Patient capital in real estate investment

We have now hosted our third insightful discussion on patient capital in real estate investment, in our series of “on the sofa with…..”.

Patient capital investment represents a long-term commitment to a real estate development project.  It is made by investors who can wait for a return on their capital through the whole development cycle of a project.  It is a key feature of the master-developer model seen to its best effect on large-scale strategic sites.  Patient capital allows a holistic approach to place-making, community and sustainable development, providing augmented returns from the added value of higher quality achieved over a longer time-frame.

Following on from our last two sessions, Carina Cobbold was joined by Anna Rule of RPMI Railpen,  Alistair Meadows of JLL and Charles Staveley head of Mills & Reeve Real Estate Investment sector to discuss institutional fund investment and the evolving nature of such investments.

Alistair’s international experience allowed him to draw on the worldwide trends being seen noting in particular that, despite Brexit, the UK remains the second most attractive investment market for global equity.  Anna and Charles were able to offer a key insight into the current and future investment trends and the motivation for patient capital, in particular those trade classes which provide social responsibility such as renewable energy and life sciences all of which have are seen as positive impact investments.

We learned about the shift from the more traditional real estate investment models towards more diverse sectors, Anna picking up on the impact of growth/return linked investments with key interest in infrastructure and long term patient real estate citing the “J curve” discussed in our previous on the sofa sessions whereby investors may be more inclined to suffer initial pain before they can see the long term gain.  It was interesting to hear the forecasts from the panel for the future following the lock down impact on the economy.  All agreed that the economy is set for a rebound and there is much to be positive about.  Fundamentally, with interest rates set to stay low real estate retains its appeal to investors on a global basis.

There is much to be optimistic about in this sector as our panel discussed so please do take the opportunity to watch a recording of the discussion, On the sofa with Alistair Meadows, Anna Rule and Charles Staveley, hosted by Carina Cobbold here.