【亞太房地產(chǎn)協(xié)會】英文：2024年亞太不動產(chǎn)領(lǐng)袖大會會議要點報告：全球不動產(chǎn)新秩序

Conference

Takeaways

fromthe

AsiaPacific

RealAssets

Leaders,

Congress2024

ANEWGLOBALORDER

AsiaPacificRealAssetsLeaders’Congress2024

INTRODUCTION

Thisyear’sthemefortheLeaders’Congress,“A

NewGlobalOrderforRealAssets,”resonateswithmacroeconomictrends,includingpeakinginflationandtheanticipatedcutsininterestrates.A

renewedsenseofoptimismisemerginginAsia,especiallyaskeyeconomieslikeIndia,JapanandChinaalignforgrowth.

“Asiaisnolongerahiddengem.Moreinstitutionalglobalinvestorsareinvestinginthispartofthe

world,”SigridZialcita,CEOatAsiaPacificReal

AssetsAssociationsaidinherwelcomeremarksattheconferenceheldinTokyo.Asia’sstructural

growthstoryremainsintact,shenoted,

highlightingtheexpandingmiddleclassand

infrastructureneedsaskeydrivers.Low-carbontransitionanddigitaldisruptiontrendsarealsoopeningupnewinvestmentavenues,shesaid.

SigridZialcita

JohnLim,ChairmanatAPREA,alsosharedhis

optimismreflectingontheevolutionofinterest

ratesandmarketdynamicsoverthepastyear.HenotedthattheFederalReserveloweringrates

wouldspurinvestmentactivity.Limhighlighted

thesignificantimpactofU.S.monetarypolicyonAsianmarkets,particularlyforREITs,whichare

likelytogaintractionasvaluationsrecover.

However,healsopointedoutchallengesinthe

region,suchasslowergrowthinChinaandamorecomplexriskenvironment,whichhaveledtomorecautiouscapitaldeployment.WhilecapitalizationratesinAsiaPacifichavelargelystabilized,

signallingstrongerfundamentals,theprospectsformajorrepricingremainlimited.InvestorsareavoidingChina,insteadfocusingonopportunitiesinJapanandIndia.

JohnLim

AsiaPacificRealAssetsLeaders’Congress2024

“RealassetsintheAsiaPacificremainstrategicallypositionedforinvestorslookingtocapitaliseon

theregion’sgrowthpotential,butwithinahighlydivergentenvironment,”Limremarked.“Each

countryhasitsownmarketfundamentalsandtheimpactoftheFed’sinterestratepolicywon’tliftallboats.”

InChina,recentgovernmentstimulusmeasureshavebeenwelcomed,althoughsustainable

growthremainsakeyconcern.Theinfrastructuresector,inparticular,presentsuntappedpotential,withinvestmentsincreasinglydrivenby

technologyandsustainabilitytrends.

YosukeTsutsumi

Inhiskeynoteaddress,YosukeTsutsumi,AssistantVice-MinisterforConstruction,Engineeringand

RealEstateattheMinistryofLand,Infrastructure,TransportandTourism,highlightedJapan's

ongoingeconomicgrowthafteraprolonged

periodofdeflation.Hepointedtothepromisinglandscapeforrealestateinvestments,offering

insightsintolandpricetrendsinmajorcitieslikeTokyo,OsakaandNagoya,whichhavereboundedfrompandemic-relateddeclines.Theofficeand

condominiummarketsarealsoexperiencing

favorablemarketconditionsforinvestment.Thetourismsectorisalsobooming,withexpectationsforarecordnumberofforeignvisitorsand

increasedhotelconstruction,drivenbyJapan'sgoalofattracting60milliontouristsby2030.Additionally,thelogisticsmarketisexpandingrapidlyduetothegrowthofe-commerce.

J-REITs(JapanRealEstateInvestmentTrusts)offerstablereturnswithyieldshigherthanthosein

othercountries.Tsutsumiconcludedbyoutliningthegovernment’sgoaltoincreaserealestate

securitizationto40trillionyenby2030,reinforcingJapan'spositionasanattractiveinvestment

destination.

