25 Mar 2024

Investec launches real estate equity strategy with £250m deployment target

  • Value-add strategy will leverage Investec’s unique 30-year real estate platform and global operating partner network
  • Off-market acquisition of highly sustainable regional office is the first from a £150 million pipeline
  • Rapid UK commercial real estate repricing offers attractive entry point into sector

 

Investec has launched a new real estate equity strategy, Investec REALIS (“REALIS”), providing investors with deal-by-deal access to institutional-quality UK real estate and the attractive returns it offers.

Investec will commit equity to every acquisition alongside investors, who will benefit from the former’s established, data-led deal origination platform. This platform has enabled Investec to build a c.£3 billion loan book and strong global network of 150+ operating partners. The strength of this position is core to REALIS’ ability to deliver value-add and opportunistic returns, leveraging Investec’s significant data and in-depth investment expertise.

Over the next two years, REALIS is seeking to deploy, with leverage, £250 million into two main investment theses. These are asset development or repositioning, with a focus on highly liquid markets; and distressed transactions, where the underlying investment benefits from strong long-term fundamentals.

The strategy is led by Yon Papageorgiou, Head of Real Estate Equity Investments, who joined Investec in August 2022 from TwentyTwo Real Estate.

The launch of REALIS follows a period of rapid repricing within select parts of the real estate market. This, coupled with increasing distress in certain sectors, offers an attractive entry point for investors with no legacy issues.

REALIS recently closed its first investment – acquiring a recently refurbished, 45,500 sq ft Grade-A, EPC A rated office in central Guildford. The transaction was funded with equity commitments from investors based in the UK and the Channel Islands, Switzerland and South Africa.

Yon Papageorgiou, Head of Real Estate Equity Investments at Investec, said: “What differentiates this strategy is the combination of Investec’s 30-year through-the-cycle track record, its data-led approach to investing and its unparalleled network of best-in-class operating partners. All these factors mean we are uniquely placed to access off-market opportunities at attractive pricing and then execute a business plan that generates significant outperformance.”

“UK commercial real estate is witnessing an unprecedented repricing moment and, along with a currency advantage, offers investors a compelling entry point into the asset class. Closing this first acquisition, in one of our high conviction sectors, is a significant milestone. With a £150 million near term pipeline, we look forward to accelerating our AUM growth in 2024.”

Mark Bladon, Head of Investec Real Estate, added: “Our equity strategy has been launched in direct response to demand from our global client base. Our clients recognise the attractive total return characteristics that UK real estate can offer and the benefits of accessing it via one of the UK’s most active platforms, led by a highly experienced team.”