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Private equity real estate – adapting to the cycle and the future

Private Equity Real Estate at PIR Conference 2015 – Presentation on unlisted real estate by Folkestone’s Adrian Harrington


This is not a traditional White Paper but ‘hot off the press’ is a copy of today’s presentation to the PIR Conference 2015. It contains many useful diagrams with commentary on unlisted real estate. Given the increases in prices for most commercial real estate in recent years as yields have fallen, the presentation asks whether the sector has become overvalued. Its conclusions are:

• It’s a challenging time to be putting money to work

• Private equity real estate funds managers need to closely examine both their real estate and business strategies

• The keys to successful real estate investing are: good asset selection, properly pricing and managing risk, active asset or development management, adopting appropriate capital structures, selecting quality partners and timing of exit

• The keys to successful private real estate funds management businesses are understanding the key changes in the marketplace (economic, technology, social, demographic, environmental), enabling innovation to capitalise on market changes, fostering strong alignments with investors, best practice reporting, strong risk management processes, governance and succession planning, and decide whether to be large or a boutique manager – caught in the middle could face obsolescence.

The full presentation is available here.

 

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