AsiaPacificRealAssetsLeaders’Congress2024

KEYNOTEPRESENTATION

JapaneseRealEstateInvestmentIndustry

ThekeynotepresentationbyTakahiroUchida,CEOofKenedixAsia,exploredtheevolutionofJapan'srealestateinvestmentindustryoverthepast25yearsanditstrajectorymovingforward.Keysectors,includingJ-REITsandprivaterealestatefunds,havematured,withsignificantgrowthattributedto

diversifiedcapitalsourcesandstabledemand.Theindustryhasalsoseentheemergenceofinnovativeassetclassesliketokenizedrealestate,reflectingtheevolvingneedsofsophisticatedinvestorsandthebroadershifttowarddigitaltransformation.

AccordingtoUchida,Japan'srealestatemarketcontinuestoattractdomesticandinternational

investors,drawnbyitssolidfundamentalsandgrowingopportunitiesinsectorslikesingle-family

residences,logistics,andhospitality.Internationalplayers,includingsovereignwealthfundsand

institutionalinvestors,areincreasinglyactive,complementingdomesticcapitalflows.Challenges

remain,suchasnavigatingmarketmaturity,enhancingliquidity,andfosteringESG-driveninvestmentstrategies,butthesealsopresentopportunitiesforfurtherinnovation.

Lookingahead,thepresentationemphasizedtheimportanceofadaptabilityandforward-thinkinginaddressingindustrychallenges.Integratingdigitaltools,creatingsustainablebusinessmodels,and

expandingaccesstoindividualinvestorsarekeytodrivinggrowth.Withtheriseofcross-border

transactionsandafocusondeliveringstablereturns,Japan'srealestateindustryispoisedtoremainadynamicandintegralpartoftheglobalmarket.

TakahiroUchida

AsiaPacificRealAssetsLeaders’Congress2024

PANELSESSION1

RealEstateReimagined:What’sNext

TheconferencekickedoffwithadiscussiononthegrowingsignificanceoftheAsiaPacificregionasakeydiversificationtoolforglobalinvestors.Whileyear-to-datetransactionsintheregionremain

lowerthaninpreviousyears,theofficemarketsinJapan,KoreaandIndiaareshowingdistincttrends.Notably,thesemarketsareseeingagreaterreturntoin-officeworkcomparedtotheremotework

trendsprevalentintheU.S.andEurope.The

region’sresilienceduringeconomicdownturnswasalsohighlighted.

“APACiscomingofageforglobalinvestors.WhileJapanandAustraliahavebeenkeymarkets,Indiaisnowgainingattention,”saidAmitDiwan,

CountryHeadofIndiaatHines.“InvestinginIndiaoffersexposuretostrongstructuraltailwinds,butdeeplocalexpertiseandtheabilitytoexecuteattheassetlevelarecrucial.”

ModeratedbyThomasMorizetofMSCI,thepaneldiscussionemphasizedthegrowingimportanceoftheregion,withJapanandIndiabecoming

increasinglyattractiveduetotheirstrong

economicgrowthanddiversificationpotential.Thehospitalitysectorisevolving,withanincreased

focusonwellnessanduniqueexperiences.

Additionally,Japan’sresidentialmarketisviewedasastableandattractiveinvestmentoption.

Environmental,socialandgovernance(ESG)

factorsareplayingamoreprominentrole,with

investorsincreasinglywillingtopayapremiumforsustainableassetsandpractices.Otheremergingsectorsincludedatacentres,lifesciencesand

seniorhousing.Panelistsstressedtheimportanceofadaptingandreimaginingrealestatestrategiestorespondtoevolvingmarketconditions,notingthattheabilitytorepurposeassetsisbecomingincreasinglycrucial.

AsiaPacificRealAssetsLeaders’Congress2024

“Weareseeingthehotelificationoftheoffice

market,retailevolvingwithentertainmentand

residentialnowfocusedoncommunitybuilding.Anactivemanagementstrategyiskey,”saidNeelRaheja,GroupPresidentatKRahejaCorp.

