And then other sectors, I’d say, somewhere in between those top three sectors I mentioned, represent 50% of our global portfolio. And so what I would say is in better sectors where the fundamentals are good, the fact that rates seem to belong and seem to have reached a level and may be heading lower, we’ll see. I think they’ll stick around here given the short end. And at some point here, 12, 24 months from now, the Fed will start to take the short end down, that’s obviously positive. Because to your point, cap rate pressure is very tied to rates. And so if we’re at a point in the cycle where the risk of rates going much higher is off the table, that’s helpful to real estate. The other helpful pitch in real estate is you’re seeing a sharp decline in new supply.
So in logistics, for instance, we’ve seen a decline of new starts around 40%, 50%, depending on markets. Housing supply is down aggregately about 20-plus percent from where it was and you’re seeing it in hotels and other areas. And so if you think about coming out of this over time as investors, if you can invest in sectors where the underlying vacancy rates are low today, there’s going to be less building and interest rates are no longer a major threat. If the asset has been marked to sort of the new market, then we think there’s significant opportunity. And that, I think, is really the pitch. Today, the area we’re most active in is actually European real estate, particularly in logistics because the sentiment around European real estate is so negative.
And yet if you look at, for instance, rental growth in U.K. logistics, it’s incredibly strong. So I think we’re in a moment where everybody is extrapolating what’s happening in office buildings becoming incredibly negative about the sector, but that’s going to create some real opportunities. And to your point on debt, there will be needs for people to sell and to sell and inject capital because of the higher debt costs that are out there. So I think sector selection really matters as we talk about and then these tailwinds around rates leveling off and new supply coming down should be very helpful to the asset class over time.
Operator: We’ll go next to Brian Bedell with Deutsche Bank.
Brian Bedell: Great. Maybe you just talked about two of our fastest-growing platform, direct lending, I think you mentioned $100 million. And then also the energy transition platform, if you added all your products together, maybe if you could that I know it can be difficult because obviously, some of the infrastructure and energy products or a blend of transition and on core but I don’t know if you can size that. And if you think about over the next three years, I don’t know if you can execute a sort of a projection on where the size of those platforms could be in three years, not maybe just confident that they will be a larger share of your overall franchise or not?
Jon Gray: So I would say on the energy transition side, we’re in early days. we just are finishing off raising the $7 billion energy transition credit fund. We’re in the market with our energy equity fund, which we expect will be probably $4 billion plus. And then energy transition, energy is a meaningful chunk of our $37 billion infrastructure business. It’s probably one third of that capital but probably the fastest growing. If you went — and by the way, we also have embedded in our private equity business a bunch of energy transition investments there and in our core private equity business. So you would have to go through it. I don’t have the numbers handy is where this would be. But you’ve got a number of areas we’re deploying capital in energy transition.
