International investment was the central focus of a lunch roundtable session held on June 7, the first day of REITWeek 2016: NAREIT’s Investor Forum, at New York’s Waldorf Astoria hotel.
Highwoods Properties, Inc. (NYSE: HIW) President and CEO Ed Fritsch, NAREIT’s 2016 Chair, moderated the discussion. He was joined by GOH Kok Huat, COO and president of real estate with GIC Private Ltd., Singapore’s sovereign wealth fund, and Christopher Nassetta, president and CEO of Hilton Worldwide.
Huat and Nassetta both underscored the importance of China despite the uncertainty in that market.
“There’s no way one can ignore China from an investment perspective, even if one were pessimistic about the short term,” Huat said.
“China is an absolute imperative for us,” Nassetta noted. He added that China’s middle class is expected to double in the next 20 years. Nassetta also pointed out that economic growth in China is “much better than people think. We have a very constructive view on China long term.”
Huat described the GIC investment strategy as a “bottom-up” approach, driven by local teams in place on the ground that look for value and opportunity. The fund’s investments are currently split about evenly between the United States and Europe on one side, and Asia on the other.
“Our long-term investment horizon allows us to enter and exit markets at a time of our choosing,” Huat explained. He added that GIC invests across all sectors of real estate.
Meanwhile, Nassetta stressed the importance that Hilton’s brands maintain broad-based appeal and not to overemphasize any particular demographic group. While millennial preferences seem to dominate the discussion, Nassetta pointed out that the bulk of travelers today are actually baby boomers and members of generation X.
Nassetta also commented that Hilton’s decision to spin off its hotel and timeshare operations will result in three “market-leading, pure-play businesses.”