India,inparticular,isnotedforofferingsomeofthehighestunleveredinternalratesofreturn

globally,withstrongdemandforREITsandarobustdomesticmarketsupportingliquidity.However,AnishRaiatRMZRealEstatepointedoutthat,whileIndia’sofficesectorisbooming,geopoliticalrisksandeducationalgapsin

technologycouldposechallenges.

RussellWeeatJeanYipDevelopmentsandJamesOngatTPCemphasizedtheimportanceof

proactiveassetmanagement,particularlyin

hospitality.Ongdiscussedhowwellnessisbeingintegratedintohotelexperiences,notingthathiscompanyoperatesnotjustasahotel,butasa

wellnessschool,offeringmedicalcheck-upsandtailoredwellnessprograms.Wee,ontheotherhand,sharedamorecost-effectiveapproach,

focusingonlow-costwellnessoptionswithoutextensiveservices.Despitetheirdivergent

strategies,bothacknowledgedtheincreasing

demandforwellness-orientedexperiencesamongconsumers.

AsiaPacificRealAssetsLeaders’Congress2024

PANELSESSION2

DataCentresintheAgeofAI

Thenextpaneldiscussionshiftedfocustothe

rapidlyevolvingdata-centreindustry,wheretheimpactofAI,investmentstrategiesandtechnicalchallengeswerecentralthemes.Akeytakeawayfromthepanelwastheexplosivegrowthin

demandfordatacentresdrivenbyAI.ThisAI-

drivenexpansioncouldoutpacetheinfrastructureoftraditionaldatacentres,withpowersupply

becomingalimitingfactorincertainmarkets.

“Datacentresareridingonamegatrendwith

strongtailwinds.Theyarerecession-proofandinvestorsareeagerforexposureand

diversificationwithstablereturns,”saidMichelleLee,ManagingDirector,PrivateFunds(Data

Centre)atCapitaLandInvestment.

DiarmidMassey,CEO,DataCentresatESR,notedthattheconstructionofdatacentresmayslowinsaturatedmarketsandshifttosecondarymarketsthatarelessconstrainedbypowersupply.WhileAIisasignificantdriverofthisdemand,the

growthofcloudanddigitaltransformationalso

contributestothesector’sexpansion.AsAI-drivendatacentresbecomelargerandmoreexpensive,theneedforfunding,specializedinvestmentfundsandpartnershipsisrising.

TheshifttowardsAI-drivendatacentresis

increasingconstructioncosts,mainlyduetothe

needforadvancedcoolingsolutionssuchasliquidcoolingovertraditionalaircoolingandthehigherdensityofracksandservers.Severalcompanies

areworkingtowardscarbonneutralityby2030,

aimingtopowertheirdatacentreswithrenewableenergy.Still,challengesremaininensuring

consistentpowersupplyasrenewablesourceslikesolarareintermittent.

“Thegenieisoutofthebottle.AIisgoingtogrowbutitisasupportingelementtothedigitalmarketthat’salreadythere,”saidAlistairLaBrooy,DirectoratAREARealEstateAdvisorySdnBhd.

AsiaPacificRealAssetsLeaders’Congress2024

PANELSESSION3

FromResiliencetoReinvention:LogisticsandWarehouses

Thethirdpanelturnedtothelogisticsand

warehousingindustryintheregion,notinghowthesectorhasevolvedsincethepandemic.Theshifttowardshomedeliveryserviceshasdrivenincreaseddemandforwarehousing,while

traditionalofficespaceshavefaceddeclines.

JoeGagnon,PartneratHillhouseandCo-HeadofRealAssetsatRavaPartners,emphasizedthe

compellinginvestmentopportunitiesinthe

warehousingsector.Hepointedouttheongoinggrowthofe-commerceandtechnology,which

continuetodrivedemandformodern

warehousingsolutions.Althoughdemandvaries

bymarket,mostregionsareunder-supplied

comparedtotheirdevelopedcounterparts,

presentingsubstantialopportunitiesfor

development.WhilemarketslikeAustraliaare

experiencingaslowdown,regionssuchasIndia

arewitnessingaboom.Conversely,GagnonnotedChina’schallengesinlower-tiercitiesbutthelong-termoutlookremainsoptimistic.

