DTZ Investors maintains a dedicated investment strategy team. This team works directly with our clients and with our Fund Managers to understand each client’s unique risk and return perspective, to devise and select appropriate benchmarks and to evaluate portfolio and asset risk metrics using a variety of proprietary risk management tools.
Our investment strategy team has valuable access to a wide range of independent third party research. The team analyses and thinks independently and creatively, to deliver original investment strategy, and to ensure continuous learning and evolutionary risk monitoring.
Investment strategy services
- Investment analysis and risk analysis for new portfolios and existing portfolios in the UK and globally
- Bespoke strategy development
Investment risk styles
DTZ Investors is active across the spectrum of property risk styles. We are active investors in core, income producing property through to development and refurbishment where significant income and re-letting risk is taken. Typically, we manage portfolios of properties where a blend of property risk exposures are taken, depending upon client risk appetite and investment return objectives.
Introducing leverage offers clients who are comfortable with the additional layer of risk scope to enhance returns. We would expect core portfolios to have less than 30% leverage as a percentage of portfolio gross asset value. We would classify any portfolio applying debt above 60% of portfolio value as opportunistic.
Core
Core investments are generally fully let to credit worthy tenants on long leases, in good locations providing a secure and predictable income stream. Opportunities to add value are limited but include lease renewals, lease re-gears, leasing of a small element of vacant space or reconfiguration of the tenant mix. Where gearing is employed in a core strategy, the loan to value ratio will be relatively low, e.g. less than 40%. Over the long term, the majority of a core asset’s total return will be attributable to income.
view case studies view case studiesCore Plus
Core Plus assets share many characteristics with Core assets in that they should be good quality buildings in strong locations. However Core Plus assets provide more active management opportunity through shorter contracted income streams, higher levels of vacancy or scope to change the use of some of the building to improve the income stream and value. The overall risk profile may be increased relative to a Core asset through employing debt at a higher loan to value ratio.
view case studies view case studiesValue Added
Value add investments rely more on the manager’s input than market movements to improve the income stream and capital value. Properties may have an element of vacancy or short leases where a repositioning of the asset is required in the short-term to improve the letting prospects such as through reconfiguration, a change of use or refurbishment. A higher loan to value ratio may contribute to an increased risk profile so that an asset is classified in the value add category. A value add investment should produce total returns from both income return and capital appreciation, and will likely move to be classified as a Core or Core Plus asset as active management initiatives are completed.
view case studies view case studiesOpportunistic investment
These are assets where the risks are likely to be greater or over a longer term than a value add asset, e.g. a speculative development or redevelopment which relies on both the manager’s judgement in embarking a development project to construct the right asset to meet the occupier market’s requirements at some point in the future, and the market conditions being good at the time of completion. Opportunistic investments may also be characterised by a high level of gearing, and are expected to generate the majority of their total return from capital growth. An investment that is opportunistic at the outset, will likely be reclassified in the lower risk categories as capital gains are crystallised at events such as construction completion and lettings
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