Publications

- July 1, 2018: Vol. 12, Number 7

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Accessing global core: It’s time to build a true global real estate foundation

by Bernie McNamara and Pulkit Sharma

In today’s investment landscape — marked by low but rising interest rates, signs of accompanying inflation, and increasingly volatile equity markets — institutional investors are searching for stable sources of income and diversification, as well as opportunities to enhance risk-adjusted, real returns. Given uncertainty in the equity and bond markets, a foundational allocation to global core real estate portfolio may be part of the solution.

We define the global core real estate foundation as a stabilised portfolio of well-located, well-leased properties in major markets around the world. It is foundational in that it can deliver the classic benefits of real estate: diversification against financial assets, steady income with some upside potential, lower-volatility returns, inflation sensitivity and downside resilience.

Historically, many investors have demonstrated a strong domestic bias in their allocations to core real estate — often in stark contrast to the

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