Invesco's real estate investment strategies
Capabilities

Real estate investing strategies

Discover our broad range of real estate strategies, with investment opportunities from around the globe.

Our real estate strategies

Uncovering unique real estate opportunities around the globe requires viewing the asset class from every possible angle. Our three-dimensional view of real estate — throughout the capital stack and across the risk/return spectrum—combined with all the aspects of our business work together to create a robust picture of each investment opportunity. Invesco Real Estate has actively invested from core to opportunistic in debt and equity for over 40 years.

Our growing business in Europe, North America and Asia via separate accounts, commingled vehicles and mutual vehicles strengthens our ability to underwrite and execute deals. As we use innovation to grow portfolios, we are continuously identifying emerging sectors and launching new fund structures to benefit investors.

  • Real Estate Core Strategies

    High quality direct real assets Focus on stable income Daily pricing
    Provides exposure to a portfolio of over US$30 billion, with around 230 high quality direct real estate assets. Aims to provide 40-60% of gross total returns in income, which is generated by high quality credit leases. Combines global real estate investments, listed real estate, cash and cash equivalents for liquidity.

    The Invesco Global Real Estate Strategy is designed to provide investors with daily pricing and liquidity while accessing direct global real estate investments.

    The strategy allocates approximately 70% to high quality direct real estate, and 30% to real estate securities and cash/cash equivalents. The idea is to deliver stable income, diversification and strong relative performance – all while offering daily liquidity and pricing. This makes the strategy particularly relevant for smaller pension fund and insurance investors who wish to gain access to the same assets as large institutional investors.

    Deep local relationships Focus on income Globally diversified portfolio
    Our experience, reputation and deep local relationships give us a significant competitive advantage in sourcing transactions and ”off-market” opportunities for our clients. Our focus on “high-quality” assets should provide durable and growing income over time while also proving relatively resilient to any downturns. The four underlying strategies have exposure to around 200 high quality investments worldwide.

    GDRE is a proprietary strategy only available from Invesco. As such, it benefits from our global platform and regional strategies. More specifically, it invests in four open-ended Invesco Real Estate strategies, two invested in the US (core and income) and two core strategies in Europe and Asia. We aim to meet our return objectives by constructing a balanced, diversified portfolio of high-quality real estate that can generate durable income. The strategy offers a low correlation to stocks and bonds and a higher correlation to inflation.

    Deep local relationships Income focus Diversified portfolio
    Our experience, reputation and deep local relationships give us a significant competitive advantage in sourcing transactions and opportunities for our clients. We focus on assets with high occupancy and with high-quality tenants. Income growth is driven by indexation and active leasing momentum. Our portfolio is well diversified across European countries and the office, retail, logistics and residential sectors. Allocations anticipate secular trends and drive performance.

    In our European strategy, we focus on high-quality assets in prime locations. We take an active approach to portfolio management to create durable and growing NOI (net operating income). We aim to capture opportunities in a range of markets. These provide different return profiles due to varied positions in the occupier and investment market cycles. The strategy is 5-star GRESB* rated and SFDR Article 8 compliant.

    Deep local relationships Income focus Diversified portfolio
    Our experience, reputation and deep local relationships give us a significant competitive advantage in sourcing transactions and off-market opportunities for our clients. We aim to construct a well-diversified, income-oriented portfolio with income accounting for at least 50% of returns. Invesco Real Estate focuses on high-quality assets in seven key markets, including Australia, Japan, South Korea, Hong Kong, China, Singapore and New Zealand. We have expertise across the office, retail, industrial and residential rental sectors.

    The strategy offers the possibility to invest in a broadly diversified real estate portfolio. The focus is on high-quality, high-yield properties with long-term leases in gateway markets in the Asia-Pacific region. We aim to meet our return objectives by constructing a well-diversified and balanced portfolio of high-quality real estate, which is focused on total return and long-term income.

  • Real Estate Debt Strategy

    Offering stable, high-yield income Established excellence Open-ended structure
    Our strategy aims to offer a stable, high-yielding income stream with significant asset-backed downside protection. Established team with a track record starting in 2013, and 20+ average years of experience. More than €1.5bn of loans originated across a number of European markets. Innovative approach to an otherwise illiquid asset class. The strategy’s open-ended nature allows for greater liquidity than otherwise available.

    This direct lending strategy is focused on “high-quality property”, distributable current income and a ‘credit-over-yield’ approach to prioritise capital preservation. The strategy intends to focus loans against assets with strong ESG credentials. The strategy prioritises lending on sustainable assets. This is IRE’s 10th open-ended strategy globally, so we are well placed to manage liquidity for institutional investors.

