Property Equities

Combining trends and sustainability in the global property sector

Key points

  1. Investing long-term in global trends PropTech, Sustainable Cities and Lifestyle

  2. ESG fully integrated in the investment process

  3. Bottom-up stock selection based on in-depth fundamental, ESG and valuation analysis

Listed real estate is an attractive investment opportunity offering a differentiating risk/return profile and driven by a combination of growing dividends and value appreciation. We believe that long-term cash flow generation is often underappreciated, creating opportunities for alpha.

A sustainable approach is crucial given that the sector is a major CO2 emitter, and investments are needed to mitigate the risk of taxes and stranded assets. Since not all property companies face the same risks, an active, bottom-up approach is used to select the winners.

Alpha drivers

The investment process for this strategy is organized along two key sources of alpha:

Top-down trend selection
01

Top-down trend selection

Exploiting trends with long-term economic impact

Bottom-up stock selection
02

Bottom-up stock selection

Identifying those companies that can best monetize such trends

Our approach

Real estate is driven by multiple long-term global trends. The portfolio managers focus on such trends and avoid short-term noise. They prefer companies that capture a strong growth trend through better execution and/or active management.

Long-term cash flow generation in the real estate sector is often underappreciated and creates opportunities for alpha. The Real Estate strategy focuses therefore on future free cash flows instead of the static use of net asset value and dividend yield. Furthermore, companies with financially sound balance sheets and business models are preferred, as are ESG-focused companies.

Trends

The strategy invests in three trends within the portfolio for diversification purposes, which are as follows:

01

PropTech

An increased demand for high tech and specialized assets. Underlying secular growth and barriers to entry are high.

02

Sustainable Cities

Developers all over the world are building integrated commercial assets in prime locations driven by urban densification and the need for a lower environmental footprint.

03

Lifestyle

There is a housing shortage and an increased demand for rental housing. A social shift to rental lifestyles and tightening lending conditions drive growth.

Team

Our Sustainable Property Equity strategy is managed by two passionate and experienced portfolio managers. With over 40 years’ worth of investment expertise between them, they have built up a highly robust knowledge base and combine fundamental research and portfolio management within one position.

The Property Equities team cooperates closely with other investment professionals covering the property sector both from a regional and ESG angle within Robeco, including proprietary sustainability research, our in-house active ownership team, other fundamental equities teams, and quant equity research.

Folmer Pietersma - Portfolio Manager

Folmer Pietersma
Portfolio Manager

Listed real estate offers a differentiating risk- return profile driven by growing dividends and value appreciation

Sustainability

This strategy promotes, among other characteristics, environmental and/or social characteristics, which can include exclusionary screening, ESG integration, ESG risk monitoring and active ownership. It is classified as Article 8 under the EU Sustainable Finance Disclosure Regulation.

The Sustainable Property Equities team has fully integrated ESG criteria into its investment analysis and decision-making process. They take ESG directly into account the valuation of stocks by making adjustments to the value drivers of a company, if appropriate. The strategy has both a lower ESG risk profile and significantly better environmental footprint than the reference index.

Ingredients

01

High conviction

Concentrated portfolio to reflect our highest-conviction stocks

02

Trend exposure

Looking to take advantage of long-term, underestimated socioeconomic changes

Let's keep the conversation going

Keep track of fast-moving events in sustainable and quantitative investing, trends and credits with our newsletters.

Stay updated
Robeco

Robeco aims to enable its clients to achieve their financial and sustainability goals by providing superior investment returns and solutions.

Important information
The Robeco Capital Growth Funds have not been registered under the United States Investment Company Act of 1940, as amended, nor or the United States Securities Act of 1933, as amended. None of the shares may be offered or sold, directly or indirectly in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”)). Furthermore, Robeco Institutional Asset Management B.V. (Robeco) does not provide investment advisory services, or hold itself out as providing investment advisory services, in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act).
This website is intended for use only by non-U.S. Persons outside of the United States (within the meaning of Regulation S promulgated under the Securities Act who are professional investors, or professional fiduciaries representing such non-U.S. Person investors. By clicking “I Agree” on our website disclaimer and accessing the information on this website, including any subdomain thereof, you are certifying and agreeing to the following: (i) you have read, understood and agree to this disclaimer, (ii) you have informed yourself of any applicable legal restrictions and represent that by accessing the information contained on this website, you are not in violation of, and will not be causing Robeco or any of its affiliated entities or issuers to violate, any applicable laws and, as a result, you are legally authorized to access such information on behalf of yourself and any underlying investment advisory client, (iii) you understand and acknowledge that certain information presented herein relates to securities that have not been registered under the Securities Act, and may be offered or sold only outside the United States and only to, or for the account or benefit of, non-U.S. Persons (within the meaning of Regulation S under the Securities Act), (iv) you are, or are a discretionary investment adviser representing, a non-U.S. Person (within the meaning of Regulation S under the Securities Act) located outside of the United States and (v) you are, or are a discretionary investment adviser representing, a professional non-retail investor.


Access to this website has been limited so that it shall not constitute directed selling efforts (as defined in Regulation S under the Securities Act) in the United States and so that it shall not be deemed to constitute Robeco holding itself out generally to the public in the U.S. as an investment adviser. Nothing contained herein constitutes an offer to sell securities or solicitation of an offer to purchase any securities in any jurisdiction. We reserve the right to deny access to any visitor, including, but not limited to, those visitors with IP addresses residing in the United States. This website has been carefully prepared by Robeco. The information contained in this publication is based upon sources of information believed to be reliable. Robeco is not answerable for the accuracy or completeness of the facts, opinions, expectations and results referred to therein. Whilst every care has been taken in the preparation of this website, we do not accept any responsibility for damage of any kind resulting from incorrect or incomplete information. This website is subject to change without notice. The value of the investments may fluctuate. Past performance is no guarantee of future results. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. For investment professional use only. Not for use by the general public.