Institutional property investors in any year must think long term, as the acquisition, development and disposition of large-scale real estate assets and portfolios is not the day-traders’ game. No matter how shrill the headlines, the institutional real estate player often can do little in troubled times but hunker down — or maybe even hunt for emergent opportunities.
From the Current Issue
The global office market is undergoing profound changes, driven by structural environmental, social, health and technology trends. There are discrepancies within and between global office markets, however, as can be seen from an examination by CBRE Investment Management of trends across six city case studies from London, Paris, New York, San Francisco, Sydney and Tokyo.
For real estate investors, Asia’s attractive economic growth performance over the past two decades has resulted in rising asset allocations. The relatively strong economic performance during the pandemic reinforces the argument that a balanced global portfolio should be making sizeable allocations to the region.
The global macroeconomic landscape has changed significantly in a few short years. The result is a need for a more nuanced framework to analyse real estate assets. Furthermore, a structure built on the fundamental utilisation of the space, rather than the traditional real estate asset class, enables investors to better understand the underlying risk exposures within a portfolio, and drive greater diversification.
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The global macroeconomic environment may provide challenges for real estate investors, but the underlying fundamentals for most property types will be supportive of investment in the sector, according to Stephen Hayes, head of global property securities at First Sentier Investors.
Following a steady flow of sales in 2020, corporate real estate disposals in Asia Pacific surged to record highs in 2021, with 762 deals worth a combined total of US$44.4 billion completed as sellers capitalised on strong pricing to offload assets, according to a May report from CBRE, What’s Next for Corporate Real Estate Monetisation in Asia Pacific?
Commercial transaction volumes in Asia Pacific hit US$53 billion in the first quarter of 2022, up 8 percent year-on-year, according to research from Knight Frank Asia Pacific released in May. South Korea, Singapore and Australia led the first-quarter momentum with an estimated 33 percent, 80 percent and 53 percent increase, respectively.
“Climate risk is the biggest disruptor to established cities,” writes Guy Grainger, global head of sustainability services and ESG at JLL, in the firm’s May 2022 report, Decarbonising Cities and Real Estate. The report identifies five key implications for real estate.