DWS Remains Constructive on U.S. Real EstateSource: Business Wire
- Firm releases 2019 strategic market outlook report for U.S. real estate
- Report examines various factors creating headwinds and tailwinds across sectors
“The underlying fundamentals of the real estate market remain healthy.
Therefore, our view is it is too early to batten down the hatches,
shunning growth oriented sectors, markets, and assets that can thrive
amid strong fundamentals,” said
The report also includes a breakdown of DWS’s sector allocation, as well as various factors impacting the outlook and strategy on each, such as:
- Industrials (Overweight): Market fundamentals in the U.S. are expected to remain strong for the next two years due to several factors including low current vacancy rates, a disciplined construction pipeline and the proliferation of e-commerce.
- Apartments (Market-weight): Favorable macro trends should sustain healthy renter demand. Combined with the signs that the supply pipeline is abating, the apartment sector should return to positive net operating income growth. It is unlikely that absorption can offset the sizeable pipeline of new supply.
- Retail (Underweight): Though the sector remains under duress due to the boon in e-commerce, it’s kept a float by strong consumer fundamentals and service-oriented retailing. Going forward however, economic fundamentals that underpin consumer spending may not be as favorable and could put pressure on discretionary spending.
- Offices (Underweight): Performance is expected to continue with modest growth, though the high cap-ex burden, a trend toward densification, and persistently low cap rates create risk and return imbalances.
“In a mature phase of the cycle, we are adopting sector allocations with a keener eye toward risk. As we continue to monitor various trends and developments impacting the markets, we’re constantly analyzing our exposure to certain sectors to ensure we’re minimizing risks while generating the best returns for investors,” Henderson said.
We offer individuals and institutions access to our strong investment capabilities across all major asset classes and solutions aligned to growth trends. Our diverse expertise in Active, Passive and Alternatives asset management – as well as our deep environmental, social and governance focus – complement each other when creating targeted solutions for our clients. Our expertise and on-the-ground-knowledge of our economists, research analysts and investment professionals are brought together in one consistent global CIO View, which guides our strategic investment approach.
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For informational purposes only, not a recommendation or endorsement of a specific security.
The brand DWS represents
All investments involve risk, including the potential loss of principal.
For the full copy of the U.S. Real Estate Strategic Outlook and
further information, please contact:
DWS Group Media Relations
Phone: +1 (212) 250-0072