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Real Estate

Home / Capabilities / Real Estate

A world-class portfolio stressing sustainable real estate investments

"We believe that a responsible, sustainable approach to real estate investment management is the only strategy which both protects and enhances the value of our clients' assets, now and in the future"

Chris Taylor

CEO, Hermes Real Estate

chris-taylor

Hermes Real Estate offers client-focused property investment solutions through segregated and pooled structures, seeking to maximise risk-adjusted returns. Hermes Real Estate is one of the largest real estate managers in the UK, with £8.3 billion* of assets under management (GAV) in both UK and international portfolios.

We are organised along client-focused investment and asset management specialisms, supported by a central team providing robust risk management oversight, research and corporate finance support. We also work in partnership with our related companies, MEPC and Argent, combining our expertise in conjunction with these specialist platforms to deliver our client offering.

The investment process adopts a top-down portfolio risk management and bottom-up property selection to target assets that are highly competitive within their local marketplaces and which have sustainable income streams. We believe it is imperative to understand how occupiers assess property in order to fully assess risk. We believe that a responsible, sustainable approach to real estate investment management is the only strategy that both protects and enhances the value of our clients’ assets, now and into the future. Therefore our principles of Responsible Property Investment (RPI) are fully integrated within our investment process.

*As at 30 June 2016. Source: Hermes Real Estate.

Our real estate products:

Vista UK Residential Real Estate

Objective: to offer a robust approach to capturing the strong and uncorrelated returns that the UK residential property can consistently deliver

Why Vista UK Residential Real Estate strategy?

  • Rare access: providing the scale, expertise and resources to allocate to an attractive but previously inaccessible market – the UK private rented sector.
  • Strong, uncorrelated returns: residential property has outperformed all UK real estate sectors for more than a decade while exhibiting low correlations.
  • Strategic partnership: with a shared focus, Hermes and Countrywide plc bring deal-sourcing capabilities, investment expertise and administrative scale.
  • National scope: investing across the UK while applying tested responsible property investment principles and setting fair rents.
  • Solid foundations: rising demand, constrained supply and political support for greater PRS investment support the market.

Investment Approach

Hermes and Countrywide plc combine the skills and resources to identify, acquire and manage assets that meet the fund’s return objectives and deliver modern purpose-built PRS housing. As fund manager, Hermes assesses each opportunity: its price, ability to attract tenants and generate strong net income yields, and its contribution to a balanced portfolio.

Key considerations include diversification of assets across the UK, a balance of income-producing and growth assets and appropriate development risk. Hermes applies tested principles of responsible property management to increase the investment returns and environmental efficiency of real estate assets, and ensuring they positively impact local communities.

The Hermes Property Unit Trust Strategy (HPUT)

The Trust invests directly in properties ranging in value from £1.2million to £101.5million. We target a wide range of carefully chosen properties – including retail, office and industrial units across the UK. Our long-term goal is to maintain a balanced portfolio with the potential to grow sustainably.

Hermes selects, owns and manages all these properties directly. All the investors in the strategy are UK pension funds or charities, committed to achieving long-term returns.

Objective: to outperform the IPD other Balanced PUT Index by 0.5% p.a. over a rolling three-year period

Why Hermes Hermes Property Unit Trust?

  • A balanced asset allocation and active stock diversification strategy looking for balanced risk and return within a single solution
  • Active property management to maximise returns and create sustainable value
  • A dedicated team of six investment professionals with over 16 years’ average industry experience
  • Oversight from a wholly independent appointments committee to ensure a responsible investment approach
  • An industry leader in environmental management

Targets cannot be guaranteed.