“Investorsarefocusingmoreonlogisticsthanonindustrial,butthat’sshort-sighted,”saidGagnon.“Ifyou'reactiveindevelopingAsia,Ibelievecapratesforindustrialshouldbelowerthan

logistics—thiswouldradicallyopposethethinkingofmostinvestors.”GagnonidentifiedChinaasthebestinvestmentopportunityintheregionat

present.

AnshulSinghal,ManagingDirectoratWelspun

One,spokeontheriseofe-commerceinIndia,

highlightingtheemergenceof“quickcommerce,”whereconsumersdemanddeliverieswithin10to20minutes.Thisillustratestherapidevolutionofconsumerbehaviourintheregion.

AsiaPacificRealAssetsLeaders’Congress2024

AnishSanghvi,PartneratPwCIndia,discussedtheevolutionofinvestmentstructuresinIndia,notingthatwhileentryandexitstrategiescanstillbe

complex,theregulatoryenvironmenthasbecomemoreliberalized,makingtransactionseasier.

KatsuyukiVictorMineta,CEOatKICHoldingsInc.,offeredinsightsonJapan’slogisticsmarket,whichhasmaturedoverthepasttwodecades.HenotedthatGreaterTokyoiscurrentlyfacingan

oversupplyoflogisticsspace.However,thereisrisingdemandforcoldstorage,drivenby

demographicchangesandanagingpopulation.MinetaalsoidentifiedpotentialinAgriTechandhybridfacilitiescombiningwarehousingand

agriculturalresearch.

ModeratedbyShobhitAgarwal,CEOatANAROCKCapitalAdvisors,thepanelfurtherexploredthe

typesofoccupiersdrivingdemandinthelogisticssector.Gagnonhighlightedtheincreasing

importanceofmanufacturing,particularly

assemblyandtestingcomparedtotraditional

heavyindustries.Thisshiftiscreatingnew

opportunitiesforinvestorswhocanadapttothechanginglandscape.

Thediscussionalsotouchedontechnologicalinnovationsinwarehousing,includingroboticsandautomatedrackingsystemsthathave

revolutionizedwarehouseoperations.However,labourissuesandrisingconstructioncostswerenotedassignificantconcernsimpacting

investmentreturns.

AsiaPacificRealAssetsLeaders’Congress2024

PANELSESSION4

UnlockingGrowthofAsiaPacificREITs

ThenextsessionfocusedonJapan'sRealEstate

InvestmentTrustmarketanditsgrowingappealtoinvestors,particularlyinlightofcurrenttrendsinyieldspreadsandrisinginterestrates.While

challengesexistduetohigherrates,some

panelistsbelievethatrentalgrowthandinflation-linkedcontractswillcontinuetosupportthe

attractivenessofJapan’sREITs.

“Ratesareincreasingbutwon’trisetolevelsseenintheU.S.orEurope,”saidYumaKawatsuji,

PresidentatGLPJapanAdvisorsInc.The

inflationaryenvironmentispositiveforlogisticsREITsasthereisroomtoincreaserents.Costsarerising,butnotasmuchasrents.

ThediscussionturnedtoJapan'sofficemarket,

whichremainsresilientdespiteglobaltrends,withstrongdemandforofficespacedrivenbyculturalfactorsandlabourshortages.Thishasresultedinsteadyrentalgrowth,contrastingwiththemorenegativesentimentseeninmarketsliketheU.S.Inaddition,privateJ-REITsarerapidlygaining

popularityamonginstitutionalinvestorsduetotheirstabledividendsandlowervolatility.

However,concernsaboutproductdiversification,marketsizeandachievingeconomiesofscale

wereraised.

