DTZ Investors (Real Estate)

Corporate overview

DTZ Investors (DTZI) is a specialist asset manager with a 50-year track record of creating value for clients across global real estate markets. DTZI manages €14bn ($16bn) of assets for a range of high-profile institutional investor clients. With a team of over 100 personnel in its main offices in London, Paris and Tokyo, DTZI offers multiple real estate investment solutions for clients including commingled funds, separate accounts, club deals and fund-of-funds.

Investment principles & strategy

DTZI generates long-term superior returns for clients by customising an integrated service that marries their investment objectives with a detailed knowledge of real estate markets, responsible investment and the value-creation process. Our approach relies on five key beliefs:

Act responsibly – We take responsibility for delivering on our clients’ return objectives within their risk parameters through a customised approach that marries global investment know-how with local market expertise. Our responsible investment philosophy combines environmental and wider societal benefits with financial returns that are assessed over the very long term.

Take controllable risks – We have strong processes to identify, price and manage risk. We assess returns at an asset level and balance risk at the portfolio level. We avoid location and credit risk and take on leasing and obsolescence risk that can be priced and managed.

Persistence pays – Strong processes and detailed due diligence avoid mistakes, secure value and ensure liquidity in portfolios. We marry strong processes with a two-stage governance process that assesses price and risk on all transactions over the very long term.

Generate value through active management – We operate vertically integrated teams that understand building design, occupier need and asset potential to engineer value. We marry this with a deep knowledge of the capital markets to determine how best to finance value creation.

Sell well – A strong sell-discipline is essential in understanding when an asset’s place is no longer justified in a portfolio. Through a combination of investment process and governance, we constantly review our sales process to crystallise returns or mitigate risks.

Sector forecasts

INDUSTRIAL:

The sector’s outlook remains positive with demand supported by a diverse occupier base and structural growth drivers (e-commerce and on-shoring trends and supply chain reorganisation) and supply constrained by belowaverage vacancy rates and reduced speculative development due to higher build and debt costs.

Strong investor sentiment and the significant weight of global capital targeting the sector will support investment yields in the near term.

Modern, operationally efficient estates situated within final-kilometre destinations of consumers will remain highly preferable to occupiers and should reward investors with more sustainable performance over time.

OFFICE:

The performance of the office market will remain polarised with high-quality, ESG-compliant buildings within the major metropolitan European CBDs expected to deliver the best performance returns.

Strong tenant demand for high quality office space will provide investors with value-add opportunities to refurbish older assets into core stock across Europe’s major CBDs.

RESIDENTIAL: 

The residential and multifamily sectors should offer stable income and positive income growth where demographics are compelling. Europe’s ageing population will continue to support occupier demand in the senior living sector, while the shortage of high-quality, convenient and well-connected urban accommodation for the young across Europe’s major cities should support the performance of PBSA.

Affordability concerns remain a risk and may curb rental growth prospects across the living sectors.

RETAIL:

Lower inflation and improvements in wage growth should support disposable incomes, retail sales and rental growth this year. While above-average income returns should enable most retail segments to outperform the all-property average over the near term.

We expect the essential retail segments (retail parks and supermarkets) will deliver the best risk-adjusted total returns over the next few years. Retail spend and footfall should remain firm, while more favourable supply conditions (below average void rates and a limited development pipeline) should support rental growth.

Strategic corporate development

We continue to develop our business to meet the needs of our clients. Development comprises geographic platform expansion, service lines, sectors and investment products.

We are committed to reducing our own and our sector’s impact on the environment. We will continue to develop our responsible investment programme, working with agencies such as the PRI, GRESB, IIGCC, TCFD and Better Buildings Partnership to deliver transparent improvements to our managed portfolios.

We continue to focus on the 30 principal urban economic centres that dominate the European real estate markets. Our non-domestic clients have a requirement for complex, bundled services on large scale assets in these markets.

We will continue to focus on real estate development, particularly in growth markets where technology is driving demand for a new type of real estate that is more flexible than current stock. This will extend our recent investment programmes in logistics and urban living. We will continue to partner with best-inclass operators in these markets where appropriate.

We see asset opportunities at each end of the risk spectrum. We expect the changes in market liquidity and the shifts in how long-term investments in real estate are funded to offer well-funded core buyers to secure top-quality assets at fair prices. We also expect the debt-funding gap to create value-add opportunities for conviction buyers who can act quickly when market activity is quiet.

Performance verification

Our UK track record is benchmarked against the MSCI Index and is compliant with the Global Investment Performance Standards (GIPS). In the UK we have an exceptional performance track record; we have won 19 prestigious MSCI performance awards since 2000 and we also received an award for the top performing fund on a 10-year basis in the UK and we were the winner of the European long-term risk-adjusted relative return award in 2023. Our house performance has beaten the MSCI benchmark by 1.2% pa on average over the past 10 years to December 2023. In Continental Europe, we won the ‘Pierre d’Or’ as Best Asset Manager of the year and the European Pensions award for Best Asset Manager reflecting our work for a range of value-add strategies in offices, residential and logistics.

We have achieved a number of responsible investment successes in recent years. We have been a signatory to PRI since 2013 and in 2023 our policies were rated 5* in Policy, Governance and Strategy; 5* in Real Estate; and 5* in Confidence Building Measures. We have been a member of and participant in GRESB since 2015 and in 2024 we were awarded 21 green stars and were ranked first out of 1,061 European managers for our management score.