This compelling discussion with Gravis’ Matthew Norris and George Nikolaou reveals why powerful mega trends and other 21st century developments are providing significant opportunities for real estate investors who know where to look for value.
Today’s economic environment is one of the most challenging on record. That’s why IFA Magazine’s real estate webinar, which took place over the summer, looking at how property investment can offer a hedge against inflation, made a refreshing change.
It provided an excellent opportunity for advisers and wealth managers to hear a particularly positive investment outlook from Gravis’ Matthew Norris and George Nikolaou.
They explained the various threats – and more notably, the considerable opportunities – facing property investors in today’s challenging market conditions.
A large audience of advisers and wealth managers tuned in live on the day and we’ve had plenty of excellent feedback showing they clearly found Norris and Nikolaou’s views and outlooks on the topics discussed to be of value.
The search for golden nuggets
During the discussion, Norris, who is Director of Real Estate Securities and the fund adviser to the VT Gravis UK Listed Property Fund, candidly talked through why he believes that the real estate sector, which he clearly knows so well, is strongly positioned to deliver growth for investors.
Of course, the economic backdrop is challenging to say the least. UK inflation is at a 40 year high and, with the Bank of England forecasting a peak of over 13% by October, there is clearly more pain for consumers and businesses in the months to come.
Investors are clearly concerned, not only about the perilous implications of inflation, but also threats of recession and stagflation. They are also on the lookout for possible solutions which might enable them to mitigate the worst effects of these threats by diversifying the asset allocation strategy of their clients’ investment portfolios.
The real estate solution
Historically, real estate has been viewed as an asset class which can offer some protection – or act to some degree as a hedge – for investors during periods of rising inflation.
The VT Gravis UK listed Property (PAIF) Fund (GULP) is an open-ended fund which invests in listed real estate companies – primarily in real estate investment trusts (REITs) and real estate operating companies (REOCs). What differentiates it from its competitors is a focus on powerful multi-year mega trends, such as an ageing population, generation rent, digitalisation and urbanisation. These are all trends that the fund’s management team believe to be creating favourable tailwinds for investors.
Norris and Nikolaou discussed how investing in property through REITs and by focusing on these powerful mega trends, they are finding clear opportunities for growth, as well as income for investors. As they delve into the technicalities, their perspective and insight is both thought provoking and compelling.
One key benefit that they see from investing in this asset class is the inbuilt inflation protection that it can provide. Through investing in companies which own buildings that have property leases which are contractually linked to inflation rates, they are able to offer investors protection from the rises that we have been seeing in recent months.
The pair highlight healthcare, a sector set to benefit from the UK’s ageing demographic, as having a notably high level of inflation protection, with those companies with considerable exposure to care homes at a particular advantage. These companies tend to have a very high level of income which is CPI/RPI linked, thus providing protection to investors from rate rises.
In addition to talking about particular areas of the real estate universe which can offer good inflation protection – and why and how they are achieving this – Norris and Nikolaou also talk about the benefits of investing in REITs compared to investing into direct property, and how this underpins the foundations of the Fund. They clearly identify the risks which can be involved when investing in the asset class – including liquidity risk, something that has been at the front of people’s minds since so many property funds suffered from gating in the period post-Brexit – although they do explain how these can be mitigated. They also talk through the biggest challenges facing property investors like themselves.
Norris is articulate in the way he summarises the opportunities he and his team face, which focus on the importance of growth income, not fixed income, on how quality trumps value when it comes to real estate investing and, of course, the mega trends which are offering such significant opportunities. https://ifamagazine.com/article/ready-for-a-positiveview-on-property-investment-as-a-hedge-againstinflation-check-out-the-recording-of-our-latest-webinar/
check out the details
Listen to the webinar recording to discover the answers to questions such as:
- What areas of the real estate universe are currently offering good inflation protection – and how are they achieving that?
- Where are the most attractive opportunities in REITs and mega trends?
- What are the risks involved – including liquidity – and how can these be mitigated?
- What are the biggest challenges currently facing property investors?
About Matthew Norris
Matthew is a fund manager and Director of Real Estate Securities at Gravis. He is responsible for the oversight of the VT Gravis UK Listed Property Fund and the VT Gravis Digital Infrastructure Income Fund.
Matthew has more than two decades investment management experience and has a specialist focus on real estate securities. He served as an Executive Director of Grosvenor Europe where he was responsible for global real estate securities strategies. He joined Grosvenor following roles managing equity funds at Fulcrum Asset Management and Buttonwood Capital Partners. He also provides expert input to research projects run by EPRA, which focus on the importance of emergent real estate sectors.
Matthew graduated with a degree in Economics & Politics from the University of York. He is a CFA charterholder and holds the IMC.
About George Nikolaou
George is a Senior Research Analyst at Gravis. He is responsible for investment analysis and research, covering areas such as listed infrastructure (e.g. core, digital & clean energy infrastructure equities) and real estate (e.g. REITS and REOCS).
George joined Gravis in 2021 having spent 7 years working as a portfolio manager and analyst within the investment management sector.
He has a MSc Finance and Investment from the University of Durham and a BSc Economics from the University of Athens and is a CFA Charterholder. George also holds the IMC and the CFA UK – Certificate in ESG investing.