Real estate investment has delivered attractive risk-adjusted returns over the last decade, supported by economic recovery after the financial crisis, and highly supportive credit conditions. The impact of emerging socio-political trends on different real estate asset classes has been accelerated by the global Covid pandemic, with sustainability now a key focus given real estate’s carbon footprint, and its impact on social well-being and the way we live and work. At the same time, inflationary pressures and normalisation of interest rates pose economic challenges in a market which has seen significant yield compression in favoured asset classes. We adopt a holistic view of the market to address these challenges and opportunities through a strategy designed to optimise outcomes across these axes of impact and return. Based on our experience in both Core and Value-Add investing, we believe that a Value-Add strategy which incorporates ‘change of use’ projects to reconfigure the building blocks of different asset classes is best-placed to deliver both impact and double-digit return objectives. We call these projects Value-Add +.
In addition, the latest vintage of our European real estate strategy will be designated as an SFDR 9 impact fund with impact objectives and measurement at the core of its investment strategy, leveraging on our experience and commitment as a firm to make a positive, measurable contribution to accelerate positive changes for society.
The Role of Real Estate in a Sustainable Future