Demand for Australian healthcare, purpose-built student housing, data centres, life sciences and logistics assets will hit fever pitch once the flow of international capital resumes, says AXA Investment Managers’ head of Australia Kumar Kalyanakumar.
In an era of heightened uncertainty, alternative assets now represent an opportunity to provide superior risk-adjusted returns for investors looking to gain diversification benefits, reduced cyclicality and exposure to the mega-trends.
In this TUD+ Briefing, Kalyanakumar discusses AXA’s current target sectors, the growing concerns around the risk of inflation and Australia’s role as a destination for capital in the medium term.
“Our view is that returns are going to be low for a very long time and in this climate investors are hunting for predictable yields,” Kalyanakumar said.
“Investors are looking for greater returns and we believe the alternative space has structural tailwinds that investors can benefit from.”
In late-2019 AXA, Grosvenor Group and Centuria’s subsidiary Centuria Heathley, set up the Australian Diversified Healthcare Fund (ADHF) to build and hold a $500-million healthcare property portfolio across Australia.
“People are looking for better treatment and the current stock here is dated and we need to build more assets—and private capital has yet to go into this sector like it has in other parts of the world.”
Kalyanakumar remains positive about the long-term future of purpose-built student housing (PBSA), which has suffered due to border closures.
“We are also active in the PBSA market,” Kalyanakumar said.
“In a normalised market there is an undersupply of PBSA stock and the fact remains that international students want to come to Australia to receive an English degree.
“Because of that demand is going to keep increasing and once things are back to normal student housing facilities will be filled.”