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Inflation

Sustainability is now firmly entrenched as a key driver of value for real estate portfolios, says Partners Group’s Peter Holden
The New York mega-manager has focused its property investments in key thematic sectors to navigate the choppy waters ahead.
Having determined they are largely unscathed by the Russia-Ukraine conflict, institutional real estate managers and investors returning to Cannes spent the week looking beyond to the wider implications.
Inflation hedging depends on the ability to grow rents and, in turn, income, says Brad Gries, co-head and co-CIO, Americas at LaSalle Investment Management.
Residential real estate is traditionally resilient in times of high inflation, making it an attractive asset class to institutional investors, says James Jacobs, head of real estate for Lazard’s private capital advisory group
An increase in exit cap rates and cost of debt – as well as operating costs rising faster than rental rates – were among potential inflation-driven challenges cited by managers.
PERE Asia Summit 2021
The topic is top of mind for the region’s investors and has raised concerns that property markets abroad may have become too expensive.
While rising prices are a top concern for global investors, the asset class is well insulated from inflation’s negative effects.
Historically, real estate has performed well when prices rise, but the pandemic era raises unique questions and challenges.
Inflation fears are back but mitigating forces should not be underestimated, says Jose Luis Pellicer, head of investment strategy and research at M&G Real Estate.
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