Despite high mortgage rates, growing demand has kept both Canadian and US real estate markets competitive through the first half of 2023. After a year of resilience, Asian markets posted losses this week after concerns over China's property sectors remain top of mind. Joining the show today to discuss the current global market landscape and share what themes he is evaluating for the remainder of the year is Steve Buller, portfolio manager of the Fidelity Global Real Estate Fund. Steve tells host Pamela Ritchie about the impact he has seen China's property sector have on the global real estate market, focusing especially on the indirect correlations through GDP growth. He explains that while there's no direct contagion, a prolonged downward trend in Chinese property could indirectly impact global GDP, and, subsequently, the demand for commercial real estate. Elaborating on commercial real estate, Steve discusses the evolving dynamics of the office space, considering factors like remote work, hybrid models, and the competition posed by co-working spaces. On a related note, he also touches on alternative real estate segments, such as data centers, which are seeing increased demand due to digitization and AI. Steve also talks us through the effect of rising interest rates on real estate segments, the role of balance sheets, and the potential value of education centers within cities. Throughout the discussion, Steve emphasizes that the fundamentals of real estate, including demand and supply dynamics, remain strong despite challenges and interest rate fluctuations.

Recorded on August 18, 2023

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