- Laboratories and offices are ‘sticky, long-term investments’
- Hyat also sees potential in senior housing as population ages
The biotechnology industry’s growth is providing the chance to attain attractive returns on commercial property in markets from Boston to Munich to Shanghai, according to Taimur Hyat, chief strategy officer for PGIM, Prudential Financial Inc.’s $1 trillion asset-management arm.
“Biotech is causing a revolutionary change in the type of real estate opportunities we are seeing,” he said in a televised interview Tuesday with Bloomberg’s Betty Liu and Matt Miller. Laboratories and offices can be “very sticky, long-term investments,” given the demand for space.
Biotechnology has surged in recent years as record numbers of drugs have been approved, including blockbuster therapies for major illnesses. The Nasdaq Biotechnology Index climbed 182 percent from the end of 2010 through Monday’s close, compared with the 64 percent gain of the S&P 500 Index.
Insurers and asset managers are seeking alternative investments like real estate to counter low yields in the bond market and a slump among hedge funds. The aging population is another trend that could help property investors, Hyat said, citing demand in the U.S. and possibly abroad.
“You see senior-housing opportunities for the elderly in the U.K., in Japan, and potentially in China,” he said. “We focus on the next five, 10, 15 years.”
PGIM oversees money for clients including 136 of the top 300 global pension funds, according to its website.