Invested in a different approach

Although it operates in an investment setting, Heitman sees itself less as a financial services company and more of an expert in real estate. “Our competitors include big name investment banks with backgrounds in stock market-based investment instruments and financial products,” explains Charles P. Robinson, Managing Director Client Service & Marketing EMEA. “We come from a real estate background and deal in tangible assets in all our investment activities.”

Heitman is a global real estate investment company, headquartered in Chicago, with ten offices worldwide. Founded in 1966, it first set up a base in Europe two decades ago. “London is the headquarters of our European operations,” says Tony Smedley, Managing Director and Head of European Private Equity. “In this region, we invest on a pan-European basis but, as a global organization, we are active throughout the world.”

In addition to London, Heitman also has offices in Frankfurt and Luxembourg. The company is not a household name as some are in the investment sector, but that is seen as an advantage by many of its customers. “Most of the institutions we work with maintain a relatively discreet presence in the market, as do we,” notes Mr. Robinson. “Our style here in London is very different to the typical American stereotype – softly spoken and modest.”

Nevertheless, Heitman is plainspeaking about its ability to generate returns for its clients. “Communication transparency and honesty are the cornerstones of our customer relations,” insists Mr. Robinson. “We are especially valued for our expertise in private real estate, which is traditionally seen as a more resilient investment in uncertain times.”

And the times could not be any more uncertain than the present as the spiralling coronavirus crisis has sent financial markets worldwide tumbling. “Investors were already nervous about the global economy and the public markets,” Mr. Robinson adds. “Add to that uncertainty an additional cut to interest rates by the Bank of England and investors are desperately seeking positive income solutions.”

Real estate has been Heitman’s core business for 50 years and continues to be its most successful area of activity. “Private equity is the bedrock of the company,” says Mr. Smedley. “We lead the market with our experience which spans both traditional property categories such as office, industrial, rented residential and retail, and speciality real estate such as self-storage, senior housing and student housing. Here, it is our local expertise that makes the difference, and our focus on in-depth research in creating and refining our investment strategies.”

Research forms the backbone of all of Heitman’s investments, whether in identifying mispriced sectors, growth markets or properties with investment potential, and defining their position on the risk/ return spectrum. This research also serves to identify micro and macro trends in local markets. “We tend to prefer micro over macro,” states Mr. Smedley. “You need local expertise which is why our focus is on growth cities with longer term investment potential.” With over 45 billion USD in assets under management worldwide, Heitman has a proven track record in spotting and capitalizing on emerging trends.

“We have been very successful in the residential, senior and student housing sectors. In addition, we owned, operated and managed the largest pan-European self-storage business, which we took to IPO in 2018,” says Mr. Robinson. “We have seen significant performance growth in these non-traditional markets. There is a shortage of rental accommodation across all segments in the EU, which provides us with an emerging opportunity. When we look across the pond to the US, these markets are now very mature. Here in Europe, we expect to head in the same direction and want to offer our investors the opportunity to access institutionalizing sectors.”

A further area into which the European business expects to grow is private real estate debt, capitalizing on a successful US strategy. Another significant trend to which Heitman is already fully committed is corporate responsibility. The watchword here is ESG or Environmental Social Governance.

“ESG considerations are embedded into our investment processes so that as well as generating returns for our clients, they also benefit wider societal goals,” describes Mr. Smedley. “The last twelve months have also seen us really step up measures to increase diversity and train people to be aware of unconscious bias.”

As a privately owned company whose shareholders are its senior managers, Heitman is free to make such considerations a priority. For Mr. Robinson, who joined the company earlier this year, this was a big reason for making the move. “I came here for several reasons but key among them was the unique culture and private ownership structure,” he notes. “I had been aware of the company for seven years before joining and feel very privileged to now be part of this team. There is a very dynamic and entrepreneurial culture here that is very appealing, and a real sense of inclusiveness.”