FEATURES | SPONSORED CONTENT
Investing in real estate: beyond residential and retail With real estate’s Covid-related challenges in the news lately, Shannon Murphy sat with Shane Solly, Portfolio Manager of the Harbour Real Estate Investment Fund, to discuss where he sees opportunities in a sector with increasing dispersion of returns. BY SHANNON MURPHY AND SHANE SOLLY
Murphy: When we’re talking about investing in real estate, many of us think mostly of offices and retail. What sorts of real estate do you look at? Solly: Offices and retail are a part of the sector, but there are many other types of real estate which can add diversification to a portfolio. For example, industrial real estate is an increasingly disrupted space. Manufacturing, distribution centres, transport logistics, data centres (for example Amazon Web Services) and cold storage are all benefiting from automation and business change. They also tend to have longer lease terms, 14 | ASSET 02 | 2021
between four and 20 years, and therefore lower volatility in cashflows. Examples of the types of real estate Harbour invests in include childcare centres, land lease communities, healthcare and industrial logistics (dark stores and grey stores). Murphy: What are dark and grey stores? Solly: With the rapid increase in online sales and home deliveries, businesses have had to rapidly adapt their distribution channels, to deliver great outcomes for consumers and keep costs low for retailers.
When people buy their groceries online, sometimes their groceries come from their local supermarket, but they may come from a dark store or a grey store. Dark stores are industrial warehouses dedicated to rapid dispatching of online orders – they are not open to the public, they feature high product racking and often robotics and automated product picking. As a result, they have very few people working in them and often have low levels of lighting – hence the term dark store. To keep costs down low and be super-efficient
