Our inaugural live-streamed Deep Dive on what’s ahead for the 2020s kicked off with a two-parter, the first being an exclusive fireside chat with J-P Toppino, Group President and Real Estate Managing Partner at PAG and PERE’s very own Adam Smallman.
Adam then reconvened a couple of hours later to host the second part of our future-focused programme in a discussion with Isabelle Scemama, Global Head of AXA IM Alts and CEO of AXA IM – Real Assets, Judy McMahan, Portfolio Manager Real Estate, UPS Group Trust, and Philip Mintz, Senior Partner, Apollo Global Management.
Read the full rundown and key insights below!
Next Deep Dive
Thursday 18 February
Future of valuations: is there a better road to fair value?
UPS Pension Fund
Senior Partner and Chief Investment Officer – USA and Asia Real Estate
Apollo Global Management
AXA Investment Managers – Real Assets
Group President, PAG
Managing Partner, PAG Real Estate
How will real estate emerge from the covid crisis?
“Due to strong political action and thanks to the current low interest rate environment, we expect a strong recovery”
Isabelle Scemama, AXA IM – Real Assets
The experts touched upon the important issues to hit real estate, starting with what sets the current covid-crisis apart from the 2008 crisis before touching upon the day-to-day quandaries of operating with a remote workforce both internally and how to constructively approach occupancy disruptions on their client sides.
Core is still core, except for when it isn’t
In terms of fund management the leaders discussed the new realities of core portfolios, which remain attractive by moving away from established ‘trophy’ investments to sustainable and reliable cashflow investments, something that can and will include sectors that have previously not fit this description, such as logistics and datacenters.
“I still see lots of liquidity chasing real estate as opposed to some other alternative assets”
Philip Mintz, Apollo Global Management
However, investors should not blindly jump onto the datacenters and logistics bandwagon, unless they are sure managers have the expertise, have secured the necessities of skills, watts, and bandwidth and are actually establishing those in locations where the tenant base makes sense.
The future of office might not be in the office
“When covid is over we will be back into the office – but in a different way”
Judy McMahan, UPS Pension Fund
All remain confident about the residential market, fuelled by liberal lending conditions and a resilient appetite throughout covid, but more reserved on office growth after covid. “In Asia we are still fairly aggressive with office […] whilst in the US and America the use of office space will differ significantly” predicts Mintz. “Office assets that have better technology […] will be on the forefront” of this recovery adds AXA’s Scemama.
Is retail dead?
“The only time I will ever acquire a shopping mall again is when I can turn it into a datacenter”
JP Toppino, PAG
Retail remains the most difficult sector, albeit McMahan convinced that “[..]retail is not dead, it is always changing, always evolving, but it’s a pass for now”, followed by Toppino’s shedding of a harsher perspective stating that “the only time [he] will ever acquire a shopping mall again is when [he] can turn it into a datacenter”, thus cementing the current views that retail will remain in the real of distressed assets for now, a sub-asset class for which all experts share a bullish optimism.“
All eyes to the future generation
“Learning is significantly impacted by not being on the road, […] impacting the ability to do your job.”
Judy McMahan, UPS Pension Fund
Lastly, Toppino shined a light on how the current trend of consolidation amongst real estate players can benefit both sides of the equation by leveraging market shares and concentrated expertise. Referring to the latter, his fellow Deep Dive panellists are all looking forward to welcoming the next generation’s skillsets in the context of how asset knowledge, innovation and adaptability, with technology and environmental sustainability at the forefront of real estate in the decade to come.
What’s changing, the implications, what to expect from investor reporting, and more
Prepare for the Asian REITs revolution
How top firms incorporate women, diversity and inclusion to enhance growth
How to value life sciences, diminish risks, hire effectively, and assess the outlook
Three original thinkers share their outlook on current markets
How to take advantage of the opportunities and avoid the pitfalls of distressed debt
Three LPs’ Chief Sustainability Officers on their ESG real estate expectations and values
If core is no longer core – then what the hell is!?
Do you really have to invest in Blackstone? Why size doesn’t have to matter
Where listed real estate can – and oh-so-can’t – fit your investment strategy