Markets at Inflection Point: The Case for Real Estate

HIGHLIGHTS

• The global financial crisis shifted the dynamics of the market, pushing interest rates to record lows and swelling central banks’ balance sheets. Investors are increasingly looking at alternatives to manage risks and achieve targeted returns.
• The fixed income bull market is dwindling and volatility is at an all-time low, creating a false feeling of safety. Over the past few years, traditional asset classes appear to be more and more correlated to each other, greatly reducing the benefits of portfolio diversification.
• Adding alternatives to a traditional investment portfolio enhances risk-adjusted returns and reduces volatility.
• Sovereign wealth funds have already jumped on the band wagon and increased allocations to alternative asset classes while reducing exposure to equities and fixed income.
• Among alternatives, real estate is one of the most popular investments among GCC investors. Exposure can be achieved via private debt, private equity, public debt or public equity.
• Real estate investments offer attractive returns, portfolio diversification, and hedge against inflation.