IPF News

IPF Commissions Investigation into Operational Real Estate

14 Jul 2020

alice-photo-London-city-banner2.jpg

Operational Real Estate is currently most associated with alternative real estate types and, for many investors, is seen as complex, illiquid and higher risk. However, deal volumes are increasing as both specialist and core funds add this category of investment to their portfolios, attracted to the opportunity it offers to capture the extra upside associated with well‐run businesses. 


The IPF Research Programme has commissioned a team, led by Didobi Limited, to address the attributes of risk associated with investing in operational real estate that are unfamiliar to many real estate professionals. 


Bill Page, Head of Real Estate Markets Research at Legal & General Investment Management Real Assets, who is chairing the Project Steering Group (PSG) overseeing the research, comments: “We are delighted to be drawing on the strengths and talents of leading real estate practitioners and academics to carry out this study. It will address key questions on how the investment community should assess risk in operational real estate and use it in within recognised investment modelling and portfolio construction techniques. It will also examine in detail how the market approaches investment currently and what can/should be done to bridge the gap between theory and practise.” 


Didobi Director and Co‐Founder, Matthew Hopkinson will be leading a team of researchers drawn from Didobi and Heriot‐Watt and Nottingham Trent Universities. Commenting on the work they will be undertaking, Matthew said: “Operational Real Estate is an important asset class within the sector and, as such, we are delighted to have won this IPF research project, in partnership with Heriot Watt and Nottingham Trent Universities, to deliver a comprehensive analysis of the theory and practice of operational real estate. We look forward to engaging with key industry practitioners over the coming weeks as part of our evidence gathering and to presenting our report later in the year.” 


Other members of the PSG comprise David Hourihan (University College of Estate Management and member of the IPF’s Research Steering Group), Paul Kennedy (J.P. Morgan Asset Management) and Robert Holl (The Wellcome Trust). 
The research findings are scheduled for publication in November 2020.