No Alternative: How Mark Granter is shifting perceptions of Alternative sectors

Ten years ago Mark Granter managed the sale and lease back of a large portfolio of poultry assets. He didn’t know it at the time but that unusual transaction was the start of a new phase in his career that combines his interest in complex deals and passion for building lasting client relationships.  

“It was probably the catalyst for where I am today,” Mark explained. “At that stage I had no idea that food infrastructure and other Alternatives—like living sectors, healthcare, data centres, social and industrial infrastructure, and energy and renewables—were going to emerge into something like it is today.” 

That first sale led to other large sales and leasebacks—flour mills and bakeries—which then led to selling a data centre portfolio. 

“All of a sudden, the penny dropped that what I was doing was selling and working in Alternatives. I could see there was growing interest and opportunity but at that point it hadn't become such a focus for investors that it is now,” he said. 

Building trust for longevity   

Mark, who is the Executive Managing Director for Alternatives Capital Markets and Client Care for Pacific, says he has always enjoyed working on complex sales and projects with a long gestation where his client-focused project management approach delivers the best outcomes.  

“I love forming genuine relationships with people, it’s never about how I can ‘get something’ out of it. I actually want to get to know the client and their business to the point where I enjoy their company and like spending time with them, which then leads to a deeper understanding of who they are, what they're trying to do and how I can help,” Mark said. 

“Any advice that I give a client is advice that's in their best interest, not my best interest. It might cost you in the short term, like if a client wants to sell but you advise them it’s not a good time, but in the longer term you are building a relationship and positioning yourself as a trusted advisor and that pays off for everyone.”

Playing the long game has been integral to Mark’s longevity in the industry. He joined CBRE in 1989 and has held many roles within the company including Managing Director of Victoria, COO and Head of Capital Markets. He says being open to new opportunities and never losing his sense of curiosity has been a major driver of his career.  

Changing perceptions of Alternatives  

A decade on from his first foray into Alternatives Mark has seen a lot of change and growth but one of the biggest misconceptions about the sector has remained. 

“To most people ‘Alternatives’ has a connotation that it's not mainstream and therefore it's risky,” he explained.  

“Especially in the early days, people thought it was a bit more risky and therefore you could get a higher yield based on the risk return of that sector but that's actually not the case. In fact, it's now become the opposite, Alternatives have become mainstream and an important part of a diverse investment portfolio.” 

While momentum was already building, Mark said with a change in economic conditions, partly brought about by COVID, he saw an opportunity to accelerate the trajectory of Alternatives.  

“The traditional sectors of office, industrial, retail and, to a lesser degree hotels, during the past five years have, unfortunately, had some structural challenges and performance issues,” he noted. 

“If you look at what happened during COVID, we saw the growth of online retail versus bricks and mortar, and although we were starting to see flexibility introduced to the workplace the office sector was turned on its head with the sudden rise of working from home.” 

Mark noted that Alternatives were, up until recent times, mostly ignored by larger investment funds in Australia. But the reduced performance of traditional sectors meant a lot of investors were caught with an overexposure, particularly in office which is when Mark and his team were able to demonstrate the benefits of moving some investment into Alternatives. 

“The demand factors were affecting the traditional sectors adversely and then conversely the demand factors of Alternatives were going in a positive direction,” Mark explained. “There is a significant opportunity for investors with the rise in demand for healthcare, childcare, and retirement in the living sectors. The next emerging opportunities relate to data centres, because of AI and changes in technology, as well as renewables as part of the transition from brown to green energy,” he added. 

The future is Alternatives  

As investor interest in Alternatives continues to build, Mark says he sees so much opportunity for the sector.  

“Alternatives are not niche, they are an essential part of a strong, resilient portfolio of investment. In Australia we are still in the early stages but we are catching up and if you look at what is happening overseas, there is a lot of room for growth in the next 10 to 15 years,” he explained. 

“For example, in America build to rent, which is what they call multifamily living sector, is their biggest investment sector outside of office. And in Europe the living sectors represent circa 25% of the large investment funds’ total exposure in property. Life sciences, healthcare and self-storage, are all very big sectors in the US already so as Australia continues to grow, these sectors will also continue to grow and become much more important.”