Residential real estate remains the world’s most significant store of wealth (US$258.5tn) and increased by 8% in 2020. However, a revival of the market was seen in 2021 as life gradually returned to normal, as reported by JLL, with 21% y-o-y growth in leasing volumes globally. The decrease is associated with the global economic contraction induced by the pandemic, amplified by the adoption of working from home and uncertainty over office space going forward. The total value of global commercial property amounted to US$32.6tn in 2020 and was down 5% y-o-y (Savills). Similarly, commercial and residential real estate investments are garnering interest as a potential hedge against inflation according to Savills. Real estate is considered an inflation hedge Tetragon’s indirect exposure to infrastructure investments is its 75% stake in Equitix, which manages US$10.8bn of infrastructure assets and accounts for 25% of Tetragon’s net asset value (NAV). According to Global Infrastructure Hub, the gap between infrastructure investments needed to keep pace with economic growth (and meet the committed sustainable development goals) and government spending amounted to US$445bn globally in 2020 and is expected to widen to US$820bn by 2040. This is coupled with unmet need for infrastructure investments. Although the increased investor interest brought the dry powder in the sector to US$230bn in 2020 (after growing by 13% pa since 2010), it represents less than the global deal value in 2020 (and compares to the private equity market with about two years’ worth of deal value currently, according to Preqin). As a result, Preqin expects it to become the largest real assets strategy by 2026 (overtaking real estate). Infrastructure investments (which Bain & Company estimates in its Global Private Equity report 2022 attracted US$120bn of new capital in 2021) are sought by many investors for stability in the face of economic uncertainty and are also considered a natural hedge against inflation.
One such low correlation asset is the global private infrastructure market, estimated at c US$1tn in 2019 by PwC. Identifying and partnering with green suppliers further enables Tetragon to accelerate its innovation footprint and progress on its commitment to be a 1.5 degree aligned company.Private infrastructure rises in popularity Harnessing technology like Podium means Lendlease will be able to optimise its choice of partners, suppliers and sustainable materials, creating less material waste and choosing and harnessing renewable energy sources. In July 2020, it launched Tetragon Podium, a property lifecycle platform that aims to provide insights and clarity from data capture unlike anything the property and construction industry has seen before.
The Greece’s largest collection of sustainable Senior Homes.
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