Pictet Group is a leading independent investment firm with more than 200 years’ experience. As long-term investors we aim to direct capital to the real economy in a manner that improves the state of the planet. We do this by building responsible partnerships with our clients and the companies in which we invest. With $772bn in assets under management or custody as of 31 December 2023, Pictet is one of the leading independent wealth and asset managers in Europe. Headquartered in Geneva, Switzerland, and founded in that city, Pictet currently has over 5,400 employees in 30 offices.

We are a partnership owned by seven managing partners, with principles of succession and transfer that have remained unchanged since its founding in 1805. Pictet offers only wealth management, asset management, alternative investment, and other asset-related services. The group does not carry out investment banking activities or grant commercial loans.

We are one of Europe’s leading specialists and have been investing in, managing, and advising on alternative investment portfolios since 1989. As a private company, we understand private markets and believe in their potential to generate returns and support innovative businesses shaping the future. Our attention to detail, our independence and our long-term approach have brought Pictet’s distinctive hallmark of stability to these areas of investing.

Sector forecasts

INDUSTRIAL/LOGISTICS: 

We view last-mile logistics as a prime opportunity to capitalise on technological advancements and the need to enhance the sustainability credentials of the sector. In the past decade, the scarcity of logistics hubs combined with the shift towards e-commerce has created a significant supply/demand imbalance in Europe. This has been further exacerbated by restrictive planning laws and competition from residential developers. Our investment focus is on last-mile logistics hubs in countries with growing e-commerce penetration and limited green supply.

We believe that the last-mile logistics sector has undergone a correction and anticipate a rebound in the coming months, driven by the limited supply of logistics hubs. As market dynamics adjust and stabilise, we expect to see increased demand for efficient last-mile delivery solutions. We aim to position ourselves to benefit from this anticipated rebound.

OFFICE: 

The office sector has suffered from the COVID crisis and the boom in remote work which has shifted the factors influencing office occupancy. Nevertheless, we observe that most companies will still keep the same office footprint, but this will need to be adapted to their new requirements. Facilities to socialise, focus on wellbeing and ESG, flexible hub offices and ‘home-fromhome’ services are increasingly important to attract and retain talent, as well to encourage professionals back into the offices. In this evolving landscape, the concept of office to residential conversion, has gained traction.

Office to residential conversion involves repurposing office spaces into residential units to meet the changing demands of the real estate market. This trend reflects a creative approach to utilise underutilised office spaces and transform them into sustainable and desirable living spaces. By converting offices into residential units, developers can tap into the growing demand for housing while revitalising urban areas.

RESIDENTIAL: 

The European residential sector is currently in the early stages of ‘institutionalisation’ in most countries, with professional asset manager holdings at relatively low single-digit levels compared to countries like the United States. This indicates that European residential assets are undermanaged and present attractive investment opportunities.

Demand outpaces supply in Europe with many capital cities in critical shortage of housing. Many residential assets require enhancements and refurbishments to comply with new energy guidelines and policies. However, this necessitates substantial investments that not all owners can afford or have the expertise for.

We observe a growing appetite from large investors, particularly for buildto- rent properties, in the European residential sector. This emerging trend reflects the recognition of the sector’s potential and the desire to capitalise on the strong market dynamics and positive demographic trends.

HOTELS:

The European hotel sector is rebounding post-pandemic, driven by increased leisure travel. However, many hotels in Europe, often family-owned, lack the necessary investment to modernise and enhance their sustainability profile of their assets for today’s consumer demands. Hotels have the advantage of promptly adjusting room pricing to offset cost increases, helping mitigate the impact of inflation on investor returns. This presents attractive investment opportunities as the sector recovers and meets the growing demand for upgraded accommodations.

Investment principles & strategy

Pictet’s real estate network comes from the cumulative experience of our people and their relationships over more than a century. When combined with our local presence in six European countries, it allows us to access unique, off market opportunities on behalf of our investors. Our offering spans an array of strategies for income and capital growth, delivered through direct and multimanager solutions, as well as co-investment opportunities.

Our direct investment team, led by Zsolt Kohalmi (ex-Starwood Capital, Meyer Bergman), has a total of 120 years’ investment experience and a track record of 181 real estate transactions amounting to $35.5bn.*

We are active investors. We create value in our portfolios of assets independently of market conditions while leveraging long-term, thematic investment drivers such as technology, sustainability and flexibility. The European built environment faces substantial environmental challenges and changing regulation. This puts sustainability at the heart of our investment process, bringing strong potential to create added value.

Pictet is a real estate partner of choice thanks to our strong, long-standing fiduciary credentials and close alignment of interests with those of our investors. We have a distinct investment philosophy that delivers strong performance through high-conviction investments with a thematic focus and a prudent risk-management approach.

* Source: Pictet Alternative Advisors, as at 30 June 2024.

Strategic corporate development

Over the coming years, we will continue to grow our direct real estate business by launching new funds and investing on behalf of existing ones. In particular, we are expecting to raise further capital for the following funds:

  • Pictet Real Estate Capital Elevation Core Plus: a European core plus fund that targets a consistent yield and capital appreciation. It invests in high-quality residential, office and last-mile logistics assets in major Western European cities and is offered in an ELTIF structure.
  • Pictet Real Estate Capital Elevation Fund II: the second in our range of European value-add strategies (Elevation I raised €700m in 2020) to capture the opportunities created by the current dislocation in European markets. It focuses on the mid-cap segment, with a sector focus in beds, last-mile logistics, and special situations in key European gateway cities.

COMPLIANCE STATEMENT

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