PwC Real Assets Institute

Markets

Real assets markets differ in their inherent characteristics such as geographic and sectoral sub-markets, low elasticity of adjustment and cyclical behavior depending on other investment areas. Due to location constraints, limited substitutability as well as uniqueness of properties and infrastructure, many local markets show insufficient transparency. Therefore, one of the main challenges of the real estate and construction industry is the information asymmetry of local markets. But by understanding the developments and trends early on, you will have the decisive investment advantage.

Assets

Real Asset investments can be made in a variety of different direct or indirect asset classes. In the case of direct real estate investments, macro and micro locations determine the possible uses of a property. In addition to classic asset types such as residential, commercial and industrial real estate, new asset classes such as student housing, nursing homes and Data Center as well as infrastructure or networks are increasing in importance. Indirect asset classes include open and closed funds, real estate AGs and REITs.

Digital

Over the course of digitization, profound changes should be expected. The long-term challenges of the real estate industry are driven by digitization, as in many industries. Young concepts such as "shared working" and "space-as-a-service“, or the use of data and analytics, are fueling the rise of new business models. The technologies with the biggest disruptive effects in the next 5 years are: firstly the Internet of Things (IoT), secondly Artificial Intelligence (AI) and thirdly Robotics. Proactivity and flexibility are prerequisites for change in companies.

Strategies

The increasing momentum in the real estate industry is calling for more transparency and efficiency in the management of real estate assets. The transparency requirements in particular are being tightened by owners, users, authorities and lenders. Real estate companies must meet these requirements and adapt their planning, management concepts, organization, outsourcing, processes and systems, purchasing strategies and employees to these requirements in order to provide market-driven and competitive services. This requires coordinated strategies and suitable business models, often across borders.

Structures

Tax issues are relevant for the structuring of real estate investments as well as the execution of construction projects and project developments. Legal framework conditions and complex regulatory requirements must be taken into account nationally but also potentially at an international level.

Constructions

Infrastructure and construction projects involve economic risks in all phases of project development. Construction work and the subsequent building management are complex processes, which are often performed inefficiently and uneconomically. A careful analysis of the choice of location, the consideration of the potential and risks of the project as well as an optimal user requirement program are important for the successful implementation of a project. Economic, regulatory and technical issues  mutually influence each other.

Our integrated approach combines engineering, technology, industry and financial expertise and keeps track of the entire lifecycle of an infrastructure or construction project.