Publications

- July 1, 2022: Vol. 16, Number 7

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Real estate less exposed to effects of deglobalisation

by Marek Handzel

Real estate investments may be better protected from the negative financial effects of deglobalisation than other major asset classes. In a recent blog post, Bryan Reid, research executive director for MSCI Research, and Oleg Ruban, head of analytics applied research for Asia Pacific at MSCI, have argued that institutional real estate investors have less exposure to countries that are vulnerable to the risk of decoupling that may arise due to deglobalisation.

Reid and Ruban write that political populism, the COVID-19 crisis and increased geopolitical tensions have all contributed to concerns about deglobalisation. Business cycles may become desynchronized around the globe, leading to wider variations in the performance of financial markets across countries due to lower correlation and higher levels of volatility. In the case of the equities market, it seems that interaction between countries and regional blocs have already declined.

As a result, global investors in bon

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