While the yield level continued to decrease
the risk premium for taking location risk and
for prime locations and for the most attrac-
for investing in different types of retail prop-
tive segments, the yield level remained sta-
erties has increased.
ANNUAL REVIEW RESIDENTIAL
INCREASING YIELD SPREAD ble at the more secondary locations and for the less attractive segments. Therefore,
In the market for secondary office proper-
we saw price increases for both residential
ties, hotels and retail properties, there are
properties, logistics properties and well-lo-
thus good opportunities for first-movers to
cated office properties in 2021. The opposite
generate relatively high risk-adjusted returns
was true for secondary office properties,
by entering the cycle early before the yield
hotels and almost all types of retail proper-
spread narrows again.
As always, the interest rate development was a
After almost two years challenged by the pandemic, the stores
significant topic during 2021. While long-term
and restaurants are starting to look towards brighter times again.
interest rates both increased and decreased dur-
The two years with lockdowns, uncertainty and declining turno-
ing the year, short-term interest rates remained
ver have shown that the retail market neither was nor is dying. The
at a record low level throughout the year. How-
e-commerce market got optimal conditions with employees work-
ever, the talk of a lasting increase in long-term
ing from home and closed physical stores, and e-commerce also
interest rates have become more entrenched and
got a boost. However, the physical stores are coming back strongly,
seems to be an expectation among most inves-
and we have experienced a limited number of bankruptcies and
tors. Although an increasing interest rate envi-
consumers that are on their way back to the stores – because for-
ronment seems like a realistic scenario, due to
tunately, we miss getting outside our homes and meeting other
expectations of increasing inflation, the yield
people.
requirements for real estate decreased.
RETAIL
INTEREST RATE INCREASES
THE DOMINANCE OF E-COMMERCE HAS BEEN CANCELLED
LOGISTICS
OFFICE
ties, where the stagnation continued. Thus,
Therefore, the total dominance of e-commerce has been cancelled and replaced by the right balance between physical experiences
large amounts of capital allocated for return-
and online stores. Currently, several “pure” online stores choose to
giving assets and the limited supply of properties
open physical stores and thus show that there are synergies to be
in the Nordic countries, where a large part of the
gained between a strong online platform and presence on the right
capital is directed at.
locations in the cities.
HOTEL
In our opinion, this is an expression of both the
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