Nareit Chair Sees Pricing Power Benefits from Rising Interest Rates

Sandeep Mathrani, CEO of Brookfield Properties Retail, vice chairman of Brookfield Properties, and Nareit 2019 chair, participated in a video interview at Nareit’s REITworld: 2018 Annual Conference.

Looking across the industry, Mathrani noted that “business is actually quite good across all REIT sectors…even in the retail sector, where we’ve actually had increasing income {and} increasing dividends.”

The move to elevate real estate to a new headline sector under the Global Industry Classification Standard (GICS) has increased visibility for the industry, according to Mathrani.

Meanwhile, Mathrani commented that the current rising interest rate environment means that inflation is present. “Inflation usually is good for real estate…We’ve seen over the long term that inflation gives us some pricing power, which is what we haven’t had for the last decade.”

Mathrani also stressed the importance of attracting talent to the real estate industry.

“For us to have a proper program where we’re recruiting from universities early in the game to build a pipeline of talent is something our industry has never done…We’re basically cannibalizing each other’s companies for talent,” Mathrani said. He added that in a tighter labor market, talent becomes an even bigger issue.