- Global real estate markets are evolving, and investors must adapt to new trends and opportunities. These include shifting towards value-added and opportunistic investments and repositioning buildings to be more sustainable and environmentally friendly.
- In the current climate, logistics and private credit are two focus areas for real estate investors. The pandemic has increased demand for logistical space, while private credit offers new opportunities for generating portfolio yield.
- Investors must consider macroeconomic factors when choosing where to invest. For example, the US multifamily and industrial sectors are expected to face headwinds in the near future due to inflation and other factors.
- Smaller and mid-cap real estate deals can offer alpha opportunities for investors, particularly as larger institutions are restructuring.
- Technology and data science are becoming increasingly important in real estate investing. These tools can help investors identify new opportunities and make more informed decisions about where to allocate their capital.
The session "Global Real Estate and Private Equity: Investing in an Evolving Landscape" brought together some of the leading figures in the real estate and private equity sectors to discuss the current state and future trends of real estate investments.
Moderator Hala Bou Alwan kicked off the discussion by highlighting the strength of the real estate landscape in the UAE, which has proven to be a stable economy despite tightening monetary policies and rising interest rates. The UAE has also implemented regulations to attract investors and wealthy individuals, making it an attractive location for investment.
Michael Campbell, Head of Real Estate Investments at Mubadala, spoke about the impact of geopolitical issues on real estate investments and how Mubadala focused on logistics and private credit in the pre-COVID era. With the pandemic leading to a significant impact on supply chains, there is now a need for new logistical spaces to meet demand. Mubadala has also shifted its focus from lending to cash flow properties to transitional opportunities.
Erik Kaas, Chairman of Europe & Partner at Partners Group, highlighted the impact of rising interest rates on real estate investments. As interest rates increase, investors have less money to invest in real estate, which leads to more government breaks for investors and opportunities for buying assets. The strategy for investing in real estate has shifted globally towards value-added and opportunistic investments, such as distressed sellers, repositioning buildings, and investing in green buildings and ESG.
Margaret Anadu, Senior Partner at The Vistria Group, spoke about the real estate landscape in the US and the need to work harder on two of the darling industries: multifamily and industrial. With inflation on the rise, there will be a big spread in terms of asset classes in the US, and investing in lower-cost residential units will help to correct the supply vs. demand imbalance.
Ryan Williams, Founder and Executive Chairman of Cadre focused on the importance of hyperlocal markets and sectors and the use of technology, data science, and relationships to bring growth opportunities to investors. He also emphasized the potential for alpha in mid-cap real estate deals with $10-15 million of equity, as large institutions are currently frozen due to restructuring.
Overall, the speakers agreed that real estate investments must be resilient in changing geopolitical and economic landscapes. There are opportunities for value-added and opportunistic investments in logistics, green buildings, and life sciences. Investors can find growth opportunities in an evolving real estate landscape by focusing on hyperlocal markets and sectors and utilizing technology and data science.