Columbia Threadneedle Investments (Real Estate)

Corporate overview

At Columbia Threadneedle Investments we know investors want strong and repeatable risk-adjusted returns and we aim to deliver this through an active and consistent investment approach that is team based, risk-aware and performance-driven. Our core strengths lie in multi-asset investing, equities and fixed income, while we offer an innovative range of specialist alternative strategies and investment solutions.

Global reach: we have built a global team of over 2,300 people working together, including approximately 550 investment professionals covering all major asset classes and markets.

Research intensity: behind every investment, you will find original, independent analysis powered by our research experts. Responsible investment (RI) principles are key and, with our proprietary RI tools, add real value to investment decisions.

Forward-looking: our independent Investment Consultancy & Oversight team ensures the integrity of each strategy we manage, working with our portfolio managers to foster continuous improvement.

Our Real Estate expertise

At Columbia Threadneedle Investments, we have highly experienced and specialist real estate teams operating in the UK and Continental Europe 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 centre 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.

Sector forecasts

INDUSTRIAL:

• E-commerce and supply chain efficiency and resilience supporting demand
• Opportunities across the sector from urban logistics to multi-let industrial estates
• Power access is crucial and a defining factor in future-proofing assets
• Limited availability of quality stock, a restrained development pipeline held back by elevated construction costs

OFFICE:

• Focus on high quality assets or those that can be refurbished/ repositioned to deliver in-demand ESG criteria
• Quality and location are key and will continue to bifurcate the market
• Central locations dominate and rising risk of obsolescence/ stranded assets in second tier locations and older stock
• Structural changes impacting long-term performance of the sector

RESIDENTIAL:

• Rising urbanisation, affordability challenges, and tight mortgage conditions will bolster demand for rental properties
• New supply will most likely be constrained by limited land availability, regulation and elevated construction costs
• Rental growth to be captured across multi-family housing and single family housing
• The long-term thematic of an ageing population is creating rising demand for specialised housing

RETAIL:

Retail warehousing

• Large flexible units offering convenience to both consumers and retailers with a changing tenant mix with non-traditional occupiers taking space
• Strong demand versus limited supply and with a strict planning regime in place, often favouring residential, with very little space to be delivered in the future
• Stores are an essential part in the multi-channel ecosystem, prompting fresh investment into bricks and mortar
• Ability to deliver a multi-channel approach from click-and-collect to returns

Retail high streets

• Focus on high-footfall streets in tourist-backed locations
• Limited availability in the most sought-after locations, supporting rental growth
• Acceleration of strategies to right-size store networks to fewer, but larger more strategically located, flexible units
• Public-private-partnerships to repurpose high streets as destinations

OTHERS:

Hotels

• Hospitality future-proofing /repositioning opportunities exist in gateway cities and resort locations
• Tourist hotspots are leading the recovery in the hotel sector
• There is a resurgence in business hotels, perhaps not to the extent pre-covid as hybrid working has dampened the need for quite as much travel
• Managing costs is a priority with labour and business rates offset by the increase in the use of technology and is crucial for success in the current high cost environment

Investment principles & strategy

In the UK, Columbia Threadneedle has been investing in and managing UK property since 1994. Our multi-award-winning investment team includes dedicated investment, asset management, research, property management oversight and risk/governance experts working closely together to maximise performance from our portfolios.

In Continental Europe, Columbia Threadneedle is a European city expert, with a distinctive vision of a sustainable future for Europe’s property market, using deep market expertise, close connections, and client centricity to deliver value to our clients. Our team has an entrepreneurial culture, looking beyond the obvious to access off-market opportunities, including joint ventures and club deals.

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 refurbishment, repositioning, 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.

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 © 2025 Columbia Threadneedle Investments. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.}