Patrick Kanters, MD Global RE, APG Asset Management

Sure, sure. Well, APG, I think it's important to mention that two years ago, APG's largest client actually decided to increase its investment to real estate. It was around eight percent, and decided to increase to ten percent. Given that we really advise them that the next years to come, so last year and also the next two years, would be, looking back, would be very strong vintage years. We're not saying that the market has corrected extremely strongly, but going forward, we definitely think that entering the markets as we did last year, and also are still working on this and next year, will provide very decent returns.

Yeah, the listed sector obviously over the last month has corrected very severely. Where it was trading pretty much around NAV in the European market, or even a slight premium, it has now corrected and is showing large discounts to NAV. So all in all, if you would compare to the listed markets, the listed markets provide you a little more value, of course very much depending on specific stocks, but generally speaking, of course the listed market provides a long-term value which is somewhat higher than on the non-listed side.

We think on the real estate side it's very much a temporary thing happening. It is a reaction to capital market events, and of course these capital market events will also affect real estate, so it might also affect the income-generating nature since consumer confidence has declined. But as in any panic time, asset classes are moving in sync just like we're seeing right now, and I think eventually people will take a more fundamental look at real estate again, and real estate will correct in a positive way to the values that they really embed over the longer term.

No, no, we have a fully integrated approach. So we actually don't differentiate between listed or non-listed. We just want to take a view on what is the best investment portfolio, what is the best management, what is the best governance structure. And in certain sectors — the best example that I often use is retail shopping centers. The best shopping centers, and also averagely speaking, the better shopping center operators are in the listed environment, and therefore we are more heavily invested on the listed side. On other strategies, the non-listed side might offer better opportunities, but we take a long-term view. And by nature being a real estate investor, you have a long-term view because also on the non-listed side it's highly illiquid, so by nature you are a long-term investor. While taking that long-term investment horizon, it really doesn't matter whether you are listed or not listed. The risk-return reward is the same, provided you measure long term and listed is a full proxy for direct real estate.

Yeah, well, within the European market, stock picking and locations have always been important, but it's getting even more important than before. And it has a lot to do with the fact that, of course, we do not see a strong population growth in most European markets. So it's really about specific cities, about specific locations within those cities that can still be very promising. On the other hand, there is a large amount of more secondary real estate in those cities that will show declining populations that are severely at risk.

It's an excellent initiative to make sustainability more measurable. Anything that you want to manage should be measurable. And also it's driven by simplicity, so they only provide a few very key indicators. Well, successful also because in the Global Real Estate Sustainability Benchmark, which we took the initiative on, we have used these similar best practice recommendations on sustainability in our surveys to create a global sustainability benchmark. So we try to adopt defined metrics in the benchmark, not to come up with even more definitions or even more metrics, so to keep life as simple as possible.

Thank you.