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  1. BLOG

    Measuring Climate Risk in Real Estate Portfolios 

    Jul 8, 2020 Bryan Reid

    ESG Research , Real Estate Investing

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    By evaluating real estate portfolios in terms of different physical risks as well as under different transition-risk scenarios, investors may be able to build a more complete picture of their exposure.

  2. BLOG

    Real Estate Asset Selection Mattered — Especially in a Crisis 

    May 14, 2020 Bryan Reid

    Real Estate Investing

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    As real estate strategies become more complex and market disruption continues, attribution analysis may prove a valuable tool. We looked at asset selection’s role in driving portfolios’ relative returns during relatively calm and disruptive periods.

  3. BLOG

    How COVID-19 could impact private real estate values 

    Apr 20, 2020 Bryan Reid , Yang Liu

    Real Estate Investing

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    Real estate has not historically been immune to growth shocks, but the impact of COVID-19 has been harder to establish than it has for public equities. Discounted-cash-flow scenarios may help investors understand the potential sensitivity of their portfolios.

  4. BLOG

    What out-of-cycle write-downs may mean for real estate yields 

    Apr 3, 2020 Bryan Reid

    Real Estate Investing

    Learn More

    As real estate investors seek to understand how the COVID-19 crisis could affect their portfolios, several large Australian pension funds recently wrote down their property portfolios by up to 10%. What could a 10% write-down imply for yields?

  5. BLOG

    Real estate is about more than location during uncertain times 

    Mar 18, 2020 Niel Harmse

    Real Estate Investing

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    With real estate now occupying a greater slice of multi-asset-class portfolios, factors such as lease length, may be more systematic drivers of return than previously thought. 

  6. BLOG

    What’s driven capital growth in real estate portfolios? 

    Feb 6, 2020 Bryan Reid

    Real Estate Investing

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    In real estate investing, capital growth has historically been responsible for most of the observed volatility in total returns. Could breaking capital growth into its components help tell a more detailed story of property portfolios’ performance?

  7. BLOG

    2020 Emerging Real Estate Trends 

    Jan 16, 2020 Will Robson

    Real Estate Investing

    Learn More

    From managing climate risk to advances in analytics, 2020 may be a watershed year for real estate. Read our top five emerging trends likely to be front of mind for global real estate investors in 2020 and beyond

  8. BLOG

    Digging deeper into pan-European property funds’ performance 

    Nov 26, 2019 Will Robson

    Real Estate Investing

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    Property investors who invest across a broad region, like Europe, can use a peer-group benchmark to gauge relative performance. But to determine the specific drivers of returns, detailed asset-level performance attribution can help shed light.

  9. BLOG

    Exploring the ‘what ifs?’ in real estate 

    Oct 29, 2019 Bryan Reid

    Real Estate Investing

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    The opacity of real estate markets and the wide spectrum of potential outcomes makes it hard to understand performance. Running a historical “what if” analysis may help institutional investors understand how different choices could have impacted outcomes.

  10. BLOG

    What’s the downside in real estate? 

    Oct 4, 2019 Bryan Reid

    Real Estate Investing , Global Investing

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    Real estate has always been marked by periods of expansion and sometimes painful corrections. But all cycles are not alike.

  11. BLOG

    Underwater assets? Real estate exposure to flood risk 

    Sep 17, 2019 Gillian Mollod , Will Robson

    ESG Research , Real Estate Investing

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    Real estate investors are buying and leasing assets that might be jeopardized by a climate-changed world. A new analysis can help investors identify high-risk U.K. locations.

  12. BLOG

    Real estate may be yielding less than you thought 

    Sep 12, 2019 Bryan Reid

    Global Investing , Real Estate Investing

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    Income has long been an important part of real estate returns meaning yields are often heavily scrutinized by investors. However, headline yields do not factor in capital expenditure requirements which can vary significantly. Investors looking to better understand potential “free cash flow” positions of portfolios post-capex may want to adjust the yields they use to account for it.

