In today’s low-interest-rate and low-growth environment, global core real estate plays a crucial part in portfolios. With its predictable cash flows, it can act as a foundational asset class that delivers low-equity beta, high income and attractive liquidity.

Low-to-negative interest rates across the globe have stifled investors’ ability to generate sustainable yields from the public markets. We see this as an opportunity for high-quality global core real estate to serve as a relatively stable source of income. The total amount of global bonds with a negative yield surpassed $13 trillion in June 2019, and approximately 40 percent of all bonds globally are yielding less than 1 percent. In real estate, however, unlevered cap rates in global developed markets are still in the mid-single-digits range.

Although some believe developed-market real estate is becoming richly valued, it is important to view this in the context of the broader universe of available investments