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The firm has surveyed executives in the real-estate industry worldwide. The mood in the United States and Europe is sombre. Although many companies report cash bonuses remain on track, compensation is otherwise suffering. The value of prior equity grants to professionals remains questionable, and FPL expects salary increases to be capped at around 4%, while longer-term incentives will also be reduced.
Real-estate investment companies are trying to boost efficiency, and are restructuring their portfolios to take advantage of distressed properties hurt by the US subprime crisis.
Surprisingly, recruitment remains active in the US, while in London firms with global operations are still hiring. But the strongest recruitment demand comes from Asia and the Middle East.
Local talent with global experience, especially in construction and development, is at a premium, according to the FPL report. Similarly, investment managers are becoming highly sought out to deploy capital for the increasing numbers of new funds investing in global markets.
One area of growth outside of the United States: real-estate investment trusts. Reit legislation and securitisation techniques are driving growth in international real-estate investment, says FPL. And capital continues to be made available for real-estate deals, particularly for new funds looking to take advantage of distressed conditions, in both equity and debt.
Moreover, there is growing interest in the creation of fund of funds with global mandates, as small and mid-sized sponsors seek investment managers to deploy capital into real estate worldwide.
In Asia, vast capital inflows support the need for real-estate investors to recruit, but the region still has a shortage of Western-trained talent. Meanwhile the Middle East is emerging as the fastest growing user of executive search, as Israeli developers forge into the worldÆs emerging markets and the Gulf continues to export more capital worldwide. These regions remain an option for professionals in the West who are willing to relocate, says FPL.
Investors are increasingly turning to private companies and private debt in their hunt for ESG alpha, but the age-old problem of transparency and due diligence remains
Already on the rise pre-Covid, investments into data centre assets in Asia have accelerated in the past year, fuelled by interest from investors across the spectrum.
Actively managed funds were also not found to have better odds of higher returns than more passive funds.
Investors still favour private equity assets for their higher growth, better governance structures, and diversification potential.