Founded in 1966, Heitman is a global real estate investment management firm. We operate in North America, Europe, and Asia-Pacific, in public and private markets, executing debt and equity strategies across the return spectrum. Our mission is to lead the evolution of real estate through investments that fulfill the needs of people and communities in a world of constant change. Through research-driven investment products, a seasoned management team, and hard work from what we believe to be some of the most skilled professionals in the industry, Heitman believes we have the experience and the resources to capitalise on opportunities and achieve our clients’ investment objectives. Our three complementary business units are:
- Private Real Estate Equity: Investing in direct real estate in North America, Europe, and Asia-Pacific on behalf of our commingled funds and separate account clients .
- Public Real Estate Securities: Investing in publicly traded real estate securities in North America, Europe, and Asia-Pacific via separate accounts, UCITS portfolios, and a mutual fund, acting as a sub-adviser, and additionally participating in UMA programmes.
- Real Estate Debt: Origination and management of debt investments secured by real estate in North America.
Capital continues to favour the logistics sector. Despite recently slowing investment volumes and cap rate expansion due to rising borrowing costs, fundamentals in the region remain strong.
Warehouse occupancy in key markets remains tight, especially for dry storage, but there appears to be a supply overhang for cold storage resulting in softening of rents. For instance, the vacancy rate for prime logistics in Australia as of H1 2023 stayed under 1%. Rent growth momentum will likely be sustained in 2023 but not be as high as in 2021 and 2022.
The office utilisation contagion has not hit APAC markets, other than Australia where return to office has improved, but at a slower pace. In some markets such as Seoul, Singapore, and to some extent Tokyo, occupier demand has experienced low vacancy (sub-5%) and restrained supply for the next two years. In such landlord-favoured markets, rental growth persisted, supporting the outlook.
Across the other APAC markets, tenant demand has largely stayed subdued due to the increasing macroeconomic headwinds. Tenants have largely adopted a wait-and-see approach in their office requirements due to cost-optimisation during these challenging times. In the investment market, the higher interest rate environment has curbed investor buying as many expect cap rates to rise further.
The residential rental sector is only starting to evolve in China and Australia and is in various stages of evolution in the major hubs of Seoul, Hong Kong, and Singapore. For those investing in Japan, they have widened their footprint to include Osaka, Nagoya and Fukuoka in addition to Greater Tokyo for growth opportunities.
In Australia, the built-to-rent is similarly pointing to an acceleration in the growth trajectory. Demand tailwinds (in part due to affordability to own) as well as revised policies from the federal government’s reduction in the managed investment trust withholding tax rate has helped spur the sector. Other major cities are experimenting with the co-living concepts in Seoul and Singapore that have seen more capital willing to put money to work.
Resilient private consumption has supported recovery in the APAC retail sector, anchored by non-discretionary spending and essentials. Notwithstanding, retail sales growth has continued to moderate in recent months on the back of higher inflation and the interest rate environment.
In the key tourism hubs, spending is approaching pre-COVID figures. Although tourist arrivals from mainland China still trail, recent figures point towards accelerated growth in Singapore, Japan and South Korea.
Due to the growing uncertain economic environment, investors widened the array of property types that display defensive characteristics and are counter cyclical. As such, investors are paying more attention to alternative asset classes.
Some investors have begun to discuss acquiring self-storage facilities in densely packed cities such as Tokyo, Hong Kong and Singapore.
Investment principles & strategy
Heitman is a research-driven investment firm. Our strategies reflect continued analysis of economic and demographic trends, property market shifts, and capital flows. In addition, Heitman’s various business lines include public market professionals, direct property investors, debt investment professionals and global resources, fostering a creative atmosphere within Heitman. This translates into an information exchange that helps us stay abreast of changing conditions in all areas of real estate. We then use this information to create innovative strategies designed to meet or exceed our clients’ objectives and expectations.
Strategic corporate development
The firm’s business plan for the next three years is to selectively grow assets under management across our three business unitsas a result of providing smart investment solutions, designed to meet or exceed our investor’s objectives. Our business plan is consistent with the firm’s mission, which is to lead the evolution of real estate through investments that fulfil the needs of people and communities in a world of constant change. We do not seek to be the largest real estate investment manager in terms of assets under management, but rather to grow our business organically by delivering strong performance and market leading strategies. As a result, the growth path we have set is a measured one.
Heitman’s Public Real Estate Securities and North America Private Real Estate Equity groups claim compliance with Global Investment Performance Standards (GIPS). Returns for each group have been independently verified by accounting firm Deloitte & Touche LLP. Our European and Asian private equity composites consist of leveraged investment level time-weighted returns.
Certain Heitman subsidiaries are registered with the appropriate regulatory authorities in the US and abroad and, as such, are subject to applicable regulatory schemes. These operating subsidiaries have implemented their own tailored compliance policies to ensure adherence to governing rules and regulations.