Real estate shielded from effects of deglobalization, MSCI report finds

Although deglobalization is having profound implications for portfolio construction, a new report by MSCI suggests that real estate will be less exposed to the effects of deglobalization than other asset classes, as there are indications the asset class has become more global in recent years.

Surveys show continued strong demand for cross-border investments among the world’s largest institutional investors. Property type has become a more important return driver across all markets, as return dispersion across national markets has decreased and cross-border transaction volumes have remained stable. However, even with relatively stable flows across borders, there is evidence that real estate may have become more global based on return behavior.

In addition, institutional real estate investors may have less exposure to countries significantly exposed to decoupling risk due to deglobalization.

However, institutional real estate investors could still face challenge