November

27 2020 (Tan Shing Yee)

Amidst the latest positive vaccination news, many institutions and investors have changed their market strategy and
investment focus. Given the decision of authorising vaccine production will be due around 10 December, many investors
have already high hopes towards its effect and on the revival of many halted industries such as hotels and travel resorts,
oil and gas and residential, while others such as data center have been surging due to increase usage of technology during
the pandemic which is predicted to only further rise from hereon.

Home prices surged the most on the record in Q3 according to a report by the Federal Housing Finance Agency. Mortgage
rates have been record-low and thus fuels demands for housing as evidently seen when Bloomberg reported more
individuals are living alone rather than depending on roommates due to more affordable rents/mortgages. Prices jumped
3.1% compared to Q2 which is the biggest gain in records dating to 1991. Residential REITs have seen a gain of 6.6% of
the S&P CoreLogic Case-Shiller Index, the biggest since 2014; de initely a strong buy with the advantage of low rates.
There also has been a lot of activity among Hotel & Resort REITs, from the positive hope towards the near-future
tourism industry. Many foreigh investors have acquired distressed hotels especially in Italy, due to the prediction of a
6.2% increase by 2025 in the luxury tourism market.

As more industries are adopting digital and software strategies and the rise of ecommerce irms, Data Center REITs have
been at an all time high demand. Some residential players have also invested in digital sales and leasing processes to
incorporate virtual tours and AI simulations along with omnichannel integration for personalized content which allows
residents to quickly ind their desired space. Many institutions are leaning towards automating processes to reduce OPEX
and CAPEX, as well as increase work ef iciency and accuracy. Evidently shown is the positive gradient trend of Equinix,
market cap of $61.7bn, which might be overvalued but their promising regional activities have set many to predict an
even greater increase than its current +22.35% in stock price.

Finally, with the Brexit transition period ending soon, investors predict the hit on the UK might be worse than COVID.
Many skilled workers residing in the UK are currently EU citizens; with Brexit implemented, many fear that the supply of
skilled labour might decrease as there might be restrictions due to VISA regulations for the EU to acquire jobs in the UK.
Thus, the London of ice market might be vulnerable to Brexit because inancial tenants that bene it from EU trade
agreements, such as investment banks, might be tempted to relocate outside the UK in order to continue to operate across
the EU. Hence Of ice REITs have recently seen lower transaction volumes than in previous years. However, anecdotal
evidence suggests that there remains signi icant appetite for of ice investments, particularly core assets.