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[vc_media_type_category]The coronavirus pandemic has impacted the way we work and live in unprecedented ways that are impacting how we consume. These thematics – including the increased use of technology, working from home, and online shopping – are acute in the real estate sector. This session will examine what this means for the asset class opportunities and risks as well as learnings for the whole portfolio. How investors can best combine listed and unlisted opportunities, and balance liquidity, will also be considered.[vc_quotes layout=”accordion” 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title=”Speaker” el_class=””][vc_quotes layout=”accordion” 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title=”Moderator” el_class=””][vc_empty_space height=”10px”]
Key takeaways
Jon
Retail and office are only 25 per cent of the property market. Today, the property asset class has a material weighting to data centres and technology towers.
We have to deal with the fact that it’s a recession, so hotels for example will naturally be impacted.
Some aspects of property are being uniquely impacted, for example university housing which is normally a defensive asset.
There will certainly be some permanent destruction of the office opportunity, even though advocates of office investment believe physical offices provide benefit relating to talent concentration, culture and collaboration.
The property market, like an economy, is always evolving, with some parts becoming obsolete and some parts becoming more relevant.
Over a cycle, it is best to have a combination of both listed and unlisted property within a portfolio.
We will not necessarily witness a doom and gloom exodus from big cities, but there may be opportunity for decentralised models to be explored.
Jason
COVID has turbocharged changes that were already underway.
It’s too soon to predict the future fate of the office market.
Knowing how to adequately perform due diligence in this environment will be key.
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Poll results
Do you think the office real estate sector has been permanently disrupted?[vc_line_chart x_values=”” values=”%5B%7B%22title%22%3A%22Yes%20(72%25)%22%2C%22y_values%22%3A%2272%22%2C%22color%22%3A%22blue%22%7D%2C%7B%22title%22%3A%22No%20(16%25)%22%2C%22y_values%22%3A%2216%22%2C%22color%22%3A%22pink%22%7D%2C%7B%22title%22%3A%22Unsure%20(12%25)%22%2C%22y_values%22%3A%2212%22%2C%22color%22%3A%22juicy-pink%22%2C%22custom_color%22%3A%22%23f7be68%22%7D%5D”][vc_dfp_ad ad_embed_id=”/30578185/T1F/LEADERBOARD” display=”both” css_float=”none” bottom_margin=”1″]
The Florida State Board of Administration has made some strategic moves to take advantage of opportunities in the dislocation, including in private equity, distressed debt and active listed equities.. But CIO, Ash Williams, is concerned about the underlying real economy.
Investment opportunities in emerging markets include high yields on local government debt and cheap currencies, while China's Renminbi has proven its resilience and is now considered a safe asset currency according to chief economist at Pictet Asset Management, Patrick Zweifel.
The only solution to the problem of COVID-19 is a vaccination. Oxford University's Jenner Institute is one of the organization's racing to provide a vaccine, and it's director Adrian Hill believes the Institute could have cracked it by year-end.
Founder of SVPGlobal, Victor Khosla tells FIS 2020 delegates that although the opportunities in distressed debt are significant, investors should pick and choose. It's not like 2008.
Real estate is one of the asset classes hardest hit by the pandemic. Although FIS 2020 experts warn that some companies may never return to the office, opportunities are already appearing in smaller, regional hubs while listed real estate will recover quicker than private investments.
CEO of Franklin Templeton, Jenny Johnson, said asset managers need to do more, particularly in boosting diversity and inclusion in the underlying companies they own. She said the industry needed to do more to ensure capital is available to black-run and female-run businesses.
Current fiscal and monetary policies are taking the world down a necessary, but dangerous path, according to co-CIO of Bridgewater Greg Jensen. He told investors asset allocations should focus on diversification, and assets that benefit from fiscal and monetary policy moving together.
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