Global Real Estate Total Return

The benefits of a global real estate portfolio, all from a single point of access

Global commercial real estate markets present a diverse set of investment opportunities for creating income and growth from a tangible value base. Over the past 20 years institutional investors have steadily increased their allocations to real estate to over 10% today.* Meanwhile, a majority of individual investors have not had an entry point to the best investment opportunities and as a result have little to no exposure to the sector and the potential benefits available. GRETR is designed to enable individual investors access to institutional real estate strategies, that are diversified globally across sectors and countries, debt and equity, listed and direct real estate.

*Source: Prequin Investor Outlook: Alternative Assets, H1 2023

Strategy

The aim of this strategy is to provide a balanced long term building block for real estate in a portfolio, by combining:

  • Income strategies focused on collecting stable and secure cash flows from highly defensive assets.
  • Growth strategies seeking to enhances returns by adding value through redeveloping, renovating and managing existing buildings.

GRETR aims to be truly global and seek a complementary balance between execution styles, as follows:

  • Primary allocation to private real estate equity opportunities via proven strategies and in-demand direct investments.
  • Supporting allocation to real estate debt where stable yields can benefit from solid collateral.
  • Supporting allocation to listed real estate/REITs allowing efficient liquidity management and immediate access to benefit from market dislocations.

Finally, GRETR has a semi-liquid structure enhancing individual investors' ability to periodically buy or sell in order to match strategic asset allocations and align with their objectives while preserving collective value for all investors.

Democratisation in real estate

Listen to our experts talk about the benefits of incorporating real estate into your client's investment portfolio.

Why global real estate?

The Fund aims to provide income and capital growth by investing directly or indirectly in a range of private and public real estate investments worldwide, to benefit from:

  • Stable income profile: Real estate typically offers a stable income return through the payment of rent over the length of a lease. An asset’s rental income often provides contractual inflation-linked income over the medium term.
  • Diversification: Historically, real estate returns have a low correlation to broad equity markets and offer diversification benefits to existing equity and bond holdings.
  • Store of value: As a physical asset, real estate may act as a store of value. Compared to a bond or equity where capital can be lost on default, a tenant default allows the landlord to replace them with a new tenant while value remains stored in the land or building.
  • Income and capital growth: There is the potential for income growth and capital appreciation through favourable demand/supply dynamics and active management.
  • Control of the investment: As a physical asset, real estate managers own and manage properties with the potential to add value through focused asset management initiatives.
  • Contribution to the sustainability imperative: As real estate represents a significant lever for achieving net zero targets and strong environmental credentials have become a key driver of financial value.

Ever-changing market conditions create compelling opportunities for flexible strategies across the real estate spectrum

The Global Real Estate Total Return Fund is pursuing a thematic investment strategy supported by long-term secular trends.

Technology and the knowledge economy

The interface for work has shifted, consolidating value in those buildings which address specific needs and evolving tenant preferences.

Individualism and supply chains

Changing preferences have been accelerated by the COVID-19 pandemic, deepening disparities in demand between and within related sectors.

Ageing populations and demographic shifts

Rapidly changing demographic profiles are rebalancing the accommodation markets, with systemic undersupply in some sectors.

People and places – SCRE’s ESG pillars

Higher industry and regulatory standards demand a holistic approach to the creation of value for investors and communities.

Flexible strategy with portfolio allocations led by relative value and prevailing best ideas:

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Meet the team

Global Real Estate Total Return Fund

Slide 1 of 3

Kieran Farrelly

Head of Global Solutions, Real Estate

Yim-Mei Liew

Portfolio Manager

Maximilian Eves-Van Den Akker

Product Manager

    Explore our focus funds and strategies

    Risk considerations

    Prospective investors should be aware of the associated risks and special factors of the Real Estate asset class which are not related to investments in traditional listed instruments. Attention is drawn to the following specific risks:

    • Investment risk: The performance of the Fund will be affected by specific property risks including, amongst other matters, changes in property market conditions leading to an oversupply of space or a reduction in tenant demand for a particular type of property in a given market; the quality of property available; the ability of the Fund to maintain the recoverability of service charges and other expenditure and to control the cost of these items; the risk that one or more tenants may be unable to meet their obligations, particularly in times of economic downturn. An investment in the Fund should be thought of as a long-term investment.
    • Capital loss risk: The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.
    • Market risk: Market risk is the risk of investment losses due to negative effects of the capital markets on the overall performance of the fund.
    • Credit risk: The fund will have an investor commitment/draw-down funding model which exposes the investment vehicle to the credit risk of its investors. If an investor fails to comply with a drawdown notice, the investment vehicle may be unable to pay its obligations when due.
    • Liquidity risk: Given the illiquid nature of private real estate investments, investing in private real estate is subject to asset liquidity risk. This liquidity risk is a result of the likelihood that a loss from current net asset value would be realised if an asset in the fund needed to be sold quickly in the secondary market to meet the obligations of the fund.
    • Currency risk: Investments in assets which are denominated in currencies other than the fund’s respective currency expose the fund to the risk of losses in case foreign currencies depreciate.
    • Operational risk: Operational risks are risks of loss resulting from inadequate or failed internal processes, people and systems, or from external events conducted by Schroders Capital and the managers the fund will invest alongside.
    • Valuation risk: It may be difficult to find appropriate pricing references in respect of unlisted investments. This difficulty may have an impact on the valuation of the portfolio of investments of a Sub-Fund. Certain investments are valued on the basis of estimated prices and therefore subject to potentially greater pricing uncertainties than listed securities.
    • Performance risk: Investment objectives express an intended result but there is no guarantee that such a result will be achieved. Depending on market conditions and the macro-economic environment, investment objectives may become more difficult to achieve.