Principal Real Estate Investors is the dedicated real estate investment group within Principal Global Investors, a global investment management leader, tracing our history back over more than six decades of real estate investment experience.
Over that time we’ve built a top-tier investment platform that provides comprehensive, specialised capabilities across all four quadrants of commercial real estate – public and private equity, public and private debt. This platform gives us a unique perspective on real estate space and capital markets, allowing us to deliver solutions that meet our clients’ investment goals, including sustainability and risk management guidelines.
Our four quadrant investment platform includes:
• Private market equity including core, value-add and opportunistic separate accounts and commingled funds.
• Core mortgage origination and loan servicing including whole loan, mezzanine and high-yield debt strategies.
• Public market strategies including US CMBS and global & regional global property securities, both of which are available through our UCITS fund platform.
In April 2018, Principal added significant European real estate expertise with the acquisition of Internos, a pan-European investment manager. Now rebranded Principal Real Estate Europe and headquartered in London, it manages €2.8bn across all property sectors in a range of core, opportunistic and thematic real estate strategies.
Investment principles & strategy
Investors increasingly want solutions they can customize, that meet their unique risk and return objectives. Principal Real Estate Investors is able to deliver these solutions, because we aren’t limited to one commercial real estate strategy.
Broad market access
Our diverse investment teams, located in the US, Europe, Asia and Australia have deep relationships within the industry, giving us preferred access to commercial real estate investment opportunities. This broad access also contributes to our research, allowing us to continuously incorporate real-time data and information into our underwriting and investment decisions.
Our investment process is team-oriented, multi-disciplined, and research based. Research is fundamental to our ability to assess relative value both within and across quadrants, and to deliver on our clients’ investment goals. The foundation for our investment decisions is a combination of top-down economic and sector analysis with bottom-up asset analysis, providing our investment professionals with the insights they need to successfully execute strategies.
Top-down analysis: Our deep macroeconomic and microeconomic research incorporates analysis of economic, demographic, political, technological, property, and capital market trends. We use current forecasts to develop a firm-wide consensus outlook for domestic and global economies and capital markets.
Bottom-up research: Data from our extensive equity and debt transaction, leasing, and asset management portfolio is combined with external and capital markets knowledge to develop forecasts for the metropolitan statistical areas that we cover. To determine relative value, we also use capital markets information including cap rate and pricing trends. This helps us evaluate whether current commercial real estate market trends are accurately priced.
Each quadrant’s team of investment professionals uses our top-down and bottom-up data to drive their investment decisions. Research insights are also shared across teams, as well as with our clients and the industry in general, through monthly, quarterly, and annual publications.
Consistent, risk-adjusted performance
Our goal is to deliver consistent, risk-adjusted performance and superior service. Our market reach and research are vital to achieving this goal - and so is our commitment to innovation, whether it be sustainable investing or the “next generation” investment strategy or solution.
Responsible property investing
Principal Real Estate Investors has a long-standing commitment to corporate stewardship and an established track record in responsible property investing. In 2010, we formalised this commitment by becoming a signatory to the Principles for Responsible Investment (PRI).
In 2013, we adapted and evolved the important philosophy of the PRI into our own Pillars of Responsible Property Investing initiative.
This initiative demonstrates our commitment to the PRI, and is a natural progression of our sustainable investment philosophy. As our clients’ fiduciaries, we view this framework, alongside other financial and non-financial investment criteria, as vital to delivering on our client’s long-term best interests.
In short, we believe that Responsible Property Investing is critical to superior asset management and fiduciary governance and helping to deliver positive financial and environmental outcomes. We welcome the opportunity to work with our clients and stakeholders to make this belief a reality.
Principal Real Estate Investors’ latest insights, including its semi-annual Inside Real Estate outlook which includes sector forecasts among other research, are available on its public website at www.principalrealestateinvestors.com or on our dedicated IPE Reference Hub profile.
COMPLIANCE STATEMENT | Principal Global Investors maintains an in-house compliance department covering all asset classes and Principal Real Estate Investors. The Chief Compliance Officer oversees the review of the business activities, fiduciary conduct and compliance with state and federal securities loans of our investment professionals, affiliated entities and business partners.
News from Principal Real Estate Investors
Demonstrating continued excellence in sustainability and responsible property investing practices, Principal Real Estate Investors is pleased to announce its recent “Green Star” and “4-star” ratings on two funds by GRESB, the global benchmark for real assets, and an overall A score from the Principles for Responsible Investment.
Principal completes acquisition of INTERNOS Global Investors to expand real estate investment capabilities in Europe
Principal Global Investors today announces the completion of the acquisition of INTERNOS Global Investors, the UK-headquartered pan-European real estate investment manager.
Principal Real Estate Investors earns 2018 ENERGY STAR Partner of the Year – Sustained Excellence Award
Principal Real Estate Investors is proud to announce that it received the 2018 ENERGY STAR® Partner of the Year Sustained Excellence Award for continued leadership and superior contributions to ENERGY STAR.
Principal Real Estate Investors has been named a 2017 ENERGY STAR Partner of the Year – Energy Management Award winner for its outstanding efforts to improve the energy efficiency of U.S. buildings and facilities through its actions.
The United Nations Principles of Responsible Investment (UN PRI) and the Global Real Estate Sustainability Benchmark (GRESB) have given Principal Real Estate Investors top ratings again for their work in responsible investing in 2016.
News from IPE Real Assets
Pension fund plans to make largest-ever commitment to a US core open-ended fund
Care Invest I now has 12 care properties, with 854 beds and 121 serviced apartments
Principal bought the asset in Levallois Perret, Paris, for SEDCO Capital
Principal European Office Fund bought the property located at Via Giovanni Battista Pirelli 18 for €34m
Michigan is also investing $244m in data centres via Principal separate account
White Papers / Research from Principal Real Estate Investors
Of the main property sectors, multifamily remains highly sought after by investors. Fundamentals are currently healthy with vacancy rates in equilibrium. Rent growth is tracking well ahead of broader inflation.
ESG in Real Estate: Why affordable urban housing can be an attractive long-term investment strategy download
In recent years, environmental, social, and governance (ESG) principles have increasingly taken centre stage in the commercial real estate investment world. This trend has been driven just as much by investors and occupiers looking to improve outcomes as by regulators seeking to set the agenda. In particular, ESG has become ever more important in urban housing given its enormous footprint and its ability to directly impact cities and the lives of residents
Tackling Task Force on Climate-Related Financial Disclosures (TCFD): Early lessons in climate risk disclosure. download
Like many of our investment management colleagues, at Principal Real Estate Investors we have noticed increased interest and questions from our investors on the topic of climate risk, whether through informal discussions or detailed RFP inquiries.
On March 22, 2019, the U.S. yield curve briefly inverted, with the difference between the three-month and 10-year yields turning negative for the first time since August 2007.
On the ground real estate fundamentals are supportive of a steady, balanced growth outlook for REIT earnings on average. Growth across sectors, countries, or companies can be quite divergent of course.
Analysis from IPE Real Assets
Germany’s care-home provision is rapidly changing and could be an important investment opportunity, says Indraneel Karlekar
New York continues to demonstrate its resilience as one of the world’s biggest global real estate investment targets. Christopher O’Dea reports
Multifamily developers and institutional investors continue to build more stock and new renters duly arrive. But, asks Christopher O’Dea, for how long?
To put ESG theory into practice, real estate fund managers need good quality data. Some are taking it on themselves to get it, writes Christopher O’Dea
The AUD2.2trn superannuation fund industry was an early proponent of real estate and infrastructure investment. Florence Chong profiles five of the biggest constituents