European long lease real estate: a defensive alternative

14/08/2018

In a low-yield environment, institutional investors are increasingly seeking secure and growing long-term cashflows, an outcome that European long lease real estate is well-positioned to offer.

  • Long lease real estate can offer inflation protection and smoother rental payments than traditional real estate
  • Long lease real estate has the potential to generate comparable total returns to a traditional core real estate strategy over the long term, with lower volatility
  • There is scope for a significant yield premium over equivalent-rated public bonds, offering attractive relative value and a buffer against potential pressure from rising long-term interest rates

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The value of investments will fluctuate, which will cause prices to fall as well as rise and investors may not get back the original amount they invested.