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Real Estate: Capturing opportunities

Capturing opportunities amidst market volatility and price dislocation
11 June 2024
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    Real estate: Capturing opportunities amidst market volatility and price dislocation

    Following the market downturn across 2022/23 that ended the decade-plus real estate bull run, we believe pricing appears to be at or near the bottom for most sectors, with transaction activity showing signs of improvement.

    Global economic headwinds and capital markets volatility have dislocated current market pricing and created opportunities for experienced and well-capitalised investors to acquire high quality real estate assets on a value basis.

    We anticipate compelling opportunities emerging, but varying across asset, sector and geography:

    • Asset level: We see the bifurcation between prime and secondary assets widening, with good-quality assets with strong environmental, social and governance (ESG) credentials set to outperform.
    • Sector level: We favour sectors that are underpinned by strong thematic tailwinds, such as the logistics, residential and certain alternative sectors (such as data centres and life sciences).
    • Geographic level: We prefer regions that have either repriced the fastest, or where regional economies are set to outperform.

    HSBC Asset Management has a high conviction in opportunistic real estate strategies. We favour large, experienced managers with strength in depth, active asset management capabilities and proven track records of investing in times of volatility, as they are best placed to take advantage of the current price dislocation.

    Read our paper to find out more.

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