The UK property sector has seen its fair share of ups and downs in recent years, with the current crisis only working to widen the gap between the 'winners' and 'losers', particularly in the world of real estate investment trusts (REITs).
There have been rapid, almost overnight, changes in the way the UK works, shops, and socialises, and services face new pressures and demands.
This in turn has seen trends that were expected to come to fruition many years down the line, occur in a matter of weeks.
For investors, the key to knowing where the opportunity in UK REITs will be as we start to recover from the pandemic lies in understanding just how it is accelerating these structural trends and changes that were underway prior to the outbreak.
Retail, healthcare and office space
For example, retail. The widespread closure of physical stores and order to 'stay home' has accelerated an already fast-moving shift towards e-commerce with the older demographic embracing e-commerce, particularly online grocery shopping, for the first time.
In May, Office for National Statistics data estimated monthly growth for online retailers was a huge 19.7%, and online sales share of the market continued to rapidly ascend, now representing 33.4% of retail sales.
The magnitude of this sudden shift should not be underestimated. The previous trend growth rate suggested May's 33% share was expected to occur many years into the future, likely nearer to 2028.
This marks a significant acceleration in the changes that were already underway before Covid-19 hit.
This explosion in online retailing is one major driver pushing the outperformance of logistics REITs. CBRE research estimates that warehouse-based e-tailers require 2.5x the square footage of logistics space compared to traditional retailers.
Clearly, a greater volume of online orders naturally increases demand for logistics space for the stocking, picking, packing and shipping of products direct to shoppers' front doors.
Similarly, the need for greater investment in healthcare has been paramount in the wake of the virus. With an already ageing population, the pandemic has brought greater urgency to the need to improve and expand the likes of GP surgery buildings, particularly if social distancing measures are to continue.
Social distancing may also have an impact on urban office space. While it seems the end of the road for the trend of 'hot-desking' in offices across the country, and a move towards more flexible and home working, the social nature of people means a return to offices remains likely in the future.
What may change is the facilities staff need and want. Hence the likelihood is that demand for modern, spacious workspaces with good showering and wash facilities could face greater demand.