  13. BLOG

    The changing face of real estate portfolios 

    Aug 14, 2019 Bryan Reid

    Global Investing , Real Estate Investing

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    Office and retail investments’ historic dominance of commercial real estate portfolios is decreasing, with other property types — including logistics centers, student housing, and data centers — increasing. This evolution highlights how technology and the search for yield have led investors to diversify and seek exposure to other property types.

  14. BLOG

    Have appraisers been too bullish on retail real estate? 

    Jul 30, 2019 Will Robson

    Real Estate Investing

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    Media commentary has fixated on the shuttering of shops, while retail-focused REITs are priced at substantial discounts to the value of their assets. Have appraisers of retail real estate been excessively bullish?

  15. BLOG

    Asian retail resilience: Have store hours affected performance? 

    Jul 9, 2019 Bryan Reid

    Real Estate Investing , Global Investing

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    Industrial real estate has outperformed retail assets in recent years, but the trend has been less pronounced in Asia, where store hours, among other reasons, might have led to more resilient retail performance.

  16. BLOG

    Fed policy, the credit cycle and real estate 

    May 28, 2019 Yihai Yu , David Zhang

    Risk Management , Real Estate Investing , Fixed Income

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    Amid the uncertainty over Federal Reserve policy, investors in commercial real estate (CRE) are confronting asset-allocation challenges and growing concerns about CRE valuation and debt levels, after an extended period of easy credit.

  17. BLOG

    The Right Tool: How Suitable is Your Real Estate Benchmark? 

    Apr 11, 2019 Amit Nihalani

    Real Estate Investing , Global Investing

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    You don’t have to be a master craftsman to appreciate the benefits of using the right tool for the job. Even the most casual do-it-yourselfer has experienced the frustration of using the wrong screwdriver for a particular job — one that doesn’t quite fit the screw properly and shreds the head, leaving it uselessly stuck in the wood without fixing anything.

  18. BLOG

    Don’t confuse capital growth and asset-value growth 

    Mar 21, 2019 Niel Harmse

    Economic Exposure , Real Estate Investing , Global Investing

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    Measuring real estate growth is not a simple exercise; we run through it highlighting some common confusions

  19. BLOG

    Brexit, Black Wednesday and Real Estate's Currency Risk 

    Feb 25, 2019 Niel Harmse

    Real Estate Investing , Global Investing

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    When investors buy overseas real estate, they inevitably take on foreign-exchange exposure. The resulting currency-market dislocations resulted in near-term losses for some investors, but also created attractive opportunities for investors to buy real estate exposure in the U.K.

  20. BLOG

    How mortgage fees affect rates and spreads 

    Feb 7, 2019 Yihai Yu

    Models/Client Cases , Real Estate Investing , Fixed Income

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    How could potential changes in U.S. mortgage policy and possible long-term industry trends affect mortgage-related fees and rate spreads?

  21. BLOG

    2019 emerging real estate trends 

    Feb 5, 2019 Will Robson

    ESG Research , Real Estate Investing , Global Investing

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    For real estate investors, 2019 may be a year of adjusting to rapid changes arising from a variety of sources, including environmental, social and governance-related (ESG) risks; geopolitical uncertainty; and disruptive technology.

  22. BLOG

    Measuring real estate capital growth isn’t rocket science, is it? 

    Jan 28, 2019 Bryan Reid

    Real Estate Investing

    Learn More

    In September 1999, NASA’s Mars Climate Orbiter was lost, at a reported cost of USD 125 million, due to a mix-up in measurements.

  23. BLOG

    Apples vs. Oranges? Core vs. Opportunistic Real Estate Funds 

    Oct 25, 2018 Amit Nihalani

    Real Estate Investing , Risk Management , Global Investing

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    Real estate investors sometimes treat core and opportunistic funds as if they were different asset classes. They are measured against different benchmarks and comparisons are limited by a lack of consistent data. But a comparison of the two shows that both core and opportunistic funds have similar return profiles — it’s the magnitude of their returns that has varied over time.

