Relative value can be seen in all major real asset sectors after a period of contraction triggered by interest rate spikes and dislocation, Dexus (ASX:DXS) said in its fourth quarter Australian Real Asset Review on Monday.

Projections suggest returns in the range of 7% to 9% over the coming 12 months, supported by easing inflation, resilient business confidence, and a pivot toward private-sector-led growth.

The industry is experiencing a tailwind with initial yields higher, demand firmer, and new supply constrained, compared to two years ago. The Procore/Property Council Industry Sentiment Survey in September showed improved growth expectations across major sectors. The GDP is forecast to grow, transaction volumes are rising, and deal flow is set to accelerate.

A looming shortage of prime assets means demand could move significantly before it affects returns. This represents a structural opportunity to reposition portfolios for growth for investors.

Well-located central business district offices, dominant retail, and living sectors are well placed to ride a cyclical recovery. Meanwhile, occupiers are gravitating toward premium assets in core locations with strong amenities and environmental, social, and governance (ESG) credentials.