Commercial real estate: Five things we believe, five we’re debating
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Real estate
Invesco Global Direct Property Fund
Our latest real estate fund offering, designed specifically to help DC scheme members gain access to global, direct real estate
Daily liquidity
This fund is for DC investors only. Its structure seeks to deliver daily liquidity whilst seeking to avoid the fund suspension challenges associated with UK property funds.
Global opportunities
With 95% of investible real estate lying outside the UK, it makes sense to take advantage of the wider opportunities a global real estate approach offers.
Thematic approach
Our investment methodology involves studying how human behaviour evolves and what this means for real estate – from demographic shifts to the rise of technology.
Integrating ESG methodologies
Historically, buildings with strong environmental, social and governance credentials are more likely to outperform.*
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* Whilst the fund manager considers ESG aspects they are not bound by any specific ESG criteria and have the flexibility to invest across the ESG spectrum from best to worst in class.
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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.
Investment risks - please click here to view all specific risks. For complete information on risks, refer to the legal documents.
Case studies: bringing our investment themes to life
Investing into a global opportunity
Healthcare
Invesco Real Estate owns a large number of medical offices in the US, including twenty properties in the “Sunbelt region” of Dallas, San Antonio, Nashville, Denver, Los Angeles, Tampa, and South Florida, as well as nineteen properties across twelve markets in the Caddis portfolio. These properties are located adjacent to hospital campuses in prominent metro areas, creating strong locational demand among tenants.
This demand is expected to grow over time due to changing demographics in the US. In the next 20 years, the number of Americans aged 75 and older will expand by over 20 million, more than doubling in size. Accordingly, healthcare spending in the US, which already represents nearly 18% of GDP, will only increase further. This, combined with the country’s privately funded healthcare model, creates a compelling opportunity for real estate investors.
Manufactured Housing
At Invesco Real Estate, we closely monitor how people around the world consume, live, innovate, and connect with one another. Factors such as demographic shifts, climate change, and technological advances significantly impact how we use and invest in real estate.
The demand for housing in the US remains high, particularly as the population ages and centralizes in residential communities. For real estate investors, this has created a sustainable, long-term investment opportunity.
Investing in Longview (Portland MSA), WA
The tranquil suburb located just north of Portland comprises 130 sites and is 100% occupied. The community is conveniently located near highways and essential services. The average household income within a 1-mile radius is $133K, translating to an 11% rent-to-income ratio.
This high-quality, 4-star, age-restricted manufactured housing community was sourced by Invesco Real Estate in mid-2024 off-market in a strong suburban Portland submarket with stable growth trends.
Land Lease Communities
The growing income stream from land lease communities (LLC) investment opportunities has enabled Invesco Real Estate to deliver a key partnership in the Stockland Land Lease Partnership in New South Wales and Queensland, Australia. The demand for these communities, where residents own the home but the operator owns the land, creates a steady income stream with low annual turnover and minimal vacancy risk.
Invesco Real Estate leveraged Stockland’s expertise in operating and developing LLCs to negotiate positive returns during the first five years of investment, commensurate with a develop-to-core investment. The portfolio consists of 1,191 homes across three communities, with this strategic partnership providing a further pipeline of investment opportunities.
Logistics
The logistics sector has seen huge growth in recent decades, driven by the shift from bricks-and-mortar to online retail. Companies need more warehouse space to store goods for online retail, and the distribution networks involved in transporting parcels from A to B also need somewhere to store and process them along the way.
Namansan Logistics Centre, Seoul
In 2018, Invesco Real Estate sourced a rare opportunity in Seoul, acquiring a prime logistics development project. The asset was secured as part of an off-market deal, made possible by our strong connections and market experience.
The building was completed in 2021 as a new, innovative, multi-story logistics facility. The opportunity was attractive for several key reasons:
- High-quality asset: The building is brand new, with seven levels of storage and two levels of cold rooms. It is designed to modern warehouse specifications in terms of ceiling height, bearing load, ramp-up, and building quality.
- Prime location: The asset is located about sixty minutes from the capital, enabling three deliveries per day. It is also close to Wolgotpogu Port and Incheon Container Terminal.
- Supply/demand factors: The area has a low vacancy rate and a limited supply of logistics facilities. This, combined with the above factors, allowed us to prelease the property to the largest e-commerce operator in Korea before construction was completed
Senior Living
In August 2024, we closed an off-market opportunity to acquire a 33% minority stake in OpCo, a senior living operator founded by Caredoc, Korea’s leading caregiver matching platform. This strategic partnership leverages Caredoc's expertise to expand into senior living operations, with IRE securing a portfolio of seven seed assets managed by OpCo, generating stable cash flow from Year 1. Korea, the fastest aging society among OECD members, presents a fragmented senior housing market with institutional quality assets accounting for less than 0.1%. This investment positions IRE as the first institutional investor in Korea’s growing senior housing sector, offering a first-mover advantage.
