The four quadrants approach: Now is the time for Asia Pacific investors to diversify their commercial real estate allocation
Investors have long sought real estate for price appreciation, inflation protection and diversification.
There are a variety of ways for investors to access real estate, including private, direct investment in brick-and-mortar properties; debt investments backed by real estate; publicly traded REITs and securities; and securitised fixed-income instruments, such as residential mortgage–backed securities and commercial mortgage–backed securities. Arguably, the most optimal method is to combine these approaches’ complementary benefits by following the “four quadrants” approach.
The commercial real estate sector is currently facing a range of downside risks stemming from rising interest rates, ongoing property market adjustments, and softer fundraising conditions. Because of this, CBRE recommends looking further into the four quadrants of commercial real estate investment.
The four quadrants approach involves four primary investment conduits through which