UK - Savills has launched a series of papers to identify alternative property sectors, in response to unprecedented volatility seen in the mainstream UK commercial real estate market.
The real estate adviser said the UK market had faced one of its toughest tests during the 44% peak-to-trough decline between 2007 and 2009, and has ramped up its research in alternative sectors that may offer more secure, longer or less volatile income streams.
In its latest report, entitled Alternative Property Sectors: Securing an income stream, Savills said that with demand enhancing the pricing pressure on prime traditional assets of retail, offices and industrial, the "buy list" is likely to be extended to other sectors.
It said investors have typically viewed government leased property and large corporates as secure, but the recent bout of company insolvencies in recent months has raised questions over such a perception.
"Property has a dual role of securing income return and capital growth," said Steve Lang, director of research at Savills.
"Buoyant economic conditions often provoke headlines regarding capital value movements and the less volatile income return is overlooked. It is worth noting this income not only provides investment return but helps keep the loan servicers at bay when capital values do decline," he added.
Future reports will focus on assets which may offer diversification and stable cash flow, including healthcare and self storage, while Savills has already looked at serviced apartments and student accommodation earlier this year.