Returns for favored property types in the U.S. and Canada are expected to trend lower in 2021 and 2022, according to LaSalle Investment Management's Investment Strategy Annual report to be released Tuesday.
In the U.S., these "winners" include industrial, suburban apartments and niche properties such as medical office, life sciences and self-storage, the report said. In Canada, the most favored property type is industrial, followed by apartments, despite some weakening in so-called fundamentals, such as occupancy rate and rents. LaSalle said the "challenged" property types are retail, office, hotels, senior housing and student housing.
For winning property sectors, unleveraged, property-level returns for new acquisitions are moving to 5.5% in 2021 and 2022 , the report said. For the challenged property sectors, LaSalle expects returns to be close to zero in 2021.
By comparison, the trailing year returns as of Sept. 30 by sector in the U.S. were -8.8% for mall retail, -3.5% for open-air retail, 1.8% for central business district office, 2.3% for apartments, 4.3% for suburban office and 10.1% for industrial.