Hazelview Investments is a global alternative investment manager focused on real estate and has been for over 20 years . We maximise returns for investors by employing a value-oriented investment philos- ophy combined with an active management style to identify assets that will generate predictable cash flow over the long term. We have earned a reputation for providing conservatively managed, risk-averse investment opportunities for institutions, trusts and endowment funds, discretionary investment advisers and qualified individuals. Our core competency is our ability to accurately value cash-flowing assets based on a comprehensive analysis of the quality and sustainability of their current and future revenue streams. This fundamental knowledge of bricks-and-mortar investing is critical to identifying high-quality real estate investment opportunities. Hazelview’s global real estate investment platform currently manages over C$11.6bn* in both private and public real estate equity and debt in North America, Europe and Asia-Pacific. Investment structures include core, value-add and opportunistic strategies that are offered through separate accounts and commingled private and public funds. Hazelview is headquartered in Toronto with offices in New York, Hamburg and Hong Kong.

* As of August 2022.

 

Sector forecasts

OFFICE: Office fundamentals across continental Europe are sound considering the trend of working from home and a recession ahead of the sector. Although we are also pricing in a cap rate expansion, the vacancy levels for Grade A are in the low single digits coupled with rising rents. Within corporate budget office, rents are a small percentage of cost and therefore companies set a priority on quality space with prime ESG ratings in the right locations in order to attract and keep talent in a tight labour market. We see some price cor- rection ahead but also not to the extent that is priced into the listed real estate securities. We continue to be selective and currently prefer higher yielding cities. London office continues to be a very selective play on polarisation. This will play out over the next years with London seeing more impact from work from home and a large degree of polarisation of quality.

RESIDENTIAL: The residential regulation has led in most countries to a shortage of housing and on top of it, the high transaction tax rates as well as rapidly rising house prices have led to less and less affordable alternative options for tenants. Although rental increases have become a highly politicised topic the ability of landlords to hike rents has from our perspective risen in this inflationary environment. While energy cost is affecting the consumer to a large degree we believe there is a misconception of how much impact it will have on the residential landlords. Unlike in North America, most of the energy costs are passed through to the tenant. The security of the income supports the debt ratios that have come under significant scrutiny especially by North American investors. While taking the coming recession into consideration, we believe that at current price levels assuming 30% price in property values the risk adjusted returns are very attractive.

RETAIL: Retail investments can be divided into the discretionary and non-discretionary side. While non-discretionary has been favoured by the market due to its stability for a while, a repricing is now also happening as part of higher interest rates. From our perspective yield is lower in this segment and not compensated enough by higher growth, so we see less upside compared to other sectors. The discretionary sector is one of the most controversial investments in our universe. While the discretionary spending is facing one of the worst headwinds, the cash flow yields are also significantly higher. Furthermore, a low euro can lead to a higher degree of tourist spending which can be a surprise factor. Also to consider are rising distribution cost for online sales as well as the attraction of malls as a form of entertainment during a winter with cold apartments and limited spending power.

 

Investment principles & strategy

Hazelview focuses on identifying and valuing real estate investment opportunities on a risk-adjusted basis. We source investment opportunities across the capital stack and access stable, inflation-hedged cash flow by investing in real estate both privately and publicly that own investment-grade real estate. Over the past 20 years we have built a full-service, active management platform with capabilities that stretch across the entire spectrum of real estate, investing privately and publicly in equity and debt. Our experienced team of real estate professionals are strategically located in key global markets including Canada, the US, Europe and Asia, providing us with a deep understanding of local dynamics and enabling us to accurately and efficiently source, underwrite and monitor global real estate investments.

Private Real Estate Investments: Hazelview offers exposure to multi-residential and commercial real estate through direct investments under core, value-add and opportunistic strategies. With over 20 years of real estate investment experience, we have a proven track record for executing; and our success in doing so is supported through a fully integrated investment, devel- opment and property management platform.

Public Real Estate Investments: Hazelview offers global real estate exposure through investments in public equity and debt securities. Our global securi- ties platform allows us to create tailored solutions for investors seeking global real estate exposure and to provide investment strategies that can efficiently capitalise on mispricing in different global markets. We employ the same bot- tom-up approach we take to real estate investments when investing in public securities, which is to underwrite the assets directly, but primarily access the bricks-and-mortar through publicly listed real estate securities.

Four Quadrant Global Real Estate Partners (the Four Quadrant Fund): is specifically designed to combine Hazelview’s various investment strategies into one globally diversified, integrated real estate investment solution. The Four Quadrant Fund offers access to real estate private equity investments, while providing income and liquidity. By investing both publicly and privately in real estate debt and equity, the Four Quadrant Fund is designed to minimise volatility, while maximising the total return for investors.

Performance verification

Hazelview Securities Inc. (HSI), a subsidiary of Hazelview Investments, is the manager of Hazelview’s global real estate securities strategies. HSI claims compliance with the Global Investment Performance Standards (GIPS®). To receive a list of composite descriptions and/or presentation that complies with GIPS standards, contact HSI at info@hazelview.com.

 

COMPLIANCE STATEMENT

This information is provided for use by qualified accredited investors for informational purposes only. It is not intended for, and should not be distributed to, or relied upon by, the public. Information described herein reflects the views of Hazelview Securities Inc. as of the date hereof. No representation or warranty is made concerning the accuracy of any information provided herein and there can be no guarantee that any forecast or opinion set out in these materials will be realized. This is not investment advice and may not be construed as investment, legal or tax advice, or as sales or marketing material for any financial product or service spon- sored or provided by Hazelview Investments Inc. or any of its affiliates or agents.