Amid a slower-growth environment overall globally, investors will focus on the relative outperformers. This relates to sectors, geographies and business models that are in the path of growth, whether structural or cyclical. Opportunities are emerging now in real estate’s growth sectors and will continue evolving through the next cycle.

Investors will continue to focus on sectors that are less mature across markets in terms of share of investment, such as logistics and living. And beyond that, key alternative sectors such as data centres and life sciences are on global investors’ roadmap. This reallocation will present an opportunity for diversified, stable income streams and higher returns.

Life Sciences

The focus on life sciences was accelerated by COVID-19 – evident in the exponential growth in life science real estate investment over recent years, particularly in both the US and UK. This sits within broader categories of science & technology / research & development but has gained significant traction. Now, life sciences may be a beneficiary of office repurposing, with a strong potential development pipeline in many global markets. However, a limiting factor for growth could be funding; global VC fundraising has slowed significantly this year. Despite this, large funds still have record dry powder, so optimism remains that start-ups will continue to access finance in their drive for continued growth.