Last year wasn’t short on challenges. Cromwell’s COVID-19 response provided us with an abundance of content ideas, from how our property teams were keeping buildings safe to predicting what our new baseline for ‘normal’ will be once we’re on the better side of this pandemic. There were also the business as usual articles, regular ‘In conversation’ series and educational pieces.

This article lists the five most read articles of 2020. We look forward to bringing you more insightful content in 2021 and beyond.

1. GDP vs GDP per capita

As more major economies begin to reach peak population, as currently experienced by Japan, Russia and some of Western Europe, their GDP will, in turn, begin to decline unless they find ways to become substantially more productive and ‘do more with less’.

Australia’s population is expected to grow 24% to 31.4 million by 2034, meaning over the medium term our GDP figures should continue to be propped up by this increase. However, if productivity and population growth were to decline at the same time, we might need to reconsider how we measure economic success, particularly if gross GDP numbers become consistently negative.

As such, GDP per capita, which is a measure of a country’s economic output that accounts for its number of people, may be a better yardstick than GDP as it paints a more nuanced picture. Growth in GDP per capita demonstrates how much economic growth is exceeding population growth, which can be used as an indication of improvement, or decline, of living standards.

Read the full article here.

2. The emergence of build-to-rent in Australia

The build-to-rent movement in Australia is gaining steam and could offer benefits for both investors and occupants if the required reform is executed effectively.

Build-to-rent refers to a residential development in which all of the units are retained by an owner or developer and leased out, as opposed to being sold off to multiple owners as per the traditional build-to-sell model. The developer owns and manages the units as long-term income generating assets, typically benefitting from economies of scale when it comes to maintenance, repairs and other general upkeep.

As owning a house becomes a more distant dream for many, people are prepared to rent for longer. As such, for investors, build-to-rent provides diversification from traditional asset classes by providing a secure revenue stream with a new and growing customer base. Institutions deploy capital into the build-to-rent sector overseas in order to diversify their portfolios and achieve a low-risk, stable, long-term income return for their investors.

Read the full article here.

3. essential guide to investing in unlisted property trusts

Despite being published in late-2019, ‘The essential guide to investing in unlisted property trusts’ was still one of the best performing educational pieces in 2020. Property remains one of the favoured investments of Australians due to its potential to provide both income and capital return. Its low volatility relative to other asset classes, such as equities, is a strong attraction, particularly in the current COVID-induced environment.

The guide outlines the different ways though which an investor can gain exposure to commercial property, ranging from direct investment, private syndicates, pooled professionally-managed property trusts, ASX-listed real estate investment trusts (A-REITs), or unlisted property trusts.

As the title suggests, a particular focus is placed on unlisted property trusts, which contain characteristics most like a direct purchase of a commercial property, with the added benefit of professional management. As unlisted property trusts are generally priced based on the underlying valuation of their property assets, their price volatility is a lot lower than A-REITs and the value of the investment is primarily influenced by movements in the commercial property market rather than by the broader share market.

Read the full article here.

4. Will drones impact how investors select logistics assets

The growth of e-commerce has spurred on expectations, with consumers becoming increasingly demanding, expecting goods quickly, with free delivery and returns, all at a competitive price point. COVID-19 has furthered this trend and even after the roll out of a vaccine, we are likely to see a continued level of increased demand once we get back to a new ‘normal’.

Logistics operators are therefore examining innovative ways of more efficiently and effectively delivering goods to consumers. Drone technology is one way they could do this and could significantly change the way goods are delivered with an associated impact on logistics assets.

Read the full article here.

5. The e-commerce evolution accelerates

In 2020, the world changed dramatically. While some trends were stopped in their tracks by COVID-19, others such as the rise of e-commerce, simply accelerated. In this infographic, we looked at the drivers behind e-commerce growth and some of the implications for real estate.

Some of the drivers included more people having access to and spending more time on the internet than ever before, along with the increasingly demanding consumer and COVID-19 lockdowns leading to an increase in online buying behaviours.

No matter what the future holds for consumers, retailers or logistics operators, technology is driving disruption along the entire length of the value chain and is changing the requirements of tenants in all real estate sectors.

Read the full article here.

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