CBRE IM: The stage is set for opportunities

This article is sponsored by CBRE Investment Management.

What were your firm’s key events in 2022?

2022 was a bit of a roller coaster in terms of the macroeconomic environment’s impact on real estate. But I believe it was also an extremely successful year for our business and the performance we generated for our clients.

A key milestone was onboarding a large $3 billion Singaporean mandate, which included both global indirect holdings and Singapore direct holdings. It illustrated the best of what our platform can do for clients across the real estate spectrum.

Additionally, we closed our Global Special Situations Fund with equity commitments totaling $599 million. This fund is designed to take advantage of inefficiencies in capital markets and create unique opportunities for our investors through recapitalizations and GP-led secondaries.

2022 was understandably a difficult year for capital raising given market uncertainty, but we were successful in attracting $4.2 billion of capital into the indirect strategy, which was our second-largest capital raising since inception.

We also made continued progress in sustainability, and for the third year in a row our firm submitted the most portfolios of any commercial real estate fund manager to the GRESB Real Estate Benchmark Assessment.

What has the operating environment been like, and what were the challenges?

It was a year of two halves. At the start of the year there was real optimism because we were coming out of the pandemic and capital markets were strong. But that changed with the war in Ukraine, which made investments in Europe difficult and sent inflationary shocks throughout the rest of the world. This resulted in central banks raising interest rates on a co-ordinated basis to control inflation, and as a result we have seen a shutdown in capital markets.

Early 2022 we lowered the leverage in our portfolios, started making sales in sectors we thought would be more vulnerable in a downturn, and reduced our development exposure. We also curtailed our transaction activity in H2 2022 and only proceeded with high-quality investment opportunities in resilient sectors that are driven by structural demographic trends and where, due to market dislocation and the liquidity needs of others, we were able to enter at a repriced entry basis.

Who or what is responsible for your success?

Being part of the CBRE platform, CBRE IM has a unique global footprint with access to investment professionals on the ground everywhere we invest. This gives us an information, execution and sourcing advantage that enables us to identify attractive opportunities.

Our Indirect team has strong execution capabilities that span a wide range of investment structures – investing in not only funds but also programmatic ventures, joint ventures, recapitalizations and secondaries. This allows us to be nimble and access the best real estate within a specific theme we are targeting. Next to this, we have long-standing relationships with our operating partner network globally.

Finally, but most importantly, we have strong partnership-like relationships with our clients who have supported the platform and are key to our success. Given the volatile market conditions, we engaged in frequent communication with our clients to provide real-time intelligence.