By Sadie Malim
Cautious optimism can count itself in a rather large group of overused phrases in real estate, but it’s one that springs to mind when I consider this year’s pre-MIPIM mood music.
Improved confidence levels that characterised the back end of 2024 and continued into the start of this year have been tempered by recent events across the pond. Attendees will be alive to the fact that it is too early to judge the impact of this latest wave of geopolitical tension, but its disruptive influence on global trade supply chains, interest rates and other macro-factors cannot be ignored. Expect this to be the pre-cursor to undoubtedly interesting – and divergent – conversations on risk mitigation, asset allocation and portfolio construction.
I consider myself fortunate to be in a group of MIPIM attendees likely to find themselves at the more optimistic end of the spectrum: UK investors. The UK’s political stability relative to its European counterparts is solidifying the pillars of an attractive investment proposition: value recovery; low institutional penetration rates; early mover advantage; potential for scale; and compelling supply-demand dynamics in structurally supported sectors.
Conversations with our capital network and recent research from INREV, CBRE, and MSCI attest to this, pointing to the UK as one of the top preferred destinations for cross-border investment.
UK living and Industrial attract the highest levels of investor confidence according to data which are firmly aligned with Moorfield’s two investment themes: Living and Storage (self storage). We see potential for superior risk-adjusted returns in sectors that are still largely undersupplied and supported by demographically driven tailwinds – as well as having the opportunity for alpha generation through hands-on asset management strategies where ESG is pronounced.
Both sectors offer inflation hedging qualities that can cut through cyclicality of global markets provide resilient income streams capital growth. We also recognise that rising interest rates create opportunities for managers who are willing back their convictions with attractive debt today offering a window acquire assets strong long-term fundamentals materially discounts thanks in part to reduced competition.
With almost 30 years’ experience investing UK real estate, our deep networks combined with our specialist knowledge at local level, puts us excellent position to capture this opportunity.