Core is no more. Or at least, it is not what it was a decade back. That change is both a blessing and a curse. There is greater sophistication among investors, and an expanding pool of subsectors that could classify in the asset class. But today’s core also requires more intensive analysis of segments that are often operationally complex.
Times have certainly changed. “Ten years ago, core in Asia Pacific was still shorthand for trophy office and retail in gateway central business districts, underwritten largely on tenant credit and lease length,” says Jacqueline Wang, co-CEO at Cambridge Real Estate Partners. “The last five years — COVID-19, the rate cycle and the structural repricing of office — broke that.”
So, what does modern core mean?
Core is less about a targeted return, and more about reducing variance in outcomes, Wang believes. Income should not meaningfully deteriorate even in an economic downturn, and there should be li