AsiaPacificRealAssetsLeaders’Congress2024

Whenitcomestointernationalexpansion,

SingaporehasestablisheditselfasaglobalREITplatformwhileJapaneseREITsprimarilyinvest

domestically,reflectingamoreconservative

investorapproach.OnlyahandfulofJapanese

REITsholdoverseasassets.ThiscautiousstancecontrastswithSingapore’smoreaggressive

strategy,positioningitselfasacomplementary

platformforAsiansponsorsseekinginternationalgrowth.SingaporeanREITsarealsoadaptingbydiversifyingintonewassetclassesandco-

investingindevelopmentstomanagerising

constructioncosts,accordingtoRonaldTanat

SingaporeExchange.Thisflexibilityhelpscapturegrowthopportunitiesdespiteeconomic

challenges.

Whilerisinginterestratescouldshrinkyield

spreads,thereisageneralconsensusthatthe

marketcancontinuetobenefitfromleverageforsometime.Thereisalsoanoticeableshiftin

investorpreferences,withamovetowardsmorevariableincomeexpectationsinresponseto

inflationandincreasingrates.

“There’saninflectionpointcominginJapanwithinflationreturning,”saidNaokiSuzuki,CEOatKJRManagement.“TheoldstyleofREITmanagementfocussingondividendpayments—suchfundswilldieatsomestage.Growthofcashflowand

incomeisbecomingequallyimportant.”

AsiaPacificRealAssetsLeaders’Congress2024

PANELSESSION5

SecurityTokenOfferings:ANewFrontier

Thediscussionthenmovedtosecurity

tokenization,anewfrontierinrealestate

investmentthatleveragesblockchaintechnologyandfractionalownership.Thesessionincluded

panelistsAkihiroNakao,ExecutiveOfficer,HeadofDigitalSecuritizationDepartment,Kenedix,Inc.;

KimioMikazuki,RepresentativeDirectorand

President,OsakaDigitalExchangeCo.,Ltd.;

RyosukeIshizuka,HeadofRealEstate&REIT

SectorCorporateFinanceDept.4,Nomura

SecuritiesCo.,Ltd.;ToshinoriSasaki,CEO,

BOOSTRYCo.,Ltd.;withGoMasuda,Chairman,JapanSecurityTokenAssociationasmoderator.

Realestatetokenizationisexpectedtoreach$16trillionby2030,upfromjust$2.7billionin2022.InJapan,thecumulativeissuanceoftokenshas

alreadyexceeded140billionyen.

Accordingtopanelists,securitytokensinJapan

arepredominantlyrealestate-backedsecurities

andcorporatebondstargetingretailinvestors.

Thesetokensprovideabalancedmixofrealestateandfinancialization,offeringmorepricestabilitycomparedtoJ-REITs,whichcanbemorevolatile.Whilethetokenizationmarketisstillinitsearly

stages,thereisaneedforinvestoreducationtounlockitsfullpotential.

AsiaPacificRealAssetsLeaders’Congress2024

KEYNOTEPRESENTATION:

Future-proofingRealAssetsInvestmentsinChallengingClimate

EstherAn,ChiefSustainabilityOfficeratCityDevelopmentsLtd.,deliveredakeynoteonthebuildingindustry’scriticalroleinaddressingclimatechange.Thesectorproducesaround40%ofglobal

emissions,withcitiescontributing75%ofcarbonemissions.Retrofittingbuildingstoimproveefficiencyisessential,especiallysince70%oftoday’sstructureswillstillbeinuseby2050.

“Companiesandinvestorsgloballyaremotivatedbytheracetonet-zero,whichrequirestrillionsingreeninvestments,”shesaid.“Anestimated$3trillionoffinancingisneededannuallytohelptheregionreachnet-zeroby2050.”

Sheemphasisedtheimportanceforcompaniestomobilisecapitaltofuture-proofrealassetsinvestments,securingreturnsforlong-termbusinessresilience.

EstherAn

AsiaPacificRealAssetsLeaders’Congress2024

PANELSESSION6

TheFutureofLiving

ThenextpanelshiftedtoJapan’sresidential

market,focusingonthestrengthsofJapan's

multifamilysector,tenantpreferencespost-

pandemicandinvestmentstrategies.AlthoughJapanfacesdemographicchallengessuchasadecliningbirthrate,citieslikeTokyoandOsakaareexperiencingnetpositivemigration,

supportingastablerentalmarket.Urban

populationgrowthisexpectedtosustainrentaldemandespeciallyforwell-located,high-qualityproperties,saidTakuyaYamada,Chairmanat

IDERACapitalManagementLtd.Largerunitsarepopularamongdual-incomecouples,hesaid.