Sustainability: our net zero initiatives
DC members may be focused in aligning their pension pot with their personal values. While sustainable buildings can historically carry a rental premium, real estate provides potential opportunities for investors to reach their personal sustainability goals while also enhancing their return potential.
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Private credit 
Why complement direct lending with real estate debt?
Private credit, including real estate debt and direct lending, may offer diversification and lower volatility, making it potentially an attractive option for investors seeking optimized portfolios.
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Footnotes
*Source: as at 31 December 2024.
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 illiquid and difficult to sell, so the fund may not be able to sell its investments when desired and at the intended price. The value of property is generally a matter of an independent valuer’s opinion and may not be realised. Real estate investments are typically not listed on regulated markets and need to be valued via the application of appropriate models (potentially applied by independent experts): this may lead to inaccurate valuations which may not be reflected into transaction prices.
Changes in interest rates, rental yields, FX rates, market trends and general economic conditions may result in fluctuations in the value of the assets and of the fund and in the level of cash-flows generated. Real estate investments are exposed to counterparty risk, which is the risk that a counterpart is unable to deal with its obligations.
The fund may use derivatives (complex instruments) and borrowings, which may result in the fund being significantly leveraged and may result in large fluctuations in the value of the fund. Real estate investments can be exposed to new sustainability-related regulatory requirements and trends that may negatively affect the value of those assets which are not compliant and can envisage significant costs to be invested to comply or to simply improve their sustainability profile. In addition, real estate investments can be also significantly exposed to negative economic effects stemming from climate change, natural disasters and the general preference of investors for assets with better sustainability features.
Real estate investments are labour-intensive and present a significant amount of human/manual inputs and activities, hence potentially exposed to several types of operational risks that may affect areas such as administrations, operations, reporting and others. The underlying funds might make use of debt to finance investments which may result in such fund being more leveraged and may result in greater fluctuations in the value of the fund. Many Real Estate investments are illiquid, meaning that the fund may not be able to sell them quickly at a fair price and/or that the redemptions may be delayed due to illiquidity of the underlying investments.
If on any given Redemption Day of the Sub-Fund, the applications for redemption of units of the Sub-Fund represent in aggregate more than: (i) 3% of the Net Asset Value of the Sub-Fund per calendar month, (ii) 5% of the Net Asset Value of the Sub-Fund per any rolling 90 calendar days period, or (ii) 20% of the Net Asset Value of the Sub-Fund per any rolling 356 calendar days period, IMSA may decide to (a) start applying the Monthly Investor Limit (as described hereafter), (b) cancel all requests received on such day, and/or (c) decide that no further applications for redemptions shall be accepted until the first redemption day of the following calendar month or until further notice. Any such decision will be published on the Website of the Sub-Fund (https://www.invesco.com/gdpf/en/literature.html). IMSA also reserves the right (irrespective of whether any limits have been exceeded) to limit the applications for redemption of units of the Sub-Fund to a percentage between 2% and 5% of each unitholder’s designation account per calendar month (the “Monthly Investor Limit”). Further to this where redemptions have exceeded lower redemption limits (as may be determined by IMSA), IMSA may decide that no further applications for redemptions or conversion shall be accepted until further notice.
Important information
All information is provided as 31 December 2024, sourced from Invesco unless otherwise stated.
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.
Investors should consult a financial professional before making any investment decisions if they are uncertain whether an investment is suitable for them. Please obtain and review carefully the Offering Memorandum relating to the Interests described herein before investing. Invesco makes no representation or warranty, expressed or implied, regarding any prospective investor’s legal, tax or accounting treatment of the matters described herein, and Invesco is not responsible for providing legal, regulatory or accounting advice to any prospective investor.
For more information on our funds and the relevant risks, please refer to the Offering Memorandum, the Annual or Interim Reports, and constituent documents (all available in English). These documents are available on the product literature page: https://www.invesco.com/gdpf/en/literature.html. A summary of investor rights is available in English from www.invescomanagementcompany.lu. The management company may terminate marketing arrangements.
The fund, as a Reserved Alternative Investment Fund domiciled in Luxembourg, is eligible for Well-Informed Investors (as defined in the Luxembourg Law dated 28 July 2023) and marketing in the EEA is permitted to Professional Clients only. The fund is a dedicated Luxembourg open-ended unregulated fund. It qualifies as an alternative investment fund (AIF) managed by Invesco Management S.A. (IMSA) as external alternative investment fund manager (AIFM).
Further information on our products is available using the contact details shown.
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