Real estate may be the world’s oldest asset class, but it never goes out of fashion. It houses the economy and has always been closely linked with people’s everyday lives. Making real estate investments takes a lot of work and dedication to get it right. In order to identify value and seek steady returns, investing through an experienced manager is key.

Invesco Real Estate is one of the largest real estate investors globally, and one of relatively few who are global – which makes them a little different to most other managers.
For 40 years, Invesco has been helping clients – traditionally mainly institutional investors, but lately broadened to DC investors, private wealth managers and private banks – unlock diversified real estate opportunities, with local experts on the ground in 21 markets globally. 

The work of Invesco has resulted in global assets under management totaling over USD 90 billion and a global workforce of circa 600 professionals dedicated to real estate investment management.

 

Behind the four successful decades lies a few key-characteristics.

One being platform stability. A process that has been fine-tuned with global consistency since 1983.

Another cornerstone is global coverage with global insights and local expertise on the ground combine so Invesco invests in the right markets at the right time.


Furthermore, Invesco prioritizes scale and expertise. From core to higher returning, in debt and equity, Invesco covers the full spectrum of real estate investing.


“I think boots on the ground is incredibly important. Real estate is a local asset class. You do not trade real estate on a screen. You trade it by having good contacts with the other market participants. We have that. We also cover a wide spectrum of different strategies from core to higher returning through to equity and debt, and also listed and unlisted,” says Simon Redman, Managing Director, Client Portfolio Management, and continues:

“It is unusual to have all of those combined within one firm. And we are also independent. We're not tied to an insurance company or a bank. It is our clients’ interests that motivate us. It is for our clients that we deliver performance. We do not have any other external influences. So, it is a pretty unique offering in terms of being a real estate manager.”


In addition to platform stability, global coverage and scale and expertise, ESG has risen in importance for Invesco’s investment, which is being driven by clients’ appetite to focus on sustainability. The company focuses on the financial implications of its decisions, and managing real estate for environmental and sustainability considerations improves investment performance as well as working towards its net zero targets.


“ESG is a valid driver for a few reasons. One is that you can actually create additional value by creating more efficient buildings that reduces occupational costs and therefore enables tenants to pay higher rents. Another is that you attract the right tenants. We focus on very high credit quality tenants. That tends to be big corporate occupiers however ensuring the right tenant mix in each of our buildings is key to success. They almost all have sustainability criteria today.

“And then the other aspect is just our ability to sell. When we invest in a building, we are always looking at how we exit at some point. We do not necessarily hold buildings forever and each property we own has its own strategic plan. Some of the most active buyers in real estate are the big pension funds and insurance companies, many of which have to adhere to rigorous/stringent sustainability criteria. They will not invest in a building unless it is sustainable or meets certain ESG standards”

“Therefore, by having sustainable buildings, you are increasing your buyer pool by ensuring that you have got some of the biggest institutional investors in that buyer pool. And that may add value as a result.”




“Therefore, by having sustainable buildings, you are increasing your buyer pool by ensuring that you have got some of the biggest institutional investors in that buyer pool. And that may add value as a result.”

 

With a proven track-record spanning over 40 years, Invesco Real Estate has demonstrated its ability to invest throughout the market cycles during this period and seeking to help their investors look for the right opportunities at the right time of the cycle.


“Real estate markets around the world are relatively uncorrelated, so they are not well correlated with listed asset classes. They're not even terribly well correlated with themselves. What drives risk and return is often local factors and the local economy. Local things like planning regulations.


Supply and demand. And so, by having a global real estate portfolio, you are also reducing volatility and risk, so it is even more stable. And if you put that in an overall portfolio where there’s a mix of listed asset classes, real estate can be a great stabiliser and seek to reduce your risk. And so, if I think about that in terms of numbers, when we look at our global strategy, the volatility of that, it's around 4 percent. That is incredibly low. When you compare that with what you see in equities and fixed income, it is lower than both by a huge margin. So that alone gives it a role within a portfolio,” says Simon Redman.


“From a Nordic perspective we continue to see strong demand for Invesco’s world class real estate platform, in particular for our European value add strategy led by Kevin Grundy,” says Stefan Behring, Head of Nordics, Invesco.


Read more about Invesco’s investment strategies.


This is a sponsored article from Invesco.


Nordic Property News

[email protected]