InvestorsinTokyoandotherlargecitiesreport

highoccupancyratesandrelativelyaffordable

financingratescomparedtoglobalmarkets,

makingJapanattractiveevenamidrisinginterestrates.Whilehomeprice-to-incomeratiosarehighinmanycountries,Japan’srentalmarketbenefitsfromstability,anestablishedassetmanagementsectorandlowerdevelopmentriskscomparedtomarketsliketheU.K.andAustralia.

AsiaPacificRealAssetsLeaders’Congress2024

"Despiterisinginterestrates,Japan'smultifamilysectorremainsattractiveduetoitshealthyyieldspreadsandlowerbarrierstoentryascomparedtoofficeassets.Smallerticketsizesandastablerentalmarketmakeitanaccessibleinvestmentassetclass,"saidGeraldYong,ChiefInvestmentOfficeratCityDevelopmentsLimited(CDL).

Post-pandemic,urbanlivinghassurgedwith

increasingdemandforsmaller,centrallylocatedunitsinTokyo,saidKatsuhikoHirota,managingpartneratAlyssaPartners.Amenitieslikehigh-

speedWi-Fiarebecomingmorecrucialastenantexpectationsevolve.

CapratesinJapanremainrelativelystabledespiterisinginterestrates,partlyduetoincreased

constructioncostsandsustaineddemandfor

primerentalproperties.Investorscontinueto

prioritizelocationandproximitytotransport,withsomemovingintoouter-cityareastoacquire

assetswithgrowthpotential.Despitethe

challengesposedbyrisinginterestrates,Japan’sresidentialcapratesareexpectedtoremainstableorevendecreaseforhigh-qualityproperties.

Limitednewsupply,stronginvestordemandandexpectationsofrentalgrowthallcontributeto

keepingcaprateslow,especiallyforprimeassets.

AsiaPacificRealAssetsLeaders’Congress2024

PANELSESSION7

PrivateCredit:TheRiseofanAssetClass

Thediscussionmovedontotherapidlygrowing$2.1trillionprivatecreditmarket.Infrastructure

credit,whichrepresentsapproximately10%oftheglobalmarket,isexpandingatanimpressive

annualrateof25%.Thisgrowthisbeingdrivenbyfactorslikedigitalization,theenergytransitionandgovernmentbudgetconstraints.KeymarketsforinfrastructurecreditincludeNorthAmerica,

WesternEuropeandAustraliawithsignificantinvestmentsindatacentres,energy,

transportation,utilitiesandsocialinfrastructure.

Privateinfrastructurecreditisbecomingmore

attractiveasbankshavereducedtheirlendinginthisspacesincethe2008financialcrisis,creatingagapformiddle-marketinfrastructureprojectsthataretoosmallforlargebanks,saidMattDimond,ManagingDirectoratSIMCo.Yieldsinthehigheryieldinfrastructurecreditmarketcanrange

between9%and10.5%,offeringreturnssimilarto

equityinvestments.Althoughbaseratesmaywelldecreasefromtheirhighlevels,privatecredit

spreads(incorporatinganilliquiditypremium)areexpectedtoremainattractive,providingyield

cushioningforinvestors.

InIndia,theprivatecreditmarketisexperiencingrapidgrowth,fuelledbystrongconsumptionandinfrastructuredevelopment.Itoffersattractive

returns,rangingbetween16%and24%,

significantlyhigherthanbanklendingratesof8%to11%.AccordingtoRuchirSinhaatResolut

Partners,thissectorisfillingacriticalgapin

fundingforprojectsthatbanksareunwillingtofinance,particularlyduringthedevelopment

phase.Investor-friendlyreformsintroducedin

Indiasince2016haveimprovedtheinvestmentclimate,offeringequaltreatmenttobothforeignanddomesticlenders.

