In a low interest rate environment, this strategy offers investors the ability to access a range of specific European markets and growth sectors. The strategy targets long-term, relatively stable income and capital growth.
There is a focus on high-quality assets in prime locations. We aim to capture opportunities in a range of markets, which provide different return profiles due to varied positions in the occupier and investment market cycles.
Our experience, reputation and deep local relationships give us a significant competitive advantage in sourcing transactions and off market opportunities for our clients.
Portfolio assets have relatively durable and growing income that can also maximise liquidity when desired. Income is expected to comprise around two-thirds of the total return.
We focus on high quality assets in eight key markets and across the office, retail, industrial and rental residential sectors.
The strategy aims to provide a diversified total return composed of a steady distribution yield and capital growth. Specifically, a long-term net target total return of c. 6-7% p.a.
Invesco Real Estate’s investment philosophy comprises two fundamental principles: (1) maximize the predictability and consistency of investment returns and (2) minimize the risk of capital loss.
To implement this, we have developed a disciplined, team-based system that has yielded consistent results and has the potential to be reproduced over varying phases of the real estate investment cycle.
The strategy currently targets real estate situated in eight countries within our qualified investment universe as defined by the “House View” to facilitate the strategy. The countries are the UK, France, Germany, Poland, Spain, Sweden, Italy, and the Netherlands.
We believe eight countries provide the optimal relationship between diversification and structuring complexity. The investment team remains active in reviewing its geographic and sector allocation to ensure it provides an optimal composition of assets that align with the strategy of the fund and deliver results.
While each mandate is based on defined investment objectives, the foundation of our investment process consists of three interactive phases, namely: strategic planning, operational execution and performance evaluation.
Extensive market coverage
Invesco Real Estate has 519 employees worldwide at 21 offices and 16 countries as of 30 June, 2019. Our European business has acquisitions, asset management, research and portfolio management professionals in seven offices across the region. This gives us ‘boots-on-the-ground’ across the target investment markets.
We believe our in-depth knowledge about the regional markets and local presence enhances our ability to source off-market deals and execution capabilities.
We believe our investment team represents one of the most skilled, stable and experienced groups in the real estate investment business. Our global senior management team have an average tenure of 14 years at Invesco and 27 years’ industry experience.
The team has had extensive experience managing a variety of investments across multiple market cycles. This collective experience will be brought to bear in the screening, selection and execution of investment strategies for our clients.
Deep local relationships
Invesco Real Estate possesses a significant competitive advantage in sourcing transactions, many of which are proprietary in nature. Our team of experienced investment professionals has developed a ‘quality of capital’ reputation that provides sellers with certainty of close.
We believe our ability to access attractive, off-market opportunities for our clients arises from our broad investment capabilities and strong reputation in the market.
We operate a cross-functional team philosophy with highly skilled investment teams being used on a variety of different mandates.
For example, the transaction team in Paris is responsible for acquiring assets for all our mandates which invest in France. The result is that IRE has teams of specialists rather than generalists, which adds more value to the investment process.
The exception is the portfolio management team and fund operations team where individuals are dedicated to specific accounts.
Invesco Real Estate – 2020 outlook
Balancing growth opportunities with risk mitigation is going to be key.
Building room for residential property
The UK Private Rented Sector offers an attractive opportunity for investors seeking identifiable and reliable cash flow characteristics.
Taking a global approach to real estate investing
Why are increasing numbers of investors turning to global real estate?