In dramatic fashion, the pandemic took the shine off traditional real estate sectors, such as hospitality, retail and, to a lesser extent, office. At the same time, it accelerated already-existing investor interest in logistics and data centres, which are expected to outperform in the medium to long term. Looking ahead, will any other traditional or niche real estate sectors be able to provide equally appealing risk-adjusted returns?
From the Current Issue
A year on from the start of the COVID-19 pandemic, investors are still as bullish about real estate as they were before the start of the outbreak. The results of the recent ANREV/INREV/PREA Investment Intentions Survey 2021 reaffirm the limited impact of the coronavirus on sentiment and, in effect, paints a picture of what would otherwise be a very ordinary year in terms of investment intentions.
We are starting to see, with some certainty, where life post-virus may head. That, in turn, is providing firmer ground for real estate investors. In the darkest days of the coronavirus pandemic, investors were frantically attempting to ascertain valuations based on cashflows that were shifting, fast. Real estate is prized as an asset class that will hold its value, but has it delivered, and where do values now stand?
The coronavirus has spared no part of the world. But as we move into year two of the pandemic, the situation appears set to stabilise. That should encourage infrastructure investors to take a more expansive view, after playing defence for so long.
It has been a year now since we produced a live face-to-face event, our VIP Europe programme, conducted at the Hotel Arts in Barcelona. One of our keynote speakers for that event was Chris Kutarna, an Oxford Adult Education professor and co-author of the bestselling nonfiction work, Age of Discovery. In the book, Kutarna draws parallels between what was going on during the Renaissance in Europe at the time of Michelangelo, and what is going on in our world today.
During the fourth quarter of 2020, 16 fund closings were recorded, representing an aggregate dollar volume of US$15.3 billion, according to Institutional Real Estate, Inc’s FundTracker. This is the lowest amount of fund closings since the second quarter of 2011’s 15 fund closings and the lowest fundraising dollar volume since the first quarter of 2013’s fundraise of US$8.1 billion.
BlackRock Real Assets has raised US$1.175 billion for its BlackRock Asia Property Fund V (AFV), surpassing its US$1 billion fundraising target despite market volatility created by the COVID-19 pandemic. AFV was backed by a diverse group of institutional investors across Europe, Asia and the Americas, including private pension funds, insurance companies, sovereign wealth funds, family offices and endowments.
Chinese investment in Australia fell by more than 61 percent in 2020, according to new data from the Chinese Investment in Australia Database (CHIIA) at The Australian National University. This follows a 47 percent drop in 2019, and is the lowest number recorded over the past six years.