Future Research Priorities
The Centre has identified a number of areas for future research but is keen to hear the views of key market players as to their own priorities. Areas currently earmarked for research include:
Risk Characteristics of Real Estate Vehicles: it is increasingly recognised that the risk and return of real estate depends not only on the income and capital appreciation of the underlying assets but also on the vehicle in which the properties are held: its institutional and capital structure. Meanwhile, investors increasingly are looking beyond traditional asset class boundaries to classify assets into groupings that reflect their sensitivity to particular types of risk factors. The Centre is keen to explore these ideas on a number of dimensions, continuing and extending its work on leverage, capital structure and real estate;
Real Assets and Non‐Traditional Real Estate Investments: linked to the previous theme and developing prior research work, we will continue to investigate the performance of non‐traditional real estate investment areas in relation to the traditional core investments of office, retail and industrial property and to explore the relationship between real estate and other real assets – a theme given added importance with recent focus on infrastructure as an investment;
Sustainability, Resilience and Performance: the Centre will pursue research on sustainability and real estate markets at different scales ‐ continued research on the energy performance and environmental sustainability at building level and its link to value and return, complemented by a broader perspective on sustainability and urban resilience, promoted by, for example, the Urban Land Institute and by the World Economic Forum’s agenda council on the future of cities and real estate. The interaction between real estate investment and development and the fortunes of cities is likely to be a key theme for the Centre;
Ownership, Globalisation and Yield Structures: prompted by the growing dominance of non‐ domestic purchasers in London (and other world gateway cities), the focus of this research includes attempting to understand the implications of growing global capital flows on market performance and values. For example, what is the basis of investment yields when global investors with lower costs of capital not tied into the local market become significant in a particular city sub‐market? This work ties in with ongoing research on global capital flows and investment concentration;
Technology, Risks and Opportunities: an emerging theme is the impact of technology on all real estate markets and the performance of real estate portfolios. This encompasses the risk to traditional real estate formats and cashflows from technology e.g. new working practices and new patterns of consumption but also includes opportunities e.g. the potential benefits of smart building technologies in driving greater efficiency of usage and more focussed management to maximise returns. The Centre has forged links with the Department of Engineering’s Smart Infrastructure and Construction Centre to help explore this area;
Real Estate Risks in a Multi‐Asset Class Portfolio Context: drawing on a number of themes above this work will explore a number of approaches to the problems of identifying both known risk factors and uncertainties in investment and how to integrate real estate into multi‐asset class frameworks for risk analysis. The Centre is part of the Cambridge Finance Network;
Investor perceptions and preferences: this research seeks to explore the role of real estate as an investment for high net worth investors and how this compares with other investor groups and how preferences differ between generations. Given the changing composition of the investor mix this research could help identify how these differences are influencing the market and how this may change going forward;
Long run capital growth and depreciation: this research theme explores long run performance across property segments and examines the factors that have led to depreciation.
Placemaking and regeneration: this theme looks at mixed use developments both in terms of performance and impact relative to smaller single use developments and their interaction with local economies, infrastructure and policy.