Leadership in a changing landscape
Due to the market experiencing significant growth, asset managers’ workload has increased; they are now in need of ways to improve efficiency and limit expenses, resulting in outsourcing part of their activities.
Ciro DeCiantis, National Investment Properties Sector Leader and Partner in the Deloitte Audit practice in Canada, meets with Bryan K. Davis, Chief Financial Officer of the Brookfield Property Group, to discuss investment strategy and opportunities of the real estate markets and new challenges after Brexit.
1. Brookfield Asset Management Inc. (BAM) is one of the most important and strategic investors in the global real estate market. Could you summarize the different ways in which Brookfield invests in real estate, both for itself and for its strategic partners?
Brookfield invests in high quality commercial real estate assets around the globe primarily in two ways—either directly on the balance sheet of our flagship public partnership, Brookfield Property Partners (BPY), or through Brookfield-managed private equity real estate funds (hereafter referred to as the funds). Approximately 80 percent of our invested capital is in premier class A office and retail assets in many of the world’s most dynamic and resilient markets, including North America, Europe, and Australia. The remaining 20 percent represents BPY’s equity participation in the Brookfield-sponsored funds. That sponsorship encompasses fundraising, deal sourcing, capital deployment, operations, liquidity distributions, and ultimately fund wind-up and dissolution. In addition to the funds, we often invest alongside our strategic partners through joint ventures at the asset level, whereby we will manage a property or properties on their behalf. Collectively we have over US$140 billion in real estate assets under management, making BAM one of the largest real estate investors in the world.
Generally we seek to earn 12-15 percent returns on our equity on a long-term basis, which includes stable 10-12 percent return expectations from our core strategies, supplemented by 18-20 percent return targets from our opportunistic strategy.
REflexions issue 4 - October 2016
REflexions is a bi-annual digest, dedicated to the real estate investment management professionals, which brings you the latest articles, news and market developments from Deloitte’s professionals and clients.