Corporate overview

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. Through extensive research, innovative investment products, a seasoned management team, and hard work from some of the most talented professionals in the industry, Heitman has 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.

Investment principles & strategy

Heitman is a research-driven investment firm. Our strategies reflect constant 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 units. Our business plan is consistent with the firm’s mission, which is to be the leading real estate investment management firm by consistently outperforming benchmarks on both an absolute and a risk-adjusted basis, and by providing exemplary client service. We do not seek to be the biggest real estate investment manager in terms of assets under management, but rather to grow our business organically by deliver- ing strong performance and excellent client service. As a result, the growth path we have set is a measured one.

Sector forecasts

INDUSTRIAL: The industrial sector has strong tailwinds following a surge in e-commerce during the pandemic. While this boost is likely to slow in 2023, the structural shift toward online spending across Europe will continue to support demand. Geopolitical risks and potential de-globalisation may also drive demand as supply chains become more localized, yet evidence of this is still mainly anecdotal. The recent surge in transport costs may also encourage this longer term, although in the near term is likely to be a headwind as e-commerce – already a tight margin business – becomes more expensive operation- ally. Industrial is also a historically cyclical sector, meaning demand is likely to cool in 2023 as consumer spending slows.

Vacancy rates are currently near record lows across most industrial markets, which should support rental growth even if demand cools. A recent rise in speculative supply nonetheless remains a risk. A supply overhang could materialise if demand drops significantly in 2023, which may undermine the strong rental growth expectations that have contributed to record low yields in the sector. This risk is greater for big box logistics than urban, last mile facilities. That said, investment volumes in 2023 are likely to remain high by historical standards.

OFFICE: The European office sector has been characterised by bifurcation since the beginning of the pandemic. The ongoing shift to new working pat- terns has caused a drop in overall office demand, with surveys suggesting the average European office worker now spends two days working from home each week, on average, compared to one day before the pandemic. There has also been a flight to quality as employers seek to create working environments that look and feel more attractive (which is important for retaining talent), while encouraging productivity, collaboration, and mentorship. These two trends have manifested in higher office vacancy rates but also higher prime office rents across European markets. In 2023, the risk of recession and slow- ing office-based employment growth may undermine the sector as a whole. Office has historically been highly cyclical, causing us to expect limited rent growth if a downturn indeed materialises.

One mitigant to recession risk is that new office supply has recently been less elastic than during previous property cycles. During 2023-24, CBRE expects European office supply to grow by 2.2%, compared to 3.9% during 2007-08. Surging construction costs and capacity constraints mean actual deliveries may be even lower this time around.

RESIDENTIAL: The rented residential sector has strong occupational tail- winds going into 2023. Most cities have seen a surge in city centre demand following the lifting of lockdown restrictions, while structural long-term trends such as shrinking households, population growth, and urbanisation remain supportive to demand. Various supply constraints have meanwhile prevented new development from keeping pace, as should the recent sharp increase in construction costs. This has spurred strong rental growth, which has also been supported by rising house prices, inflation, and accelerating wage growth. The labour market appears largely healthy going into 2023, but economic headwinds could cause unemployment to rise and wage growth to slow. Especially given affordability concerns in some markets, there is the potential for rent growth

to weaken. Regulated markets – where below-market rents create imbedded reversionary potential – are likely to be more resilient than unregulated markets during a severe downturn. Unregulated markets do however allow for better inflation passthrough to rents. These dynamics make it difficult to predict which residential markets will outperform in 2023, but it appears likely the sector as a whole will outperform other property sectors from an occupational perspective.

RETAIL: There has been little relief for the European retail sector over recent years. The structural shift toward e-commerce, pandemic lockdowns, and more recent surge in inflation have all been negative for in-store consumer spending. The situation is likely to deteriorate further in 2023 as higher interest rates and a slowing economy weigh on household finances and confidence. That said, fiscal stimulus should help to cushion consumers and prevent the level of retrenchment seen after the GFC in 2007-08. Occupational prospects nonetheless remain bleak relative to most other property sectors. There is anecdotal evidence of retail space being converted to alternative uses (eg, leisure, residential) although this is not on a scale adequate to meaningfully bring down vacancy. CBRE estimates that shopping centre rents, even for prime assets, fell by an average -12% between Q4 2019 and Q2 2022. During 2023, they expect rents to be virtually flat across almost all markets, which may even prove to be optimistic. The outlook for secondary assets is even poorer. Some less discretionary formats (eg, supermarkets) and inner-city high street locations benefiting from a post-pandemic rebound in local footfall should outperform. Repositioning and conversion strategies will become more common, yet associated costs and complexity will impose limitations on such strategies.

OTHER: Some of Europe’s most resilient sectors in the past two years have been among the ‘alternatives’, including self-storage, student housing, and senior housing. These sectors are expected to perform relatively well due to their demography-, needs-based demand drivers, inelastic supply and short leases, and higher yields than other sectors (which reduces sensitivity to rising borrow- ing rates). Countercyclical demand drivers in self-storage and student housing make them particularly attractive in the current economic environment. Yet these sectors are not completely without risk. In senior housing, for example, shortages of care workers and rising costs (eg, wages, food) may weaken the profitability of operators, especially where there is over-reliance on state-funded residents for whom fee increases are constrained. Nonetheless, the potential for distress creates an attractive opportunity for investors who can navigate operational complexity and factors such as regulation.

Market fragmentation and the nascency of these sectors meanwhile creates the opportunity to unlock value at the asset, operator, and portfolio levels. Some initiatives, such as introducing dynamic pricing tools among self-storage operators, can be pursued irrespective of economic conditions. This can enable investors to drive returns even in a rising interest rate environment.

Performance verification

Heitman appreciates the importance of Global Investment Performance Standards (GIPS®). Heitman’s Public Real Estate Securities group and its North America Private Real Estate Equity group claim compliance with GIPS. Returns for both Heitman’s Public Real Estate Securities group and Heitman’s North America Private Real Estate Equity group have been independently verified by the accounting firm Deloitte & Touche LLP. Heitman’s North America Private Real Estate Equity has been verified for the periods of 1 January 997 through 31 December 2020 and Heitman’s Public Real Estate Securities group has been verified for the periods 1 January 1993 through 31 December 2020. To date, 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.