Theme 1.
Retail Warehousing
Why we like it:
An evolving asset class:
The blending of traditional retail, click and collect, last mile logistics and service stations are creating a new asset class.
Restricted supply:
A combination of planning policy and conversions to alternative use is reducing supply.
ESG premium:
On site renewable energy generation reduces occupier costs and net carbon footprint
Theme 2.
Central London offices
Why we like it:
Relative value:
Cyclical timing exploiting market illiquidity in the sub-sector.
Restricted supply:
Supply constrained investment thesis accelerated by government legislation (MEES compliance) and tenant demand dynamics – opportunity for rental growth for the right assets.
ESG premium:
ESG compliant assets have stronger rental growth prospects. When liquidity returns these assets should outperform.
Theme 3.
Alternative use STRATEGIES
Secondary offices are no longer fit for purpose as landlords do not or cannot continue to invest in the buildings due to (1) lack of demand and (2) meeting government MEES (ESG linked) legislation
This has led to office values declining
Strategy developed to exploit this market dynamic and create value through repositioning the building from offices to living sectors – residential, students (PBSA), hotels, apart-hotels