  24. BLOG

    Global real estate: To hedge, or not to hedge 

    Sep 12, 2018 Will Robson , Bryan Reid

    Real Estate Investing , Risk Management , Global Investing

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    While not quite as profound as the Shakespearean original, it is still quite a tricky one for real estate investors to grapple with. Until fairly recently, it is one that has been avoided by the majority of real estate investors due to their heavy home bias. But the increasing global nature of the asset class, combined with rising currency volatility, means the question is becoming increasingly difficult to avoid.

  25. BLOG

    Brick by brick: asset-level underwriting in real estate 

    May 8, 2018 Will Robson

    Real Estate Investing

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    Due to the private nature of real estate, investors are often faced with making decisions based on broad market-level information or data relating to a rarified class of hypothetical, top-quality, perfectly located, “prime” benchmark properties, which, much like Peter Pan, never age.

  26. BLOG

    For real estate, all rate rises are not created equal 

    Apr 25, 2018 Bryan Reid

    Real Estate Investing

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    A decade after the global financial crisis, the era of ultra-low interest rates may be drawing to a close. Many real estate investors worry that rising rates could hurt their portfolios. However, our analysis suggests it’s the macroeconomic fundamentals driving interest rates, not the rise itself, that are most important.

  27. BLOG

    How e-commerce is reshaping the future of retail properties 

    Mar 13, 2018 Amit Nihalani

    Real Estate Investing

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    Although e-commerce has disrupted industries once considered staples in retail properties, certain retail assets are thriving. Simply put, some goods and services cannot be purchased over the internet: Working out at a fitness center or dining at a restaurant cannot be replicated by online transactions. And while some companies sell groceries online, most food shopping still takes place in stores. Our findings show that experience-oriented tenants, such as movie theaters and restaurants, and internet-resistant retailers, such as supermarkets, dominated the top-performing retail assets in 2017.

  28. BLOG

    Global Gateway Cities: The Performance Behind the Hype 

    Feb 21, 2018 Amit Nihalani

    Real Estate Investing

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    Since the Global Financial Crisis, real estate investors have turned to Global Gateway Cities as a key way to diversify portfolios and to generate capital growth. The conventional wisdom asserts these large, well connected and economically dynamic cities should provide more liquidity and more stable cash flows than those available from secondary markets. But have these cities, which include London, New York and Tokyo, offered the superior and safer investments to justify their premium pricing?

  29. BLOG

    Retail Apocalypse: Should Mall Owners be Worried? 

    Feb 7, 2018 Will Robson

    Real Estate Investing

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    Retailer bankruptcies, department store struggles and empty malls have dominated recent headlines. The apparent culprit? A massive movement toward online shopping, driven by retail giants such as Amazon and Walmart.

  30. BLOG

    Identifying overlooked opportunities in global gateway cities 

    Nov 21, 2017 Amit Nihalani

    Real Estate Investing

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    Increasingly, institutional investors with international strategies tend to concentrate their search for attractive property investments in established Central Business Districts (CBDs) within “global gateway cities,” such as New York, London and Hong Kong.

  31. BLOG

    Understanding the True Risk of Real Estate Assets 

    Sep 26, 2017 Will Robson

    Real Estate Investing

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    When developing investment strategies, institutional investors in private real estate tend to rely on market-level performance data. But many real estate investors know that every asset is different and even two seemingly identical assets in the same area can produce very different returns. How can they better understand the true risk underlying their exposures when developing their strategies?

  32. BLOG

    Have Big-Ticket Properties Performed Better Than Lower-Value Properties? 

    Aug 15, 2017 Bryan Reid

    Real Estate Investing

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    It is sometimes assumed that larger real estate assets perform differently to smaller assets thanks to reduced accessibility and competition at the top end of the market. Using MSCI’s global private real estate dataset, we find evidence to support the assertion that the size of an asset does have an impact on its performance.

  33. BLOG

    Are low yields a risk for your private real estate portfolio? 

    Jun 8, 2017 Bryan Reid

    Real Estate Investing

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    In a global environment of sluggish growth and low interest rates, yields on private real estate are under sustained pressure. Yields have been compressing since 2010 and are now lower than before 2007.

