The changing landscape of real estate investment

Investment in real estate, due to the nature of the market, is an activity which changes, shifting to the societal, political and economic trends which shape our world, as investors work to build solid portfolios. As Laurent Ternisien points out, “Where real estate investment was very focused on offices and housing, now a number of asset classes have become real estate investment assets. Like for example, healthcare, and logistics platforms, which are very on trend the moment. What’s also really important is when we think about real estate investment, in comparison to other asset classes, because of the structural trends, we note that real estate is a good diversification strategy meaning that the correlation or link between other asset classes is often very different so it’s important for investors to have stakes in real estate.”

As investors in real estate become interested in diversifying their portfolios, branching out into assets which go beyond the office, there is a tangible impact on how the city is affected. As Laurent Ternisien explains, “The investor has a key role to play, and is as such the manager of investment, which impacts the construction and continual development of a city.” 

With varying types of investors, with different risk profiles and timeframes, the cities around us are able to be constructed in a forward-thinking manner. “Today there are a large range of investors which means that we can continue to construct the city in a progressive way, with investors that are willing to take bigger risks and investors that are ready to commit not only to a building but to an area. These investors still have a wealth-focused, long-term strategy and are there to accompany, over a long-term period, the development of the city,” says Laurent Ternisien. 
 

A growing awareness of the impact that the real estate sector, and indeed individual buildings, has on the planet, has pushed cities, inhabitants and investors to rethink how cities are built, run and interacted with. For many investors, protecting the future of a building is becoming a pressing subject, along with ensuring that a building sits within a future that is greener and more sustainable. As Laurent Ternisien explains, “There are a lot of things that we can do to improve the environmental performance of a building. We can help it perform better in terms of energy, by better insulating it, by changing energy sources. We can also integrate biodiversity, and focus on a large range of actions regarding the environment.” 

As the world around us changes, so too do the needs and demands of investors. As cities expand to welcome increasing numbers of people, the role of the investor also grows. This changing relationship will notably have an effect on the places that we work, live and interact in.