What is real estate?

Real assets represent one of the fastest growing segments of the alternative-investments market, which includes hedge funds and private equity. 

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

What assets can you invest in?

Real estate investments include both recognisable properties, such as:

• Apartments
• Offices
• Shopping malls
• Industrial logistics warehouses

And growing areas, including:

• Data centres – Infrastructure that stores, processes and distributes large amounts of data
• Self-storage – Units used by consumers and companies to store goods
• Manufactured housing – A house that is largely assembled in a factory and then transported to a building site

What are Megatrends

Megatrends are powerful and transformative forces that can change the trajectory of the global economy. And they are about more than successful sectors or companies – they are about driving innovation and about fundamentally changing the way companies do business.

We believe identifying potential megatrends and investing in expected transformations early is key to taking full advantage of real estate investments with long-term growth potential.

We think the following megatrends will be shaping the way we live and work in the future.

• Our reliance on data – driving demand in data centres & towers
• E-commerce is growing – meaning more large processing facilities and warehouses

• Our relationship to the office is changing – coworking, and hub- and bespoke-office models are growing
• The way we live is changing – multi-family, community buildings/developments with more and better amenities

• Infrastructure that makes a difference – particularly alternative sources of energy, such as wind and solar
• Real estate has a role to play – property sectors, including residential properties and offices, are moving towards a carbon-neutral future 

Why should investors consider real estate in their portfolio?

Real estate investments are physical assets with clearly defined earnings and income – in the form of rent – that is paid as part of a contract.

Real estate has the potential to provide investors with:

01 Sustainable income

The potential for a sustainable income and competitive capital returns. Income generated from real estate tends to be higher than the dividends received from traditional stocks. 

02 Protection against inflation

If inflation rises, interest rates tend to rise too, which hurts the returns made from bonds. This is not the case with the income and capital gains made from property.

03 Diversification

Because real estate returns doesn’t mirror either stock or bond returns, they can offer much-needed diversification. This helps to lower overall risk and increase potential returns across your wider investment portfolio.
Risk. Diversification and asset allocation may not fully protect you from market risk.
Risk. There can be no guarantee that the investment strategy can be successful, and the value of investments may go down as well as up.

Risk. There is no guarantee that a positive investment outcome will be achieved.

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