  34. BLOG

    Has foreign capital changed the face of Australian real estate? 

    May 10, 2017 Bryan Reid

    Real Estate Investing

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    In recent years, Australian commercial real estate has attracted considerable attention from international investors, changing the dynamics of what was historically a domestically dominated market.

  35. BLOG

    Listed and private real estate: Putting the pieces back together 

    Apr 19, 2017 Bert Teuben

    Real Estate Investing

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    A property owned by a listed real estate company, such as a Real Estate Investment Trust (REIT) or a real estate management and development company, should produce returns close to those of an equivalent asset that is privately owned. In reality, however, the results differ, especially when looking at short-term performance. The challenge for real estate investors is to be able to use both listed and direct real estate in their real estate allocations and understand the performance drivers for each. Specifically, how do equity market factors, financial structures and individual properties contribute to performance?

  36. BLOG

    EU Solvency Standards for Real Estate: Time for a Fresh Look 

    Apr 10, 2017 Ian Cullen

    Real Estate Investing

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    Following the global financial crisis, the European Insurance and Occupational Pension Authority (EIOPA) required European insurers to reserve capital equal to 25% of the market value of their real estate assets to protect against a 1 in 200 chance of a catastrophic financial event. While reserving against potential catastrophes is critical, our analysis suggests that particular solvency capital requirement (SCR) may be unduly conservative for a diversified European real estate portfolio.

  37. BLOG

    Can real estate benefit from smart beta? 

    Mar 28, 2017 Will Robson

    Real Estate Investing , Factors

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    Institutional investors use factors to capture returns and understand drivers of risk and return in their listed securities portfolios. Can factors that have generated long-term premia in equity markets help identify private real estate assets that have outperformed historically?

  38. BLOG

    Brexit’s limited risk to London office-space portfolios 

    Feb 22, 2017 Sebastien Lieblich

    Real Estate Investing

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    Among the unknowns hanging on negotiations over the U.K.’s leaving the European Union is whether Brexit will trigger an exodus of banking jobs to Continental Europe and what impact that could have on Britain’s economy. A number of financial institutions have discussed relocating some of their operations, leaving many real estate investors worrying about the potential fallout on their London office holdings.

  39. BLOG

    Is your real estate portfolio resilient enough? 

    Feb 10, 2017 Sebastien Lieblich

    Real Estate Investing

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    Amid recent worldwide political, economic and market uncertainty, how can you increase resilience of your real estate portfolio? The answer to this question boils down to prudent use of three simple portfolio construction strategies: Asset selection, sector allocation and global diversification.

  40. BLOG

    Brexit hangover? The effect on U.K. real estate 

    Dec 5, 2016 Sebastien Lieblich

    Real Estate Investing

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    What effect has the United Kingdom’s vote to leave the European Union had on commercial real estate investments? Because of the lag in real estate valuations, we now finally have enough data to start making an assessment.

  41. BLOG

    The real story in the growth of global real estate lies below the surface 

    Jul 28, 2016 Sebastien Lieblich

    Real Estate Investing

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    The global market for professionally managed real estate investments grew marginally last year, reaching $7.1 trillion in 2015, up 2.8% from a year earlier, according to the latest annual survey by MSCI of the largest markets for real estate investment in 32 countries.

  42. BLOG

    What Brexit may mean for London’s office market 

    Jul 11, 2016 Sebastien Lieblich

    Real Estate Investing

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    While several U.K. open-ended real estate funds have suspended trading in the aftermath of Brexit, we find that London’s office market has about 30% exposure to non-domestic tenants who might decamp completely or shift some of their workers to Ireland or the Continent.

  43. BLOG

    The road toward a seamless global real estate portfolio 

    Jun 30, 2016 Sebastien Lieblich

    Real Estate Investing

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    Two roads lead asset owners into real estate: the private (direct and indirect) ownership route and the public equity route. With private assets, investors can analyze performance in detail, down to the asset and vehicle level.

