Columbia Threadneedle Investments (Real Estate)

Corporate overview

At Columbia Threadneedle Investments, we offer investments to make a difference to our investors’ world, and the wider world. Millions of people rely on us to manage their money and invest for their future; together they entrust us with US$652 billion.

We are Globally Connected

Our reach is expansive, with over 2,500 people – including more than 650 investment specialists – spanning the world. But for us, a global perspective is about more than numbers; it is about the smarter advantage we create when we bring our teams’ insights together. We’ve built our diverse expertise and on-the-ground knowledge into our investment processes and solutions, covering almost every asset class and market.

We are Intense about Research

We share a belief that original, independent research makes investment decisions smarter. We have over 200 research associates around the globe, and proprietary tools harnessing big data and next generation analytics. This allows us to turn information into forward-looking insights that can add real value to our investment decisions, enhancing our ability to help deliver good outcomes for our clients.

We have a Responsible Ethos

We think our Responsible Investment (RI) capabilities can help you contribute through your investments to shaping the future world you seek. This continually pushes us forward in how we seek to operate as a business in developing our in-depth RI research capability as support for portfolio construction.* As a responsible investor, partner, and citizen we’re building our RI capabilities needed to help you, our clients, achieve your financial goals while seeking to shape the world you want to live in.

We focus on Continuous Improvement

Markets don’t stand still and neither do we. Every day, we’re looking for opportunities to improve how we invest and what our clients experience – be it the independent oversight teams that ensure the robustness of our investment processes, the emphasis we place on developing our talent, or the innovative solutions that we offer. The world is continually changing, and with it our clients’ needs, which is why we are always evolving.

Whatever world you want, our purpose is to help you achieve it.

_{*Although RI research is made available to all portfolio managers, each portfolio management team within our firm makes its own investment decisions and certain teams may place more, less or no emphasis on such research in any given investment decision.}

_{All correct as at 31 March 2024.}

Investment principles & strategy

At Columbia Threadneedle Investments, we have highly experienced and specialist real estate teams operating in the UK, Continental Europe and the United States with a range of strategies across real estate.

Combining the resources of a global investment business that is renowned for original research, advanced data analytics, and a center of excellence in responsible investment, we provide the responsive partnership and market expertise clients need to manage their real asset investments. At Columbia Threadneedle, we believe responsible investment in real estate is complementary to our core objective of delivering strong risk-adjusted investment returns for our clients.

Our specialist capabilities include:

UK real estate

With a leadership team that has close to 30 years’ experience, our UK Real Estate team includes dedicated investment, asset management, property management oversight and risk / governance experts working closely together to maximise performance from our portfolios.

Continental European real estate

Our European Real Estate manager is well connected and invests across the continent directly from offices in Munich and Paris and on-the-ground reach in core European markets including Germany, France, Belgium, the Netherlands, Luxembourg and Southern Europe. The team has over 20 years’ experience in investing for institutional clients, offering a range of regional and pan-European strategies incorporating both commercial and residential assets.

US real estate: Lionstone

We have developed an innovative data-analytics-driven real estate investment proposition that conceptualises, analyses, and executes national investment strategies. Using proprietary algorithms and advanced data analytics, we gain insight into where and what is driving the changing ways that people in America want to live and work.

At the heart of our real estate capability is a clear and consistent investment philosophy:

A preference for high-yielding investments: income returns dominate total returns over the long term. As such, assets with high sustainable income yields form the key component of our investment portfolios.

Flexible buyers: we seek value and investment potential across all sectors, geographies and lot sizes, typically avoiding ‘trophy assets’, which command lower yields and are more demanding on rental growth.

Stock picking is key: selecting properties on individual merit is a key driver of long-term performance, supported by forensic asset-by-asset due diligence.

Proactive asset management unlocks value: our specialist asset management team maximises returns from our properties, increasing capital value and improving rental growth potential via refurbishments, repositionings, lettings, lease renewals and rent reviews.

Responsible Investment: ESG principles and performance metrics are embedded throughout the core areas of our operations: investment activity, asset management, refurbishment and property management.

