That was the question asked by the BPF Futures in their latest breakfast workshop / networking event.
A senior line-up of 6 sector specialists each pitched the case for their sector deserving your investment in 2018 - who would win the poll between logistics, shopping centres, hotels, build-to-rent, student accommodation and retirement living?
Take home points (and revealing of the winning sector) follow...but before you read on, please make sure to join BPF Futures (as well as Maples Teesdale’s “Emerging Leaders” initiative) if you are a junior or mid-level real estate professional!
Logistics (Sally Bruer, Tritax Group): all about the income play - secure and growing income (both in value and length), in a sector that is cheaper to develop and experiencing innovational advances, e.g. multi-storey units and sheds & beds
Shopping centres (Jonathan Cole, Ellandi): polarisation between destination centres and community centres, brings opportunities amongst the latter asset class which is much more resilient to internet penetration. Interesting stat - over last 5 years, growth of online retail has slowed whereas total store sales have increased...retail is far from dead, just pick the right sub-class!
Hotels (Peter de la Perelle, Tower Hotel Management): find the right place for the right operator, undertake a feasibility study successfully and you are onto a winner.
BTR (Neil Young, Get Living): a maturing sector with strong market fundamentals (chronic under-supply), government support (long term debt at cheap rates)...2018 is the right time if you want to hit the upwards curve of the cycle.
Student accommodation (Nick Hayes, Unite Group): strong market fundamentals again - UK is 2nd ranked Higher Education provider globally, with structural under-supply and a growing student population (despite lower 18 year old demographic, due to increased participation rates), also seeing increased institutional investment...but Brexit risk in relation to £10bn EU funding?
Retirement living (Sadie Malim, Moorfield Group): private market model is highest growing sector, but requires high levels of sophistication to structure, with deferred service charge (equity release) arrangements and nursing/medical care provisions.
So, what would you pile £100m into?
The room voted - 33% for retirement living, 30% for industrial, 20% for BTR, 8% for hotels, 5% for shopping centres and 4% for student accommodation.