Outlook 2024

10 essential questions for real estate investors

As we look ahead to 2024, we address some of the questions that will drive our strategies in the next year and beyond. What are the most promising growth areas? Why is Natural Capital set to become so vital in the coming years? What forces are driving the logistics sector and is now the time to invest? Why is the Living sector showing so much potential and why should investors stay the course with ESG – despite policymakers changing their tune in some areas? Our expert analysts share their views.

Introduction from the CEO

Alex Jeffrey
Chief Executive
Savills Investment Management

Welcome to the Savills Investment Management Outlook report for 2024. It tackles 10 of the most pressing questions facing real estate investors as they assess their positioning for 2024 and beyond. The questions cover Living, Industrial & Logistics, Debt, Natural Capital, Technology and more. Here, we reveal our high-conviction views on the topics that we think present the biggest opportunities, and challenges, as we approach a new economic cycle, with all the opportunity that entails. We hope you find them enlightening for your thoughts in 2024 and beyond.

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The night is darkest just before the dawn
The tail end of this cycle is proving to be protracted as policymakers take a cautious view on inflation. While interest rates may well have peaked, there is no sign yet of any pivot to cutting, which markets expect at some point in 2024. Indeed, central banks appear largely cognisant of what Milton Friedman called the “long and variable lags” between implementing monetary policy changes and the time they take to have an impact. With that in mind, patience is the watchword at central banks, implying a higher for-longer policy on rates, with no respite until probably late next year. Whilst there are challenges presented by higher interest rates and bond yields, real estate has its place for investors when it offers a compelling yield, capital protection or indeed capital growth. On that basis, opportunities are evident within real estate, but to spot them one needs to focus on the fundamentals and try to ignore the noise that amplifies only the negative headlines.

A borrower or lender be?
Whilst borrowers will be questioning the accessibility to, and viability of, their finance, new lenders into the market are increasingly well positioned. As conventional lenders operate more conservatively, opportunities have opened for nimble alternative lenders able to fill the gap. We have been capitalising on opportunities in debt markets, specifically with whole loans and senior loans where clients are drawn to the capital protection on offer, whilst potentially benefiting from high risk-adjusted income returns. See pages 6-7 for details.

Stick to the fundamentals
Our analysts covering the Living (Beds) and Industrial & Logistics (Sheds) sectors recognise strong and growing occupier demand coupled with critical shortfalls in the quantity and quality of supply. With both sectors starved of suitable accommodation, they have seen, and will likely continue to see, strong rental and income growth, particularly in the strongest urban areas. See our arguments as to why investors should increase relative weightings to ‘Beds and Sheds’ in 2024 on page 14.

Climate and nature matters, now
Sustainability and Net Zero Carbon discussions are being unsettled by the economic and political backdrop, but our commitment is resolute. Our long-term approach remains to become a restorative business by 2050. Think of this as a step beyond net zero. More immediately, we are committed to short-term measures to reduce operational (energy) costs and protect against obsolescence due to regulatory demands that are an imperative for investors right now. We are acting to improve the climate and the health of the planet on a number of fronts, most recently by creating a Natural Capital strategy to channel funds into replenishing biodiversity and limiting global warming.

Out of vogue?
The retail and office sectors remain challenged by ongoing structural and cyclical issues that will see further value declines. This will reinforce negative perceptions, but equally could offer potential opportunities from their repricing. The consensus won’t always be right. Prime buildings in amenity-rich office and retail locations will retain strong appeal to occupiers and consequently investors, but we warn that these opportunities are more limited than many may expect. Supermarkets, with long and secure index-linked leases, are an attractive segment of an unloved retail sector. See pages 22-23 for more information.

And don’t just take our word for it.
This year, we have also asked experts from outside our organisation to supplement our articles with their own views, taking us to task or supporting our opinions. Thanks to those experts for their contributions to help deepen investors’ understanding of the challenges we face, and the opportunities that are there to

Savills IM - Outlook 2024 Global real estate investment

Outlook 2024 - 10 essential questions for real estate investors

Download the report to learn more.

10 questions for investors in 2024 and beyond:

Macro Perspectives

Back to the future: how should real estate investors be positioned in a world of higher interest rates?

01Dawn after darkness in real estate investing?

Focusing on income and rental growth, rather than falling yields, is key to asset allocation as rates may remain elevated for some time.

Real Estate Debt

Is now the time for real estate debt?

02Is now the time for real estate debt?

There is an array of effective debt strategies that work to preserve capital and provide attractive risk-adjusted returns. Have you considered how it fits in your portfolio?

The Value of Space

Space: the final frontier: is supply the strategic imperative in real estate?

03Is space the final frontier in setting real estate allocations?

Few investors consider the implications of technology in real estate and its impact on productivity – we consider it an invisible supply dynamic that investors must assess.


Is the focus on ESG going to fade as the cost of business and living rises?

04Will ESG fade as cost sensitivities rise?

While policymakers seem reluctant to impose ESG costs during a cost-of-living crisis, we argue that short-term measures such as insulation and energy efficiency can pay quick dividends.


How to embrace data analytical innovations within real estate?

05Is technology disrupting the already disrupted?

While the potential of AI is making headlines, investors need to get their data in order to maximise the benefits of AI on their portfolios and decision making.


Cents and sensibility: what can landlords do about residential renter affordability?

06What can landlords do about renter affordability?

There’s no quick fix for property supply, but preventing cost leakage on existing properties and focusing on retaining tenants for longer could help cut renovation costs during voids.

Industrial and Logistics

Boxed in? Are we past peak industrial and logistics performance?

07What are the forces driving Industrial & Logistics growth?

A focus on assets in or near urban centres is driving up both rental growth and land prices - while also saving tenants costs on fuel and distribution.

Natural Capital

Why invest in Natural Capital?

08Why invest in Natural Capital?

Capturing carbon from the atmosphere, and preserving and restoring the UK’s forestry and farmland, is essential for meeting net zero targets.


Is there a future for office investment?

09Is there a future for office investment?

Prime offices remain in high demand but those in secondary locations or lacking ESG credentials may be best avoided. Investors may need to rethink their office strategies.


Retail meets therapy: Where should investors shop for returns?

10Where should investors shop for returns?

Footfall has returned in many of Europe’s prime shopping locations, and thanks to a repricing, retail now offers some of the highest yields in real estate.

Savills IM - Outlook 2024 Global real estate investment

Outlook 2024 - 10 essential questions for real estate investors

Download the report to learn more.

Get in touch

Thank you for your interest in the Outlook 2024 report. Please get in touch with us by email to learn more: marketing@savillsim.com