The $30 million toe in the water

Cohen & Steers' Ji Zhang is betting big on global real estate, with a focus on AI-driven growth and improving leasing conditions. Her top picks include Boston Properties, a $9-billion company with a portfolio of high-quality office buildings,and Blackstone Digital Infrastructure Trust, a unique play on the AI infrastructure theme.

According to Ji Zhang, the real estate sector has been seeing strong performance this year, driven by a combination of great secular growth drivers and attractive valuations. Investors who came into the year underallocated to real estate have been adding to their real estate exposure, and we're seeing that both in office and retail.

An echo of Sydney's 2024 institutional buy-up

The gap between high-quality and lower-quality office assets remains significant, with tenants prioritizing well-located, highly amenitized buildings. this is a really interesting case where the market narrative and the reality just aren't lining up. Boston Properties is a $9-billion company owning a portfolio of high-quality office buildings,and despite the name, it's not just Boston.

You've got New York at 25 per cent, San Francisco at 15 per cent, Washington, D.C. at 15 per cent, and smaller exposures to Los Angeles and Seattle. While Boston is a bit softer, when you're looking at what's actually happening in New York and San Francisco, these markets are performing much better than people realize.

The $30 billion data centre boom

AI-related infrastructure spending is creating a long runway for data centre owners and investors as demand for computing capacity continues to expand. According to Ji Zhang, we're seeing innovation, we're seeing job growth, and we're seeing that translating into demand for office space. That's leading to strong leasing activity in New York, with tight availability for office space pushing rents higher.

Blackstone Digital Infrastructure Trust is a really interesting play on the AI infrastructure theme, and it's a great way for investors to gain exposure to this growing industry.. They're not just focused on the data centres themselves, but also the fibre networks,the towers, the edge computing, and the entire supply chain that supports the data centre industry.

Who is the unnamed buyer?

We're seeing a broadening out from trophy assets to Class A assets in locations where we haven't seen that in many years. According to Ji Zhang,we're actually seeing a lot of office-to-residential conversions. We haven't seen meaningful new office supply, so in places like San Francisco and New York, these markets are getting quite tight.

According to BNN Bloomberg, Ji Zhang, portfolio manager of global real estate at Cohen & Steers,joins BNN Bloomberg to share her Hot Picks in global real estate. Artificial intelligence investment is creating new demand for data centre assets, while improving leasing conditions and limited new supply are supporting office and retail real estate.

Tehran's two-track response

Easing interest-rate volatility and constrained supply across multiple property types are supporting pricing power and asset values. According to Ji Zhang, we're seeing a really interesting case where the market narrative and the reality just aren't lining up. It's a $9-billion company owning a portfolio of high-quality office buildings, and despite the name, it's not just Boston.

You've got New York at 25 per cent, San Francisco at 15 per cent, Washington, D.C. at 15 per cent, and smaller exposures to Los Angeles and Seattle. While Boston is a bit softer, when you're looking at what's actually happening in New York and San Francisco, these markets are performing much better than people realize.