- Commercial landlords can benefit from rising rents and asset values in an economic recovery
- However, sector selection has become more important following the pandemic as rental income is less reliable
The prospect of a post-pandemic bounceback in the economy and huge government stimulus has heightened expectations of rising inflation. As investors question whether central banks could intervene by raising interest rates faster than anticipated, and pulling back on asset purchasing, turmoil has ensued in some parts of the market.
Real estate investments could offer a port in the storm and benefit from a rising inflationary environment. However, the damage wrought by the pandemic on many businesses means that assets that may have previously risen faster in value than inflation are unlikely to offer the same protection.