Property investors to look towards luxury offices, smart buildings, mixed-use developments: Hines

LUXURY offices, smart buildings and mixed-use developments are among the global real estate trends identified by property investment firm Hines for 2022.

After almost 2 years of working from home, some companies are itching to build stronger teams and collaborative cultures among their employees through hybrid or on-site work arrangements, said Laura Hines-Pierce, Hines' newly appointed co-chief executive officer (CEO).

"We're seeing focus on the highest-end trophy office spaces, because that's the type of space employees would really want to come back to," she said. This includes spaces like One Museum Place in Shanghai, One Vanderbilt in New York City and the Salesforce Tower in San Francisco, she noted.

"Tenants want to be there, and I think investors want to own trophy offices, because they see their long-term value," she added.

She also added that Hines is providing value-add services such as training and hospitality programmes to boost customer experience in its luxury offices.

"Beyond that, we're continuing to partner with our largest clients and tenants. We discuss what's important to them, and how we can help them to solve their individual challenges," Hines-Pierce said.

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Among both tenants and investors, there is also growing demand in mixed-use developments for the convenience and diversification of income stream that they offer.

Mixed-use developments is also an asset class that Hines is looking towards, she noted.

In technology and innovation, Hines-Pierce aims to be at the forefront of change by incorporating artificial intelligence and machine learning into Hines' developments. The company will also look to "future-proof" such assets by continuously finding ways to reduce the buildings' carbon footprint - both in the development process and in day-to-day operations.

"The real estate industry is changing faster than anyone has seen it change in the past. I think it has changed more in the last 5 years than it had in the previous 30 years," she said.

On the Asia-Pacific region, she said: "There's really a lack of investable for-rent residential products in the region. Over the years, we've done quite a bit of investment in industrial logistics as well as offices. So we're looking across the spectrum, but we certainly believe that built-to-rent is an opportunity looking forward."

She added that there is "a healthy appetite" for mixed-use developments in the Apac property market.

On Tuesday (Feb 8), Hines announced the acquisition and development of Yatomi Distribution Centre as its first logistics move in Japan. Located near the Port of Nagoya, the buildings will target both dry and cold storage users, last-mile logistics providers and major regional distribution users, Hines said.

In April last year, the company launched Hines Asia Property Partners, an open ended fund with US$2.3 billion in buying power.

To date, the firm has invested 50 per cent of its funds across developed markets in Asia.

Founded in 1957, the Houston-based company currently has presence in 27 countries and over US$83.6 billion in assets under management. It invests mainly in residential, industrial, retail and office spaces.

The company also announced on Friday Hines-Pierce's promotion to co-CEO, to serve alongside her father and incumbent CEO Jeff Hines. Hines-Pierce has been Hines' senior managing director in the office of the CEO since 2020, and previously served as the Houston-based company's transformation officer. This also makes Hines-Pierce the company's first female CEO.

"I am really very focused on diversity in the real estate industry - not just gender diversity, but also more broadly," she said.

As co-CEO, she will continue to support efforts of the company's Women's Network - which aims to increase the volume of female applicants and the percentage of women in leadership at the firm - as well as champion for inclusive recruitment practises, among other things.