Corporate overview

Schroders Capital is the private markets division of Schroders plc, managing €88.0bn of assets globally across direct, primary, secondary and co-investment capabilities. We combine the experience of specialised local teams, with the scale, rigour and resources of a global institutional platform, to provide our investors with global access across Real Estate, Infrastructure, Private Equity, and Private Debt & Credit Alternatives investments.

The real estate division of Schroders Capital employs over 270 staff in 16 locations globally and has been active in real estate markets since 1971. Our platform is underpinned by Schroders Capital’s fiduciary expertise, while our local entrepreneurial teams pursue innovative ideas in their areas of expertise and collaborate within the expert networks of one of the world’s leading asset managers, including extensive capabilities in sustainability and impact investing. Our on-the-ground teams are recognised for their operational excellence and unique hospitality mindset applied to active management, managing each asset as a distinct business in itself, deeply engaging with local tenants to optimise long-term sustainable income and value across the lifetime of the investment.

Our institutional global platform is built on high-quality research capabilities and deep expertise in local sectors, sustainability and impact to consistently source, underwrite, and select optimal investment opportunities along the risk curve. We match these opportunities to our clients’ diverse global requirements across risk appetite, liquidity, sustainability, impact and governance. We offer long-term, sustainable income and growth investment strategies, including core, core-plus, value-add, debt and impact strategies.

For more information, visit us at www.schroderscapital.com

Sector forecasts

INDUSTRIAL: Industrial and logistics assets have now largely rebased to attractive price points in most submarkets, supported by strong structural fundamentals. Prospective returns in Europe are particularly compelling given limited supply. Positive demand dynamics around the impact of nearshoring benefiting larger facilities and ‘just-in-case/time’ distribution on facilities close to urban areas present attractive opportunities to recapitalise platforms and developers in this sector

OFFICE: Grade A/prime offices meeting ‘modern workplace’ standards and able to service ever-increasing occupier requirements, show better value than previously on account of the upward yield movements experienced to date. This has been most evident in Europe thus far, but we note that this sector is particularly exposed to potential further downwards adjustment given the negative sentiment surrounding it.

RESIDENTIAL: Living markets broadly show fair value on a risk adjusted basis given their relatively defensive profile coupled with demographic and behavioural trends, although careful consideration needs to be given to local regulation adjusting to protect residential tenants from price increases, especially in Europe.

RETAIL: There is increasing evidence of rents and capital values stabilising at a broader range of fashion orientated formats. We maintain a modest underweight position to ecommerce-challenged retail, with an emphasis on resilient convenience-orientated assets, albeit that a ‘floor’ is being found across a broader range of formats.

OTHER: We favour operational property-types on account of their robust demand-side tailwinds, and our ability to actively drive long-term sustainable income and value aligned with tenant success. Including UK self-storage, European hotels and senior housing, select US residential segments and healthcare related real estate in Asia Pacific. Additionally, we remain of the view that private real estate debt offers immediate and attractive risk-adjusted value, particularly for high yield loans and are seeing increased appetite for sustainability and impactfocused debt solutions.

Investment principles & strategy

Our approach is grounded in local and specialist expertise in key markets across Europe, Asia-Pacific and the Americas. Our clients benefit from leveraging our three key competitive strengths.

  • Solutions approach: We look through long-term trends and short-term disruptions to pick out the best strategies. We identify the best risk weighted opportunities, and the optimal execution formats for our clients.
  • Operational excellence: Our entrepreneurial teams on the ground are active players in their respective markets, sourcing and actively managing through changing market circumstances. We treat every asset as a distinct business in itself, with a clear strategy that optimises income, minimises operational costs and waste of scarce resources, prioritising activities that will have the greatest value impact, improve marketability and reduce risk.
  • Sustainability and impact: We believe integrating sustainability considerations across our process is instrumental for long-term investment performance. We apply the same core values and high standards to our business activities as we do when investing on behalf of our clients, aligning with our commitment to sustainability and positive impact.

Strategic corporate development

The operational scale, and the local expertise of our platform allows us to bring our hospitality mindset to the markets and sectors our clients are focused on. Schroders Capital continues to develop our tailored solutions, through the strategic growth of our offerings, complementing our existing business.

Leaning on our competitive strengths we are well placed to continue to develop our capabilities in the following areas:

  • Providing bespoke asset management solutions for global clients across both direct and indirect portfolios.
  • Delivering access to financial and social impact returns through the launch of our dedicated UK Real Estate Impact offering.
  • Continuation of our value-add expertise across regions, seeking the best risk adjusted opportunities in markets, adopting a sequential approach to the recovery.
  • Furthering our drive to democratise access to private assets. Developing structures and solutions tailored for wealth managers, intermediaries and individual investors thorough our Semi-Liquid platform.
  • Supporting defined contribution clients in their changing investment objectives through innovative structures and solutions.

Performance verification

Schroders Capital closely monitors and reports regularly and transparently to our clients on the performance of all funds and other investment structures, with appropriate controls and governance procedures in-place. This includes reporting against sustainability and impact objectives.

COMPLIANCE STATEMENT

Marketing material for professional clients only. All data as of 31 March 2024. This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy. We do not make any warranty or representation as to the completeness or accuracy of the information contained herein. Any reference to sectors/countries/ stocks/securities are for illustrative purposes only and not a recommendation to buy or sell any financial instrument/securities or adopt any investment strategy. Issued by Schroder Real Estate Investment Management Limited, 1 London Wall Place, London EC2Y 5AU. Registration No 1188240 England. Authorised and regulated by the Financial Conduct Authority.