Commercial real estate can provide long-term returns through rental income, rental growth and capital appreciation. Investments focus on physical properties, such as offices, retail, industrial and logistics, as well as other sectors such as hotels, retirement living and leisure.
Real estate managers own and manage properties, and can potentially add value through focused active asset management. Property’s physical nature also provides a store of value for investors.
Rental income makes up the majority of long-term commercial real estate returns. This income tends to be stable for the length of the lease. An asset’s rental income can also provide inflation protection over the medium term and investors may benefit from the potential for capital growth, subject to supply and demand, as well as the asset’s income durability.