Logistics, office and real estate investment trusts (REITs) will continue to deliver good results as the economy recovers and continues to reopen, according to Lobien Realty Group (LRG).
Despite current global events slowing down the economic recovery process, LRG believes many industrial sectors can look forward to more positive circumstances in the near future.
LRG recognized the relationship between the overall economy and the real estate industry. When the economic outlook improves and GDP increases, the real estate industry also rallies to the point where a bull market prevails for years.
LRG expects the warehouse and storage sector to continue its growth trajectory for years.
During the pandemic, this is the only segment of the real estate industry which did not contract- posting an 8.2 percent growth, primarily driven by the doubling of e-commerce revenue in a span of two years–from P600 billion in 2020 to a projected P1.2 trillion industry in 2022.
REITs delivered significantly on their promised dividend yield with 6.75 percent actual versus 6.768 percent expected dividend yield and are expected to outperform stocks until the majority of retail investors increase their stock exposure amid inflation concerns.
LRG said the office space market lease-out rate has also improved as of the third quarter and is expected to further recover in 2023, underscored by a probable decrease in rental rates as landlords push vacant spaces in the market and the increased demand due to economic recovery and back-to-work actions of most companies.
“Our fearless forecast: another frenetic bull run in the real estate market is expected after its recovery in2023,” said With the expected economic recovery in 2023,” said Sheila Lobien, LRG's chief executive officer.