We believe that, while property has particular features as an investment asset class, it can in large part be analysed using similar, often customised, methodologies and disciplines used in other investment markets. 

Forecasting returns

By combining forecasts of net income growth and interest rates in the short term with researched estimates of ‘equilibrium’ valuation parameters, we can determine the prospective returns from the markets and assets we review given their current yield or pricing level.

Determining benchmarks

Working with our clients, based on their investment objectives and the competitors they seek to outperform, we establish ‘benchmarks’ and investment objectives for our client-funds.

Model portfolio

With our forecasts of prospective returns, we then establish a model portfolio to identify those markets in which client-funds should be over-weighted or under-weighted relative to the set of competitors they are seeking to outperform. These model portfolio preferences can then be overlaid on the investment structure of any client-fund benchmark, in the pursuit of relative outperformance. (Where the investment challenges set are more focused towards ‘absolute’ rather than ‘relative’ returns, bespoke strategic considerations are put in place.)

Controlling risk

By understanding how different the distribution of our client-funds’ capital across markets is to that of their benchmarks, we can assess the scale and risk of likely differential performance between fund and benchmark going forward. This ‘tracking error’ measure, combined with more common sense controls on exposures to individual markets, asset-types, property occupiers and development activities, helps us control risk in our investment portfolios.