INVESTMENT ACTIONS

Global real assets outlook 2019

BlackRock |26-Feb-2019

Attractive fundamentals continue to drive a great migration to the asset class, but a changing macroeconomic climate requires careful navigation.

With capital-raising outpacing deployment, competition for real assets is strong. The fundamentals underpinning performance remain broadly favorable: Real estate occupancy is above long-term averages in most sectors and markets, and the positive trend in infrastructure utilization continues.

Capital at risk. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

Our report covers the following investment and market trends:

  • Investors are increasingly looking beyond their borders. More capital is flowing globally.
  • Portfolio resilience is top of mind. Secured cash flows, alignment with long-term trends and ESG-aware underwriting are key.
  • In real estate, tech-driven disruption continues. Also: Office-market impact of talent wars in North America, value-add opportunities in Europe and demographic tailwinds in the Asia Pacific.
  • In infrastructure, the energy and power transition rolls on. Also: Corporate appetite for renewables in North America, more auctions in Europe, and deep needs in the growing economies of Latin America and Asia Pacific.

In 2019, the single biggest issue facing investors is how to deploy capital as the cycle matures. The current climate is constructive for investors to maintain market exposure, but does call for greater focus on understanding risks — and picking the right ones.

Healthy flow: Global real assets transaction volumes bounced back in 2018

global capital flows

Source: BlackRock, using 2014-2018 global transaction volumes data from Real Capital Analytics (‘RCA’) for Real Estate and IJGlobal for Infrastructure, as at 31 December 2018. RCA global real estate transaction volume data for income producing properties excludes land development. IJGlobal global infrastructure transaction volume data reflects project finance equity and debt, and excludes sectors outside BlackRock’s definition of infrastructure, such as metals and mining, oil and gas exploration and petrochemicals. All data is presented in USD, and percentage changes may be affected by non-USD currency fluctuation versus the US dollar.

Meet our team
Alan Synnott
Alan Synnott
Global Head of Real Assets Research & Strategy
Steven Cornet
Steven Cornet
Head of US Real Assets Research
Patrick Ewane
Patrick Ewane
US Real Assets Research
Alex Symes
Alex Symes
US Real Assets Research
Eric Tawney
Eric Tawney
US Real Assets Research
Simon Durkin
Simon Durkin
Head of European Real Assets Research
Vignesh Shanmugasundaram
Vignesh Shanmugasundaram
European Real Assets Research
Cynthia Parpa
Cynthia Parpa
European Real Assets Research
Bruce Wan
Bruce Wan
Head of Asia Real Assets Research