As bank lending tightens on the heels of rising interest rates and recession fears, more institutional investors are looking to opportunities in commercial real estate debt lending as a means for generating income. Globally, what should they understand about this space, and where can they find the best opportunities?
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Commercial real estate private credit is a proven investment strategy uniquely positioned to provide reliable income, attractive risk-adjusted returns and portfolio diversification. The asset class can also provide a strong hedge against inflation, acting as a defensive safe haven in the current market conditions.
Through the global financial crisis and the COVID-19 pandemic, both out of a clear blue sky, real estate has not obviously offered diversification benefits to global investors. In fact, real estate has been at the epicentre of both 21st century shocks.
Flood risk assessment is an important and growing concern for real asset investors. But measuring the threat of flooding to assets and locations is stuck at an embryonic stage and faces challenges stemming from limited historical data as well as data incompatibility. This makes translating scientific analysis into reliable inputs complex. And it leaves investors struggling to properly factor in flood risk to support investment decision making.
In 2009, Geoff Colvin, an award-winning author and business writer for Fortune magazine, published a book titled The Upside of the Downturn. His chapter on risk was particularly enlightening and probably just as applicable to what’s going on today as it was to what was going on then in the wake of the global financial crisis.
Singapore-based SC Capital Partners (SCCP) has formed a consortium with a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) and Goldman Sachs Asset Management that has acquired a portfolio of 27 resort hotels in Japan from Daiwa House Industry for approximately US$900 million.
Given the structural tailwinds and expected relative outperformance for the logistics and data centre sectors over the mid to long term, will any traditional or alternative real estate sectors be able to provide similar risk-adjusted returns going forwards? If so, which sectors are the most promising and why? How should investors view and play these sectors?
Asia Pacific office occupiers are grappling with the complexities of the hybrid work model as they attempt to strike a balance between providing employees with desired flexibility and realigning their portfolios for the next evolution of the workplace, according to Colliers’ Global Occupier Outlook 2023, released in July.