Sector forecasts

Retail Warehousing

Large flexible units where convenience is supporting demand from both retailers and consumers
Tenant mix is changing with some non-traditional occupiers taking space
Grocery anchored are best performing
Ability to deliver a multi-channel approach from click-and-collect to returns

Industrial

Fundamentals are strong with demand supported by strengthening of supply chains and e-commerce
Low vacancy environment
Limited availability of quality stock
Restrained development pipeline

Living sectors

Changing demographics support long-term growth of the sector
Undersupplied and lack of quality stock in the right locations
Affordability is increasing an issue
Diversity within the sector from mass market to specialised senior living
PBSA continues to deliver strong growth in top tier cities.
Single and Multi-family development addressing structural undersupply

Retail High Streets

Focus on low vacancy luxury high streets
Acceleration of strategies to right-size store networks to fewer, but larger more flexible units
Opening up of markets and rising tourism numbers
Public-private-partnerships to repurpose high streets as destinations

Office

Quality and location are key and will continue to bifurcate the market
Repositioning of schemes to include in-demand ESG credentials (across investors, occupiers and the workforce)
Obsolescence in older, secondary stock and locations
The hybrid working solution has further to run and is not a one-size-fits-all solution

Strategic corporate development

Columbia Threadneedle Investments is a leading global asset manager providing a broad range of actively managed investment strategies and solutions for individual, institutional and corporate clients around the world. Globally we manage c $25.4bn of property assets, with c $10.0bn managed by the UK real estate team across a range of funds and solutions (as of 31 March 2024). Our real estate management capabilities have received a high degree of industry recognition, including numerous awards over our 30+ year track record.

In the UK, our fund range comprises open-ended balanced funds, strategic partnerships, closed-ended leveraged structures, and two specialist strategies. Firstly, the Carbon Impact Opportunities strategy, which has a specific remit to undertake refurbishments to a low carbon standard. Secondly, in the residential space, the UK Affordable Build-to-Rent strategy, which provides sustainable long term income from the funding and operation of affordable private rented housing across the UK.

Columbia Threadneedle is part of Ameriprise Financial, a US-based financial services provider, and we share a strong culture and commitment to helping people feel confident about their financial future.

We are equally committed to a responsible investment approach that creates sustainable long-term value. We strive to be responsible stewards of our clients’ assets within a framework of good governance and transparency. Being a responsible investor helps us generate better investment decisions and outcomes for our clients. It is integral to our business proposition and defines how we act in the marketplace. Columbia Threadneedle is a signatory to the United Nations-backed Principles for Responsible Investment (PRI).

Managing real estate assets responsibly: our approach

We believe that investing in real estate responsibly is complementary to our core objective of delivering strong risk-adjusted investment returns for our clients. Key to our approach is an understanding of the environmental and social risks posed by real estate assets. We focus on mitigating those risks and seeking continuous improvement by assessing the environmental and social impacts throughout the lifecycle of our property assets. This approach is ingrained within the day-to-day activities of our business.

Performance verification

Columbia Threadneedle periodically evaluates its performance against a number of benchmarks, according to best market practices.

_{Compliance Statement}

_{For use by professional clients and/or equivalent investor types in your jurisdiction (not to be used with or passed on to retail clients). Past performance is not a guide to future performance. The value of investments and any income is not guaranteed and can go down as well as up and may be affected by exchange rate fluctuations. This means that an investor may not get back the amount invested. Your capital is at risk.}

_{This material is for information only and does not constitute an offer or solicitation of an order to buy or sell any securities or other financial instruments, or to provide investment advice or services. The analysis included in this document has been produced by Columbia Threadneedle Investments for its own investment management activities, may have been acted upon prior to publication and is made available here incidentally. Any opinions expressed are made as at the date of publication but are subject to change without notice and should not be seen as investment advice. Information obtained from external sources is believed to be reliable but its accuracy or completeness cannot be guaranteed. Issued by Threadneedle Asset Management Limited. Registered in England and Wales, No. 573204. Registered Office: Cannon Place, 78 Cannon Street, London EC4N 6AG. Authorised and regulated in the UK by the Financial Conduct Authority.}