Future-Oriented Real Estate Investment Strategies

Real estate investment represents a major driver in the context of a broad recovery in the world’s capital markets. And it is thanks to this that we closed 2022 with a clear trend among investors to adopt a new perspective where flexibility, sustainability, and technology play a major role in decision-making.

However, caution remains, since the third quarter of 2022 alone represented 24% less (US$234 billion) in global direct investment than the same period last year. As a result, liquidity in the markets weakened even more, affecting investment conditions.

There is a notable shift toward the inclusion of responsible investments in portfolios. Repositioning, diversifying, and converting is the strategy that currently offers the best results when it comes to capitalizing assets and mitigating future risks. The general impact and social responsibility of those strategies and decisions by investors are the main focus that aligns these concepts; below I explain how they work.

Reposition: Readjust Strategies

The real estate sector continues to take into account the profitability of a project, but with a greater focus on the experience it creates for those who occupy it. And it has worked, as quality assets are outperforming and dealing with volatility and unexpected changes to deliver growth in an increasingly competitive and creative environment.

The current overall commitment to the health of our planet has led to a renewed emphasis on sustainability. In addition to the rise of alternative financing that has also arrived to boost competitiveness.

Diversify: Growth Sectors

Exploring investments in new sectors, geographies and locations is also a way to keep up with market changes. Emerging sectors are performing well, while traditional sectors present opportunities as they recover; an example of this is the growth of rent in cities and the change in work patterns that have revitalized the concept of the traditional office.

In our changing world, one thing is very clear: well-being is a priority. End users are now  pushing demand and this has generated the emergence of new sectors that attract capital; this has given rise to interesting phenomena, such as the increase in good investment opportunities in regional cities, which have registered higher rental growth in the last 10 years.

Regeneration: Prepare Your Property for the Future

We are facing a new dawn, in which work and life are intermingled, and real estate must offer this much sought-after experience of office spaces, residential buildings, shopping centers, entertainment venues, and hospitality. People are looking to live, work and shop in places that provide an exceptional user experience and have strong sustainability credentials.

Sustainable projects are the real estate industry's top priority and energy-efficient properties are more profitable. Therefore, investing wisely means complying with the carbon neutrality goals that are paramount for both all investors and property occupants.

Undoubtedly, the long-term challenges raised by the current economy, monetary policy, and geopolitics are taking a toll on investor confidence and underwriting. These factors are creating an uncertain outlook, prompting more cautious decision-making and introducing capital restrictions for more market participants. However, the trend is toward building resilient portfolios, as the search for substantial income flows and the opportunities that arise everyday challenge traditional strategies.