For decades, institutional portfolios were built around a familiar architecture: equities, fixed income and alternatives, each in its own silo. This traditional strategic asset allocation (SAA) model served investors well in an era of stable correlations and predictable macroeconomic patterns. But the world has changed. Asset class boundaries have blurred, markets have become more complex, and investors increasingly need to respond to opportunities and risks in real time.

Artificial intelligence represents both a sustainability tool and a sustainability stress test for real assets. At the micro level, AI improves how buildings are managed, measured and retrofitted. At the macro level, it drives electricity demand growth, strains grids and, in some markets, forces greater reliance on high-carbon power. Its impact depends on marginal energy mix, grid capacity and the pace of electrification.

Institutional real estate investors are attracted to Australia for a reason: Its market typically offers transparency and stability whether the world enjoys economic growth or churns through crises. With global markets roiled anew in recent months by the Iran war, what should investors understand about investing in Australia?