  44. BLOG

    Why Brexit signals turbulence for UK real estate investors 

    Jun 28, 2016 Sebastien Lieblich

    Real Estate Investing

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    Brexit is forcing investors in U.K. real estate to grapple with uncertainty.
    While British equities tumbled 3.1% on the day after the U.K. voted to leave the European Union, shares of the country’s exchange-listed real-estate firms fell 15.4%.

  45. BLOG

    UNDERSTANDING PRIVATE REAL ESTATE 

    Sep 15, 2015 Peter Shepard

    Real Estate Investing

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    Private real estate and other real assets have become a major component of many institutional investors’ portfolios in recent years, but risk management has lagged. A wide range of proxies and assumptions have stood in place of a solid risk management framework, with perhaps the most common risk model being … nothing.

  46. BLOG

    GLOBAL REAL ESTATE: THE CONUNDRUM OF HIGH PRICES AND WIDE YIELD SPREADS 

    Jul 15, 2015 Peter Hobbs

    Real Estate Investing

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    Historically, the majority of global real estate returns have come from income, which has made up more than 80% of the total return over the past decade. In 2014, however, growth in asset values represented 43% of the total return — more than double its long-term average contribution.

  47. BLOG

    Professionally Managed Global Real Estate Hits $7 Trillion in 2014 

    Jun 30, 2015 Mark Clacy-Jones

    Real Estate Investing

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    The professionally managed global real estate market size grew marginally to $7.0 trillion by year-end 2014 from $6.8 trillion at year-end 2013, according to MSCI. Currency movements reduced the global real estate market by approximately 7%.

  48. BLOG

    THE DIMENSIONS OF INCOME RISKS IN YOUR GLOBAL REAL ESTATE PORTFOLIO 

    Jun 25, 2015 Mark Clacy-Jones

    Real Estate Investing

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    Income is the principal foundation of real estate investment returns. For most markets, particularly over the longer term, the vast majority of the real estate return comes through income rather than capital appreciation. The income generating nature of real estate has become even more relevant in an era of ultra-low interest rates, and in the context of the search for yield.

  49. BLOG

    IS REAL ESTATE BOND-LIKE? 

    Jun 16, 2015 Peter Shepard

    Real Estate Investing

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    Many institutional investors have been favoring private real estate over bonds, drawn by its steady income stream and higher yields. While the short-term income may be bond-like, the long-run behavior of the asset class is much more cyclical and growth-sensitive.

  50. BLOG

    THE EROSION OF THE REAL ESTATE HOME BIAS 

    May 5, 2015 Peter Hobbs

    Real Estate Investing

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    As an asset class, real estate typically has a high degree of home bias, especially when compared to equities and fixed income. However, this home bias is starting to erode, with asset owners in most countries already investing internationally or actively exploring options for building off-shore exposures.

  51. BLOG

    GLOBAL PROPERTY DELIVERS STRONG RETURNS IN 2014 

    Apr 15, 2015 Peter Hobbs

    Real Estate Investing

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    Global property has delivered another stellar year of performance of 9.9%, the fifth consecutive year of strong returns since the financial crisis, and the best performance since 2007. A series of countries performed particularly well over the past year, most notably Ireland with a record return of 40%, but also the U.K. (17.9%) and U.S. (11.5%).

  52. BLOG

    REAL ESTATE: ALLOCATIONS AND INTEGRATING RISK 

    Mar 23, 2015 Peter Hobbs

    Real Estate Investing

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    The classic 60:40 mix of stocks and bonds has shifted to a 40:40:20 mix of stocks, bonds and alternatives, according to the 2014 MSCI Asset Owner survey.

  53. BLOG

    LOOKING FOR A NEW WAY TO BENCHMARK REAL ESTATE? 

    Jan 12, 2015 Sebastien Lieblich

    Real Estate Investing

    Learn More

    Commercial real estate’s risk /return profile may be attractive to a variety of institutional investors. Investors may be seeking a diversification effect to their total portfolio; a stable income stream from rent, or inflation protection and expected capital appreciation over the long term.