Continued momentum of global capital flows into real estate
Investors increasingly prioritise sustainability in investment strategies.
Against the backdrop of unusually blue skies in Davos this year, the sheer scale of technology disruption - to businesses, communities and cities - echoes throughout the conference. With it has come a clear focus on new and evolving business models, many of which are driven by technology, although this is far from the only catalyst.
Blackrock CEO Larry Fink’s recent commitment to make investment decisions with environmental sustainability as a core goal is a good case in point. Investors are becoming increasingly conscious of the social and environmental impact of their decisions. Clearly delivering on investor return expectations is the primary fiduciary responsibility for investment managers, but I sense a shift in perspective here that delivering on their broader sustainability ambitions need not compromise their returns - and that they should and can do both. Real estate has a huge role to play in delivering on sustainability ambitions for occupiers and investors alike. The good news is that technological innovations are enabling the industry to build and operate real estate more efficiently – delivering on sustainability goals while also driving down operating costs.
Many of the investors here have parts of their business focussed on real estate investing either directly or indirectly in equity or debt capital and it is now significantly more important in terms of their total allocations than in the past. My meetings here suggest that trend will continue. In contrast to the noticeably less multilateral world politically, capital allocators here are continuing to look to global allocation strategies for investing their capital.
CEO Capital Markets