Real Estate has been hit strongly by the pandemic. E-commerce and 'Work from Home' are probably the main trends that have emerged during last year, and they have done so to the detriment of physical stores and offices, respectively.
This has weighed down the performance of real estate assets at a general level, which just seems to begin to show signs of recovery. As always, active management appears here as a key factor to know how to differentiate between smart and reckless bets.
The exponential growth of e-commerce and connectivity, for example, has triggered the demand for industrial buildings, data centers, and telecommunication towers, so we consider that these Real Estate sectors are well-positioned as a strategic bet for the future.
Furthermore, according to S&P data, in Q4 2020 REITs reported a sequential improvement in rent collection (above 90% - compared to 80% during the lowest point of the recession). Taking into account that real estate indices have not recovered their pre-pandemic levels, a tactical allocation in portfolios towards these types of assets should not be ruled out.