Asset over thematic: Centuria’s Andrew Essey warns against ‘blanket strategies’ as global capital eyes Australia

Investors chasing macroeconomic themes at the expense of fundamental real estate analysis risk being caught out as the property market enters a sharp post-recalibration upswing, Centuria Capital’s Chief Investment Officer Andrew Essey has warned.

Speaking at the Capital 2026 conference at the Hilton Hotel in Sydney, the CIO of the ASX 200 listed real estate manager said that while structural tailwinds remain critical, relying solely on broad sector trends represents the single biggest mistake allocators make when trying to deploy capital at scale.

“When you’re deploying at scale… you can get caught up with the thematic,” Essey told the conference. “But that might have the propensity to limit the focus on the individual real estate asset itself. If the thematic slows, cools, or potentially you got something wrong, the reality is the letability of the asset through cycles is what matters.”

The warning comes as global and domestic institutional capital aggressively pivots back to Australian shores, with the nation now running “neck and neck” with Japan as the most desired real estate jurisdiction in the Asia-Pacific region. According to Essey, offshore institutional allocations into Australian property ticked up roughly 12% over the last year, compounding significant growth from prior periods.

The “pre-2022” anchoring that plagued property valuations during the height of the Reserve Bank of Australia’s aggressive interest rate tightening cycle has finally dislodged. Market participants have rebased their expectations, creating sharp valuation anomalies that Centuria is actively looking to exploit.

Rather than buying blindly into blanket sector plays, Essey highlighted two high-conviction subsectors currently offering “high-octane” risk-adjusted returns:

While parts of the broader office market face structural headwinds, Centuria has identified a major valuation rerating in the Sydney CBD. Specifically, the group is aggressively targeting prime assets positioned on or adjacent to newly minted infrastructure corridors.

On the opposite end of the stabilisation spectrum sits Large Format Retail, a sector enjoying a severe supply-and-demand crunch.

While retail investors remain cautious, institutional allocators—including global sovereign wealth funds, major offshore institutions, and domestic superannuation funds—are moving quickly to execute large-scale transactions across the office, industrial, retail, and living sectors.

When pressed on what conventional wisdom is about to be proven wrong in 2026, Essey pointed back to the market’s over-reliance on uniform strategy plays.

“What will people get wrong? Again… that thematic play,” he said. “And what you can get wrong is just playing the thematics and backing a blanket strategy, but not looking under the next few layers to really get down to the core real estate investment.”

For wealth allocators tweaking their property portfolios for the remainder of the year, Essey’s advice is simple: value the operator’s cyclical history over the sector’s marketing pitch.

“Really focus on your manager,” Essey urged. “Look how they’ve performed through cycles, because at this point of the cycle, there are really interesting opportunities to buy at a very attractive entry point that have tailwinds for future success.”