AsiaPacificRealAssetsLeaders’Congress2024

ThepanelistsalsodiscussedthevaryingdynamicsofprivatecreditacrossAsianmarkets.InJapan,

however,bankloansdominate,aslowstructuringcostsandlargebankreservesmakeprivatecreditlesscommon,notedTakashiImanagaatMizuhoBankLtd.InChina,althoughthereisn’taformal

“privatecredit”sector,privatedebtgrowthinrealestatewassubstantialthrough“shadowbanking”andtrustcompanies,particularlyuntil2017.

Followingnewregulationsthatrestrictprivate

equityfundsfromdirectlending,therehasbeenashifttowarddebt-financedmergersand

acquisitionsandstructuredsecuritiesinvestments.AccordingtoKongLingyi,CIOatSCGCRealty

Capital,theChineseeconomyisshowingsignsofrecovery,supportedbygovernmentstimulus

aimedatstabilizingsectorssuchasrealestate,creatingpotentialopportunitiesforacquisitions.

“Ithinkmezzaninefinancingandprivatecredit

strategiesareidealfortoday’sChina,”saidLingyi.Whileequityinvestmentsmaybeuncertain,

leveragingbuyoutsormezzaninefinancefor

acquisitionscanstillyieldIRRsof12%to15%,shesaid.

Fromaninvestmentperspective,thepanelists

emphasizedthebenefitsofblendingcreditwithequityinportfolios.Creditoffersstableincomeandcapitalpreservation,whileequityprovideshigherpotentialreturnswhenmarketconditionsarefavourable.Followingthepandemic,rising

interestrateshavemadecreditparticularly

attractive,withreturnsonloansbetween8%and10%,incontrasttothenegativeleverage

challengesfacedbyequityinvestments.Craig

Oram,FundManageratLaSalleInvestment

Management,highlightedthecomplementarynatureofdebtandequity,ascombiningthetwo

canmaximizebothincomestabilityandgrowth

potential.Asinterestratesareexpectedto

stabilize,thepanelistsanticipateprivatecredit,

especiallyininfrastructure,toremainanattractiveinvestmentduetoitsresilienceandlowerdefaultrates.

AsiaPacificRealAssetsLeaders’Congress2024

PANELSESSION8

TheRoadAhead:GlobalInvestors’Views

Thefinalpanelofthedayofferedaforward-

lookingdiscussionontherealassetmarket,withafocusontheoutlookforthenext12to18months.Theglobaleconomiclandscapeshowsvaried

trajectorieswithIndiaemergingasabrightspotinAsia-Pacific,drivenbystronggrowth.Incontrast,Chinaisfocusingonstimuluseffortstostabilizeitseconomyamidstarealestatedownturn.Japanisseeingacashinflowintoriskierassetswhichcouldstimulategrowth.Whileinvestorsentiment

remainscautious,sectoralriskpremiumsnowdemandhigherreturns,thepanelistsnoted.

Highinterestratesandinflationpresent

favourableconditionsforoperators,providing

pricingpowerandpotentialforcashflowgrowthwhilemarketvolatilitycouldalsocreatenew

investmentopportunities.JosephineYip,

ManagingDirectoratIvanhoéCambridge(therealestateportfolioofCDPQ)mentionedthattheU.S.FederalReservecouldpotentiallyreachaneutralratebylate2025asinflationnearstargetlevels

andlabourmarketssoften.

“Thenewmarketenvironmentforcesustoseek

strategiesthatcreatepropertyvalue,inmarketsorassetswithstrongrentalgrowth,”Yipsaid.“WithinAPAC,weviewlogistics,livinganddatacentresassectorsthatofferthemostimmediate

opportunities.Westrivetobestrategicaswepreparefor2025tocontinuebuildingadiverseportfolioacrossallourgeographies.”

Thediscussionshiftedtoinvestmentstrategiesintoday’suncertaineconomicandgeopolitical

environmentwithkeythemesincludinginterestrates,sectordiversificationandgeographical

preferences.U.S.investors,facedwithlower

funding