Corporate overview
For almost 250 years, Edmond de Rothschild has represented a unique brand with a strong reputation in the financial industry and has always managed its business activities with conviction and a long- term vision.
Edmond de Rothschild REIM is the group’s centre of excellence for real estate and real estate debt in Europe, bringing together teams of experienced professionals who combine their local expertise with technical, financial, legal, strategic and commercial skills to generate value from the assets managed on behalf of its clients.
Our teams work within a vertically integrated platform with a clear investment philosophy supported by a rigorous, research-driven investment process, generating sustainable performance through different economic and property cycles.
We provide a full range of services to investors: fund and portfolio management, financial management, asset and development management and in selected countries, property management. Our offering includes debt and equity investment strategies across the risk/ return spectrum from core/core plus to value add.
Success in real estate relies on having impact on buildings based on proximity to the assets with a local presence and knowledge, either via our own staff or via our network of local partners. Being a conviction-driven investment house, we aim at building excellence across the real estate team and seek to deliver sustainable returns for our investors, support our tenants in their success and add value to the lives and communities related to our real estate activities.
Edmond de Rothschild REIM has more than 140 people in eight offices across Benelux, France, Germany, Switzerland and the UK.
Sector forecasts
INDUSTRIAL: While underlying occupier demand remains strong supported by structural trends (e-commerce growth, re-/ nearshoring, urbanisation), new supply is very restricted and vacancy rates are low across markets. Though rental growth might not be as strong as in the last three to four years, it is still expected to substantially outpace inflation and drive strong and sustainable cash flow for investors. Investments in the sustainability of buildings provide an opportunity to drive rents, improve the quality of stock, at the same time providing above average returns on ESG-related investments such as solar panels and EV chargers. Repricing of industrial and logistics real estate has materialised faster than in other sectors and currently provides an excellent entry point for investors.
OFFICE: Tenants continue to focus on buildings with good sustainability and low energy consumption. City centre amenity-rich office buildings with good public transport connections and sustainability credentials will be in high demand. Larger HQ-type office buildings and secondary locations will continue to suffer over the longer term as employers increasingly focus on offering attractive space in order to attract talent and increase the productivity of their employees. Landlords may need to offer more flexibility, potentially resulting in a shortening of the duration of leases.
RESIDENTIAL: Population growth, changes to household formation and an ageing population all ensure demand for housing will continue to outstrip supply across Europe. Affordability is increasingly an issue yet rent controls, rising construction costs, competing land uses and higher interest rates make it more difficult to build new stock.
In the long run, the market offers opportunities to invest in both existing and new-build developments, with good environmental credentials, delivering positive social impact, while benefiting from sustained occupier demand, delivering a defensive granular income stream with a natural correlation to wage growth and inflation.
DEBT: European banks continue to reduce their exposure to commercial real estate lending, a structural trend that persists despite improving economic conditions. With inflation moderating and interest rates starting to decline, the lending environment is beginning to shift. However, debt costs for borrowers remain at elevated levels given the excess demand for capital to deal with refinancings over next few years and to help fill the well-published funding gap. It is a perfect lenders’ market where higher returns can be achieved from lower LTV loans combined with tighter security structures. The coming years are expected to offer a prime vintage for real estate debt investments in Europe, characterised by a compelling risk-return profile. Nonetheless, maintaining strict investment discipline and focusing on quality loans backed by strong sponsors and resilient assets remains crucial.
Investment principles & strategy
Our strategies are focused on sectors where underlying fundamentals support occupier demand and where we can have impact on assets. The key principle therefore is proximity to our assets with local specialised teams that have a deep understanding of the market, the capability to execute the strategy and deliver value to our investors. This is supported by a solid track record.
in our target markets, strong deal sourcing capabilities and the involvement and commitment of senior management. We believe that investments in sustainability provide an opportunity to serve tenants, drive rents, improve the quality of buildings while also offering above average returns. Our investment process is based on a structured and disciplined approach supported by market research and thorough risk management. Investment decisions are structurally reviewed and the underlying asset and portfolio business plans are adjusted accordingly in order to ensure that the income remains sustainable and to maximise value creation.
Strategic corporate development
Edmond de Rothschild REIM provides focused and specialist investment and asset management solutions to institutional investors, family offices and professional investors through funds, separate account mandates, clubs and joint ventures. We target specific markets where underlying occupier fundamentals are strong and are expected to deliver above average rental growth. Examples are industrial and logistics, residential, real estate debt, modern amenity-rich city centre offices and life science assets. We apply a flexible approach as to how to serve investors’ interest and the structuring of the mandate in order to establish alignment of interest and a long-term sustainable and mutually beneficial relationship. Dependent on our client’s requirements, we focus on sustainable income and capital growth in order to achieve the right balance between risk and return. In all our strategies, sustainability is a crucial theme as we adopt the industry-wide objectives of reducing carbon emissions. Substantial social impact can be achieved by investing in residential and affordable housing. Furthermore, our house view is that ESG-related investments offer above average returns.
Our priorities are to improve the sustainability of existing assets, put users at the heart of our approach and act with meaning and commitment by systematically integrating sustainability considerations into our operational and investment processes.
Performance verification
Performance figures are based on the local accounting principles or IFRS and externally audited. For funds, the INREV valuation principles are applied and also confirmed by an external audit.
COMPLIANCE STATEMENT
The information provided in this document should not be considered as an offer, an inducement, or a solicitation to deal by anyone in any jurisdiction where it would be unlawful or where the person providing it is not qualified to do so. It is not intended to constitute, and should not be construed as investment, legal, or tax advice, nor as a recommendation to buy, sell or continue to hold any investment.
The figures, comments, forward looking statements and elements provided in this document reflect the opinion of Edmond de Rothschild Group on market trends based on economic data and information available as of today. In addition, Edmond de Rothschild Group shall assume no liability for the quality or accuracy of information/economic data provided by third parties.
Edmond de Rothschild REIM (Suisse) S.A. is regulated by FINMA in Switzerland, Edmond de Rothschild Real Estate Investment Capital (UK) LLP is regulated by the FCA in the UK and Edmond de Rothschild REIM (France) S.A.S. is regulated by AMF in France.
© Edmond de Rothschild
