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 2,000 people working together, including over 450 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, Continental Europe and the US 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.

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 circa $27.7bn of property assets, with circa $13.2bn invested across a range of funds in the UK (as of 30 June 2023). Our real estate management capabilities have received a high degree of industry recognition, including numerous awards over our 28-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.

We are 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. Columbia Threadneedle is a signatory to the United Nations-backed Principles for Responsible Investment (PRI).

Sector Forecasts

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

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

RESIDENTIAL:

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

RETAIL:

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

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

Investment principles & strategy

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.

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.}