FINANCE - FUNDS

Real assets

‘Continuously re-assess’ investment approach



Friederike Werner, team lead product development at DWS, speaks about real estate fund trends at the upcoming Alfi PE & RE conference. Photo credit: DWS Investment 

Friederike Werner, team lead product development at DWS, speaks about real estate fund trends at the upcoming Alfi PE & RE conference. Photo credit: DWS Investment 

The Association of the Luxembourg Fund Industry holds its Private Equity and Real Estate Conference 30 November-1 December 2021.

In advance of the event, Delano spoke with Friederike Werner, team lead product development at DWS. She speaks during the “C-suite perspectives and trends in real assets” session, Wednesday 1 December at 9:10am.

Aaron Grunwald: What do you want the audience to get most from the REIF trends session? 

Friederike Werner: The REIF trends session is aiming to provide the audience with insight into how, in practice, investment managers adapt to the new world, anticipate and leverage market trends and keep on top of the constantly changing landscape, including legal, regulatory and tax developments, to ensure managers can meet investor demand, investor requirements and comply with their fiduciary obligations vis-à-vis investors.

The last number of years have seen significant developments fundamentally changing the way we look at RE investments. These developments, notably digitisation and impact investing, give rise to many questions, challenges but also opportunities, you just need to find them. They require investment managers to continuously re-assess and adapt their approach to RE investment. It also forces managers to re-assess their own business models to stay competitive and be able to offer investors products that leverage market trends and meet investor needs.

Is the covid pandemic still influencing real estate investments?

Covid has been very disruptive for the RE market in 2020 for certain asset classes and the impact continues to be felt in 2021. Sectors that were particularly impacted by the pandemic were the hotel industry and retail. Covid has accelerated the demise of retail properties, which already felt the pain from the fast growing e-commerce business, outside the big cities, but even within city centres in prime locations the impact is noticeable. On the other hand, covid has accelerated transformational changes. Logistics has clearly benefitted from the pandemic as a result of the extended lockdown. The residential sector generally showed its resilience. The prime end of the market is rebounding from minor adjustments, while commuter locations in major agglomerations are profiting, as they are becoming more attractive as a result of covid enforced and not fully embraced flexible working arrangements. And of course sustainable investing, which is truly going to transform the industry and where capital will be going, will force managers to fundamentally re-assess the approach to RE investment to continue attracting private capital.

What is the most interesting question that you’ve gotten from real estate investors this year?

One question that was raised often and is a very interesting one in my view, as it concerns many investors, is about the future of offices. What will the market look like in 5-10 years’ time? One part of the question is about the level of demand in the wake of shifting working habits due to the covid pandemic. Another aspect is about quality and location, especially with regard to changing ESG and next generation office standards. This is certainly a question that concerns many investors directly (place of work) and indirectly (investment product), as offices are still the most important part of the investment landscape.

Aside from your own talk at the Alfi event, which session are you most looking forward to hearing, and why?

The choice of topics reflects well the current developments in the alternative asset classes and I am looking forward to every one of them. The session I am most looking forward to, though, is the update on infrastructure [editor’s note: Wednesday 1 December at 10:55am] as DWS manages a series of successful infrastructure funds and I would like hear more about market trends and outlook in this sector.

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