Q. How has APG’s appetite for the real estate sector evolved in the last 12 months?
As a long-term investor, our appetite for real estate has always been consistent, accounting for around 10% of our overall portfolio. It is a proven resilient asset class, and our strategy is shaped by the global macro trends rather than market cycles.
Q. Which sectors does APG favour and why?
In recent years we have pivoted towards residential and logistics, while retaining a selective interest in offices and reducing our exposure to retail.
We have an increasing focus on operational real estate, which while requiring a more proactive and hands-on approach to management, enables us to build deeper relationships with occupiers and provides more scope for income generation and additional returns.
Q. Which world cities does APG favour and why?
We have a global portfolio, predominantly in the more developed markets, in the key cities and large gateway destinations. Urbanisation is a clear global trend which influences our strategy.
Q. What returns does APG anticipate making from real estate over the next year and the next five years?
We are long-term investors and as such our outlook extends beyond five years. Our fully integrated strategy combines REITs and non-listed real estate so we build and manage a portfolio of investments that offer consistent dividend and grows in value over the long term.
Q. What is APG’s approach to ESG?
We place a strong emphasis on sustainability and plot all our assets adopting the strict certification measurements of GRESB, BREEAM and CRREM. This is a high priority for all our stakeholders and our success has been a key factor in the ongoing execution of our strategy.
Also, we have also undertaken a comprehensive independent climate risk audit of all our 110,000 assets worldwide to identify our higher risk assets so we can subsequently take action where possible to address and mitigate risks. Social impact will become an increasing priority for us in the next few years, while strong and robust governance has always been part of our DNA.
Q. What do you see as the biggest opportunities and concerns over the next year?
Climate change is the single biggest issue. We are all well versed in adapting to market cycles, but this is clearly a much bigger, existential challenge. The opportunity for the industry is to come together in collaboration to work harder and smarter to find and deliver solutions. This will require a different mindset and approach to the inherent instinct to find a competitive edge and differentiation to our peers.
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