Risk Level

Total Return Expectation

Type of property

Leverage

Investment Strategy

Current Market / Opportunity

Core

Low

5-6%

Prime asset, prime location, long lease, single let or limited number of tenants, 100% leased

0-30%

Income producing, long term investment, inflation hedge, minimal capital growth, cash flow driven investment

Assets mostly fully priced in market, strong competition, all equity buyers, lack of supply, few distressed sellers. Low opportunity.

Core Plus

Low - Medium

8-12%

Good asset in primary /secondary location, multi leased, in need of minor refurbishment, some vacancy / lease turnover

40-60%

Leasing and re-leasing /minor capital expenditure works. Medium to long term hold. Refinancing opportunities. Cash flow driven investment.

Good pricing, opportunities available, large equity component required and local asset manager, competition not so strong, some distressed sellers including banks. Strong opportunity

Added Value

Medium

12-15%

Good / medium asset in primary /secondary location, vacant / multi leased on short leases, in need of major refurbishment

50-70%

Repositioning of assets through refurbishment capital expenditure, planning enhancement. Short to medium term hold period. Total return driven investment

Some good pricing subject to capital expenditure requirements and recovery in occupier markets, some secondary distressed assets not priced suitably. Medium opportunity.

Opportunistic

High

15-30%

Development / private equity / distressed assets/ mezzanine finance, mergers and acquisition

50-100%+

Complicated arbitrage investment strategies, often financially driven, operational complexities or speculative development. Short term hold. Total return driven investment.

Very difficult to achieve returns in current market despite the "distress" sellers / buyers price mismatch, significant legacy issues, capital market funding risks and constraints. Low opportunity