  • Real Estate Higher-Returning Strategy

    Relative value Fundamental value creation Risk discipline
    Focus on optimising the capital structure entry point, diversifying execution across markets and product types, and leveraging the unique Invesco platform. Position one step ahead of competing capital and anticipate the acquisition expectations of core purchasers in the future. The foundation of value creation is a bottom-up business plan for intensive asset management of real estate. Invest with a quality and location bias with appropriate use of leverage.

    With an emphasis on relative value and the flexibility to invest across the full capital structure, our value-add strategies are positioned to act with speed and conviction to take advantage of acquisition opportunities that arise during a period of economic uncertainty in Europe.

    We seek attractive risk-adjusted returns consistent with sustainable investment principles, focusing on sectors in structural transition with opportunities to improve or create next generation real estate.

    In addition, we selectively invest in real estate operating companies where we believe there is compelling value to be created from vertical integration in an increasingly operational environment.

  • Listed Real Estate Strategy

    Income potential Diversification Volatility
    Potentially higher levels of income versus traditional equity and fixed income asset classes. Historically lower correlation to broader equity markets. Traditionally less volatility and downside capture compared to real estate equity-only approaches.

    Invesco’s Global Real Estate Income Securities (GREIS) strategy invests across the entire real estate capital structure – i.e. listed equity, Commercial Mortgage Backed Securities (CMBS), corporate debt and preferred equity. The goal is to produce equity-like returns and a high level of current income, while mitigating against volatility and drawdowns.

  • Real Estate Sector Specific Strategies

    Diversification Ongoing trends Experience & reputation
    Our strategy can potentially enhance long-term portfolio diversification due to its low correlation to other asset classes, such as equities, fixed income and other EU real estate sectors. Ongoing trends such as population growth, urbanisation, affordability, and changes in lifestyle are boosting residential real estate and making it increasingly attractive for institutional investors. By having a strong reputation and an experienced team, we are able to access a stable, long-term pipeline and an established network of local development partners in all preliminary target markets.

    In Europe, urbanisation continues and the number of households is growing. The private rented sector (PRS) offers stable, regular income and a low correlation to other real estate sectors in the EU. It is also benefitting from the growing institutional investment market in Europe.

    Our pan-European living strategy aims to take advantage of the long-term housing supply/demand imbalance and offers institutional investors the potential for long-term income generation.

    Growing sector Track record Diversification benefits
    The hotel sector benefits from increasing tourism and business travel in key gateway cities across Europe. Managing hotel strategies since 2006, Invesco Real Estate was one of the first to develop a dedicated European hotel strategy. We focus on high-quality, international hotel brands across Europe. This strategy can help diversify mixed asset client portfolios.

    Hotel real estate is an established sector, providing long-term income potential from high quality assets in central locations. Supply/demand fundamentals in the sector remain supportive of above-inflation ‘Revenue Per Available Room’ (RevPAR) growth in key cities across the continent. Our goal is to select investments that provide the optimal combination of market, micro location, brand and operator to drive above market revenue growth and create long-term and sustainable value.

    Instant diversifier Increasing supply / demand imbalance Excellent reputation
    Our strategy can help enhance long-term portfolio diversification due to its low correlation to other asset classes, such as, UK equities, gilts and commercial real estate. The UK has a relatively fast-growing population. We aim to take advantage of the long-term housing supply and demand imbalance that this creates. With our strong reputation and experienced team, we can access a stable, long-term pipeline. This is an important differentiator in the sector.

    Our UK residential strategy is focused on providing stable, long-term income. It does this by taking advantage of the structural supply/demand imbalance across key cities and towns in the UK. It provides high-quality rental accommodation for the UK’s growing population.

Podcast: Vintage Year Investing

Podcast Podcast: Vintage Year Investing

In this 12-minute podcast, we look at what today’s interest rate environment means for real estate investors. Find out how it is creating opportunities in the “value-add” space.

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Footnotes

  • *Source: GRESB, as at 2022. As real estate investors and property owners utilize ESG reporting, the Global Real Estate Sustainability Benchmark (GRESB) provides transparency and consistency for related standards and reporting.

Investment risks

  • The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

    Property and land can be difficult to sell, so investors may not be able to sell such investments when they want to.  The value of property is generally a matter of an independent valuer’s opinion and may not be realised.

Important information

  • All data is provided as at 31 December 2023, unless otherwise stated.

    By accepting this material, you consent to communicate with us in English, unless you inform us otherwise. This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. Views and opinions are based on current market conditions and are subject to change. Further information on our products is available using the contact details shown.

    EMEA3557073/2024