Alternatives Outlook 2024 Report

FIGURE 1: MAJOR ALTERNATIVE TRANSACTIONS 2023

MAJOR ALTERNATIVES TRANSACTIONS 2023

Serenitas Land Lease Portfolio

Healthscope Portfolio

Scape BTR Fund

Student One

Mirvac BTR

Date

May-23

May-23

Sep-23

Oct-23

Jun-23

Portfolio Sale (Healthcare)

Capital Raise (BTR)

Platform Sale (PBSA)

Platform Sale (MHE)

Re-Cap (BTR)

Type

Price (AUD)

1.3 billion

1.5bn*

~500 million 1.0 billion 1.8 billion*

Alternatives market investment activity remained below peak levels in 2023, reflecting the muted environment across real estate capital markets more broadly. Despite operational resilience, the alternatives sector has not remained unaffected to the prevailing macroeconomic environment. Figure 1 highlights key contributors to alternative investment volumes in 2023. Notably, several of these high-profile transactions involved first-time scale investments into their respective Australian sectors. Such examples include Mirvac’s foray into land lease communities via their investment into Serenitas and Blackstone’s acquisition of the Student One platform. Although

many alternatives have high barriers to entry, real estate managers already well versed in Australian capital markets with strong existing investor relationships are well placed to increase exposure to Australian alternatives. Alike the core sectors, most alternative sectors experienced a softening in metrics over the first half of 2023 due to the impact of ongoing economic conditions and the increasing cost of capital. However, sectors such as PBSA and BTR were able to offset this softening through significant rental growth and consequently maintain capital values. While pressures are expected to persist in the first half of 2024, Cushman & Wakefield does not foresee any further material softening across transactions given the scarcity of quality investment opportunities across the market.

APG & Bouwinvest

Mitsubishi Estate

Investor

HMC

Blackstone Mirvac & PEP

* Total fund size, not amount raised

| AUSTRALIA ALTERNATIVES 5

CUSHMAN & WAKEFIELD