Back to School: RLI at the first Investment Day of the
Frankfurt School of Finance and Management and TARGA Communications
Luisa Hollmann, Portfolio Manager at RLI, sat together with around 80-100 other experts from the real estate industry in one of the lecture rooms at the Frankfurt School – with distance, of course – and heard what the panelists had to say on the complex topic of investment. Topics that were exciting and relevant for RLI were, on the one hand, the effects of the Covid crisis on the real estate market and “sustainability and digitalization” in the real estate context. The conclusion of the topic “winners and losers of the crisis”, which was repeatedly emphasized by various speakers, was, if not really surprising or new, definitely positive for the logistics real estate industry.
Luisa summarized the key messages of the event for us as follows.
Experts have a positive view of the “real estate future”
Investments in commercial real estate via fund vehicles make perfect sense currently. Logistics real estate is emerging from the crisis as a big winner, mainly in Europe. With regard to the types of logistics, it turned out that the demand for “last mile logistics” in urban locations with good connections to the city center will grow.
The Netherlands, France and especially Germany were named as the “winning countries”, while the Eastern European countries were emphasized several times. There may be continued high demand for logistics properties, with sometimes „crazy“ prices. At the moment, there are many inexperienced players in the logistics real estate industry who are totally new to the asset class. In view of the best risk-rent ratio in the logistics asset class, this is not surprising.
Sustainability is becoming the new normal
The clear message was that sustainability has developed from “nice to have” to “must have”. Every company has to deal with sustainability in order to be competitive. Sustainably built properties will generate a higher return in the long term. Many investors already have their own ESG strategies and expect them from their investment products, too.
However, they do not want to pay higher rents for expensive building technologies. The aim must be to minimize operational costs through efficient buildings and processes. However, the experts consider it questionable whether to add these savings to the basic rent.
“The positive and sometimes exuberant mood of the participants during the entire day of the event showed how much everyone is looking forward to an offline event. I also really enjoyed the day and used the Investment Day to network during the breaks in addition to listening to exciting and entertaining lectures”, summarizes Luisa Hollmann.