Nuveen Asset Management Expects Global Real Estate Asset Values to Recover

There are forecasts that the artificial intelligence (AI) industry will also impact the real estate market. In addition, it is expected that the value of real estate assets, which declined during the COVID-19 pandemic, will gradually recover.

On September 10, Nuveen Asset Management held the "2025 Global Real Asset Market Outlook Press Conference" at the Conrad Hotel in Yeouido, Seoul, and projected, "The value of real estate assets, which dropped after the COVID-19 pandemic, is expected to recover within the next three to seven years."

Nuveen Asset Management is an investment management company under the Teachers Insurance and Annuity Association of America (TIAA), which manages assets worth 1.3 trillion dollars.

Chad Phillips, Global Head of Nuveen Real Estate, explained, "In 2022, as the value of stocks and bonds declined, the proportion of real estate in investors' portfolios exceeded their targets. However, as of the end of June, the share of private real estate in total investor portfolios has decreased to 7.6%."

In the past, the proportion of real estate was 10.0% in October 2021 and 13.7% in 2022.

He stated, "Construction costs are rising due to inflation. In addition, the U.S. government's anti-immigration policies have reduced the number of undocumented immigrant workers, who previously accounted for half of the construction market, so new supply is expected to decrease further."

He continued, "There is room for rent increases, and negotiating power over tenants has strengthened, so the performance of existing real estate assets is bound to be strong."

He assessed that the recovery in real estate values has only just begun, and it will take about three to seven years to return to pre-pandemic levels.

Abigail Dean, Global Head of Strategic Insights at Nuveen Real Assets, analyzed, "Looking at the performance of the 'Magnificent 7 (M7)' in the U.S. stock market, you can see how much confidence there is in the AI industry. However, productivity gains have not yet been realized in the real estate market."

She added, "The AI boom is driving increased demand for data centers and electricity, so we are focusing on infrastructure assets."

Nuveen Asset Management does not directly invest in data centers in Korea. However, in Korea, it is indirectly investing, mainly in solar power-related sectors needed for data center operations.

This content was produced with the assistance of AI translation services.