CBRE Investment Management [Real Estate - Asia]

Corporate overview 

CBRE Investment Management is a leading global real assets investment management firm with $142.5bn in assets under management* as of 30 June 2024, operating in more than 30 offices in 20 countries around the world. Through its investor-operator culture, the firm seeks to deliver sustainable investment solutions across real assets categories, geographies, risk profiles and execution formats so that its clients, people and communities thrive.

Investment principles & strategy

CBRE Investment Management’s investment philosophy is to deliver superior performance by applying the firm’s knowledge advantage through a disciplined investment process. The firm’s investment philosophy is founded on the following principles: 

Risk must be understood before it can be managed 

• A rigorous risk framework for each mandate is formulated and then portfolios that will meet the firm’s clients’ risk/return requirements are carefully constructed. 

Market conditions change 

• By combining a global view of capital markets with an in-depth insight into local asset fundamentals, the firm invests in the markets and strategies that offer the best relative value at different stages of the cycle.

Every asset is unique 

• The firm utilises its local information networks to understand the drivers and risks of the future cash flow of an asset, enabling the ability to see opportunities where others do not, and to be a disciplined seller. 

Asset management creates value 

• A deeper understanding of occupier requirements enables the firm to maximise each asset’s potential through innovative and sustainable management. 

Consistency counts over the long run 

• A superior investment track record is built through consistent outperformance across cycles. 

The firm offers a range of strategies across the risk-return spectrum.

Sector forecasts

INDUSTRIAL: 

Logistics rent growth varies by country, with Australia forecast to see the strongest average annual logistics rent growth (4.2%) over the next five years, while South Korea and Japan are forecast to see more modest average annual growth (1.5% – chart below). Japan’s rent growth outlook of 1.5% per annum, while modest compared to other Asia Pacific markets, is higher than the country’s historical average annual rental growth rate of 0.85% over the past 15 years (2009-2023). 

Prime market logistics rent growth, five-year forecast versus 15-year historical growth

Australia’s strong logistics rent growth outlook is partially driven by low vacancy rates, which have started to move upwards slightly in 2023 (chart below). CBRE does not expect logistics vacancy to surpass 4% in Australia over the next 12 months. Super prime grade stock is still being readily absorbed in the Australian market at strong rental levels. However, vacancy is expected to rise in lower grade buildings in secondary locations, according to CBRE. 

Australian logistics vacancy rate by market

RESIDENTIAL: 

Residential rent growth, which currently reflects Japanese and Australian markets, is forecast to average 2.6% per annum in the next five years. Australian residential average annual rent growth is much stronger (5.2%) than Japan (2.2%). However, since Japan is a much larger institutional residential market, it weighs more on the overall Asia Pacific average.

OTHER:

Aggregate Asia Pacific rent growth is forecast to average 2.3% annually over the next five years. The alternative sectors – hotels, data centres and healthcare – are forecast to see the strongest rent growth over the five year forecast period (chart below). 

Prime market five-year average, % Y-o-Y rent growth, Q3 2024–Q2 2029

Data centre rent growth is driven by data consumption, cloud computing and artificial intelligence demand. Rent growth in the hotel sector, which represents just Japanese hotels, is primarily driven by a continued post-pandemic rebound in tourism, which is being aided by a weak yen making Japan more affordable for international tourists. 

Strategic corporate development

CBRE Investment Management seeks to be a leader in global real assets investment management by consistently delivering outstanding performance and exceptional client solutions. The firm continues to bolster its existing global platform and grow purposefully over time. In particular, the firm is focused on growing the following programs over the next three to five years in alignment with investor appetite and objectives: 

• Open-end, diversified core real estate funds in the US and Europe 
• Open-end, diversified global core-plus funds in real estate and infrastructure 
• Open-end, sector-specific core-plus funds in logistics and residential in the US and Europe 
• Closed-end, enhanced return real estate fund series in the US, Europe and APAC, plus a global opportunistic secondaries fund series 
• Listed real assets strategies across real estate and infrastructure 
• A select number of premier separate accounts across asset classes, regions and/or execution formats.  

CBRE Investment Management does not place absolute limits on growth in any of the above areas, with the exception of selective hard ceilings on closed-end funds based on overall capacity of the investment opportunity. In general, the firm would limit growth if the expected high level of performance or service could not be provided or when growth would jeopardise the performance of existing investments. We do not foresee any potential conflict of interest that could arise from managing this particular account.

We do not foresee any potential conflict of interest that could arise from managing this particular account. 

_{COMPLIANCE STATEMENT}

_{Senior management of CBRE Investment Management is responsible for ensuring compliance with a code of ethics, regulatory requirements, and fiduciary obligations.}

_{CBRE Investment Management is an investment adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. It also is authorized and regulated in certain European and Asian countries to undertake certain regulated activities in conjunction with its investment advisory and fund management services.}

_{The firm has designated compliance officers across the regions and has adopted, implemented, and provided for reviews of adequacy and effectiveness of its written policies and procedures.}

_{All employees are required to comply with the Investment Management Policies and Procedures, which include legal and compliance policies.}