COPENHAGEN, DENMARK / ACCESSWIRE / October 21, 2022 / Simple, the global insights and knowledge platform for private wealth owners and family offices just released its first annual Real Estate for Family Offices Review. Family offices have a particularly keen interest in real estate. As with any asset class, different stages of investing in real estate require different resources, tools, and expertise – and this is what Simple aims to provide in one place with this asset-class review.
Real estate is widely viewed as a key component of a well-balanced portfolio and it’s estimated that two-thirds of all global real assets lie in real estate. Real estate is a multifaceted and diverse asset class and investing in it decreases liquidity and requires longer time horizons than many other asset classes.
Within this landscape, there are a number of different approaches for family offices to take in real estate. Be it family offices that grew wealthy through real estate and continue to hold the majority of their assets in the sector, or those that turn to real estate to diversify their portfolios with targeted allocations or even looking to real estate for returns not available in listed equities.
Three key outtakes from this review include:
- Traditional subclasses and the rise of non-traditional subclasses.
- Real estate is typically divided into four traditional subclasses: residential, commercial, industrial, and undeveloped land. Real estate investors and funds typically identify strategies within these categories. In addition to these traditional subclasses, student housing, medical facilities and assisted living communities are considered non-traditional classes and are gathering increasing attention from large investors, including family offices
- Megatrends: Where is the world going and will real estate follow or lead the way?
- Digital disruption, the climate crisis and demographic shifts are just some of the six megatrends influencing the world. When considering property investments, it’s vital to take a broad view of these societal megatrends. Where is the world economy going? What will society look like in ten, twenty-five, or fifty years? How and where will people choose to live and work?
- The primary real estate strategies:
- The four primary ways for family offices to gain exposure to real estate are direct investments, funds, co-investments, and real estate investment trusts (REITs). Each investment vehicle has distinct advantages and disadvantages, how do family offices consider these in relation to their interest in the asset class?
- ESG and its role in real estate
- How are family offices increasing their commitments to creating lasting legacies via their real estate investments? Could real estate be one of the clearest avenues for family offices to directly impact the environment and society through their investments?
According to Simple founder, Francois Botha:
“Family offices are no strangers when it comes to bricks and mortar – this is even where many family offices originated, in the case of in-house in real estate companies. Simple knew that in researching this topic, we wouldn’t have to demystify it, but rather look at three shifts that call for a deeper dive into this asset class. Firstly, new wealth owners, such as tech entrepreneurs who have never been exposed to this traditional asset class and might not be as familiar with the lexicon of real estate. Second, next-generation owners who want to make a difference through real estate on a social and environmental level. And third, anyone else with an interest in property, who would like to have a more structured view from a strategic asset allocation perspective.”
The review is produced by Simple’s internal research team along with input from selected industry experts, family offices, service providers and members of Simple’s expert network.
The review is available to Simple platform users and registration for an account is free.
Simple is a next-generation insights lab focused on helping family offices and private investors to professionalise and be future-fit. We publish cutting-edge insights and reviews which are co-created with our global network of experts.
These insights range from entry-level questions such as “What is a family office” to more specific matters relating to operations, technology and infrastructure. The membership platform provides access to ready-to-use content, as well as a global expert community.
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