Global Cities Real Estate

Helping you invest in companies that own the best real estate

Schroder ISF Global Cities

Global Cities are places where people want to live, work and play. Their key characteristics are: strong infrastructure; diverse economies; skilled labour force; and quality of life and culture. Investing in real estate within these cities gives exposure to a diverse range of sectors and access to economies that are expected to outperform national averages.

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Easy access to property

Real estate companies are listed on stock exchanges, meaning they’re tradeable securities – a partial share in the underlying properties.

Owning property directly has limitations:

  • A large lump sum of capital is required to purchase
  • A lack of diversification (tenant and geographic risk)
  • High transaction and management costs.

And while the shares of real estate companies can move up and down on a day-to-day basis, their returns look similar to directly-invested real estate over the long-term.

Exposure to commercial real estate

Going global can help provide diversification away from owning only property in one country.

Risk is spread across a number of properties and companies, rather than relying on the success of one or two. Global Cities’ investments rely on identifying the best operators in locations where the economic demand is greatest. This results in higher rents, the bedrock of real estate investing.

The team believes these cities are the real estate ‘winners’ of tomorrow as they could be home to the most in-demand real estate.

Access cutting-edge data insights

Data is at the heart of the index and the team use data to give them an active edge.

This approach is unique in listed real estate investing and is the foundation of the Global Cities' approach.

The team has a database and can identify the location of all the assets held in the portfolio. This means each company held has a Global Cities score: the higher the score the more likely a company is to be in the portfolio.

Capture urbanisation trends

Urbanisation will, in the team’s view, be one of the most important investment themes of the next 10 years. Global Cities sits at the centre of this theme.

Economic activity is centred in cities. Picking the cities that will gain greater share of the global economy will underpin the demand for the assets the team invests in. This long-term approach is crucial when investing in Global Cities.

The scale and diversity of the strongest Global Cities, means the team can invest in different real estate sectors, such as data centres, self-storage and manufactured homes. This is in addition to the more conventional real estate sectors such as offices, retail and industrial.

Choice means the team can gain exposure to pockets of demand both in a sub-sector and a city, without incurring the challenge of liquidity and transaction costs of a direct real estate fund.

Benefit from exposure across multiple-channels 

Schroders Global Cities invests in real estate companies across:

  • Residential
  • Retail
  • Office
  • Data centres
  • Storage
  • Industrial

Risk considerations

  • Counterparty risk: The fund may have contractual agreements with counterparties. If a counterparty is unable to fulfil their obligations, the sum that they owe to the fund may be lost in part or in whole.
  • Currency risk: The fund may lose value as a result of movements in foreign exchange rates.
  • Derivatives risk – efficient portfolio management: Derivatives may be used to manage the portfolio efficiently. A derivative may not perform as expected, may create losses greater than the cost of the derivative and may result in losses to the fund.
  • Emerging Markets & Frontier risk: Emerging markets, and especially frontier markets, generally carry greater political, legal, counterparty, operational and liquidity risk than developed markets.
  • IBOR risk: The transition of the financial markets away from the use of interbank offered rates (IBORs) to alternative reference rates may impact the valuation of certain holdings and disrupt liquidity in certain instruments. This may impact the investment performance of the fund.
  • Liquidity risk: In difficult market conditions, the fund may not be able to sell a security for full value or at all. This could affect performance and could cause the fund to defer or suspend redemptions of its shares.
  • Market risk: The value of investments can go up and down and an investor may not get back the amount initially invested.
  • Operational risk: Operational processes, including those related to the safekeeping of assets, may fail. This may result in losses to the fund
  • Performance risk: Investment objectives express an intended result but there is no guarantee that such a result will be achieved. Depending on market conditions and the macro economic environment, investment objectives may become more difficult to achieve.
  • Real Estate and Property risk: Real estate investments are subject to a variety of risk conditions such as economic conditions, changes in laws (e.g. environmental and zoning) and other influences on the market.

Important information:

For professional investors and advisers only. The material is not suitable for retail clients. We define "Professional Investors" as those who have the appropriate expertise and knowledge e.g. asset managers, distributors and financial intermediaries

This information is a marketing communication. This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy. Information herein is believed to be reliable but we do not warrant its completeness or accuracy. Schroders has expressed its own views and opinions in this document and these may change. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.  Exchange rate changes may cause the value of any overseas investments to rise or fall. Past Performance is not a guide to future performance and may not be repeated. This document does not constitute an offer to anyone, or a solicitation by anyone, to subscribe for shares of Schroder International Selection Fund (the “Company”). Nothing in this document should be construed as advice and is therefore not a recommendation to buy or sell shares.

Subscriptions for shares of the Company can only be made on the basis of its latest Key Investor Information Document and prospectus, together with the latest audited annual report (and subsequent unaudited semi-annual report, if published), copies of which can be obtained, free of charge, from Schroder Investment Management (Europe) S.A.

Issued in December 2020 by Schroders Investment Management Ltd registration number: 01893220 (Incorporated in England and Wales) is authorised and regulated in the UK by the Financial Conduct Authority and an authorised financial services provider in South Africa FSP No: 48998.

Schroders is a world-class asset manager operating from 37 locations across Europe, the Americas, Asia, the Middle East and Africa.

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*Schroder International Selection Fund will be referred to as Schroder ISF throughout this website

Important Information

Collective investment schemes are generally medium to long-term investments.

The value of participatory interests or the investment may go down as well as up.

Past performance is not necessarily a guide to future performance.

Collective investment schemes are traded at ruling prices and can engage in borrowing and scrip lending.

A schedule of fees and charges and maximum commissions is available on request from the manager

The manager does not provide any guarantee either with respect to the capital or the return of a portfolio

The performance is calculated for the portfolio. The individual investor performance may differ as a result of initial fees, the actual investment date, the date of reinvestment and dividend withholding tax. All fund performance data are on a NAV to NAV basis, net income reinvested and net of ongoing charges and transaction costs. Data is not available for the time periods with no % growth stated. In case a share class is created after the fund's launch date, a simulated past performance is used, based upon the performance of an existing share class within the fund, taking into account the difference in the ongoing charges and the portfolio transaction costs, and including the impact of any performance fees if applicable.

Annualised return is the weighted average compound growth rate over the period measured.