeouts from the CREF-C November Conference;
Last week, AEI sponsored the Annual CREFC Summit.
Gene Belli and I attended the incredibly intellectually rich Autumn Conference at UBS. It’s impossible to capture all of the wisdom contained, but here’s some top line thoughts gleaned from our keynote speakers:
Residential: Government targets of new home build is going to be tough. Use of strategic land rather than regeneration land is lower risk and strategic land has wider shoulders to carry the burden of economic change. Reticence to invest in brownfield due to latent risks, but repurposing is an option in areas where change can unlock asset classes no longer fit for original purpose.
Commercial: Distribution is key in changing patterns of consumer behaviour and remains attractive with LastMile Logistics still a key driver. New working patterns change face of commercial with WeWork model dominating thoughts of office developers. Change is a big driver and Brexit dithering has caused a reticence to commit to big deals.
Retail: Big theme here is LA’s and the big Combined Authorities have been one of the few investing in existing retail assets, with repurposing as the back story. Low level of new retail funding shows a significant drop year on year over last 4 years with consumer buying patterns threatening further the high street as we know it.
Infrastructure: Call for collaboration within public and private sector to produce joined up thinking regarding the unlocking of strategic land potential. Big rail schemes and local rail schemes unlock value via connectivity and will be crucial to meet the strat land residential imperative.
Manufacturing: The Car Industry was the key topic debated; calls for greener cars (albeit those that are merely changing the point of pollution) means AV’s and RPT are fast oncoming. Younger generation trends are to non-vehicle ownership, using pool options such as ZipCar as a preferred solution. UK car industry to come under further pressure post Brexit due to tariffs and also the closing down of options to manufacture commodity vehicles for US market due to lack of need of imports.
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