Real estate, infrastructure and the bigger picture
You might have noticed that the magazine has changed. And in more ways than one. The design has been revamped, and so has the name.
But while this might seem like a significant departure, the publication is still dedicated to the latest intelligence and analysis on global real estate, infrastructure and other forms of real assets – and on pension funds and other institutional investors active in these markets.
The change of name from IPE Real Estate to IPE Real Assets is a natural step. Rather than marking a shift in focus, it is an opportunity to communicate more clearly what we already do. In recent years, IPE Real Estate’s coverage has been steadily expanding into other forms of real assets – mirroring similar trends among investors and managers – and the new moniker more accurately reflects this.
As an institutional investment publication, it is counterintuitive to look at real estate in isolation and ignore the wider context, which includes how the asset class interacts with, and adjoins, similar markets. While real estate and infrastructure have for some time been seen as two distinct asset classes, they are share similar characteristics and in some cases the lines can be blurred. Take social infrastructure such as healthcare and social housing, for instance, and other forms of real estate that are tied to operational businesses.
This truth is also reflected in the growth of real assets mandates and allocations, and the rise of real assets umbrella organisations at investment management houses, in an attempt to bring different disciplines under one roof.
The trend continues. CBRE Global Investors and Charter Hall are the latest real estate investment managers seeking to expand into infrastructure. In the case of the former, most of the work has been done. CBRE Global Investors, which already has expertise in listed infrastructure investments, acquired Canadian private infrastructure specialist Caledon Capital Management earlier this year.
Australia’s Charter Hall, meanwhile, recently pulled out of negotiations to buy Hastings Funds Management, which owns global infrastructure assets, but continues to seek entry into the infrastructure asset class – and may do that by seeking to acquire parts of the Hastings business.
The first edition of IPE Real Assets leads with what is one of the biggest stories in the world of real assets at the moment: the opportunity in US infrastructure. A huge amount of institutional capital appears to be ready and willing to help improve the country’s – in many places crumbling – transport, water and energy systems, in exchange for long-term, secure income returns.
Securing more private-sector investment in infrastructure was also expected to be one of Donald Trump’s easier achievements in his first year as President. But while more details about this $1trn (€837.5bn) plan have been revealed, in the same week the White House scrapped plans to form an infrastructure advisory council. Two similar presidential panels, which had been expected to build consensus at the state and local level, were also shut down amid the scramble by American corporate leaders to distance themselves from Trump’s controversial remarks about demonstrations in Charlottesville, Virginia.
So the principal question seems to have shifted to: is there an unprecedented investment opportunity in US infrastructure despite – rather than because of – the Trump Administration?
This edition of IPE Real Assets also carries our annual Top 100 survey of global infrastructure investors, ranking the largest pension funds, insurers, sovereign wealth funds and other ‘capital owners’ with allocations to the asset class.
Combined, these provide a great opportunity to reinforce the growing significance of infrastructure in this publication. But it is also important to stress that real estate will remain a critical – if not the predominant – asset class in our coverage. It is – for the time being at least – the deepest and most mature of the real asset classes, and the largest from an asset allocation perspective.
Among other things, we look at the future of London offices – a market mired in Brexit uncertainty but buoyant thanks to a vibrant congregation of technology and media industries.
We also provide an update on real estate debt as an institutional sub-asset class. It is growing in Europe, the US and Australia as investors strive for new sources of income.