Philosophy and Approach

A strong foundation and approach

 

Pillars

 

Real Estate is a business with scale and a significant track record.

The Real Estate business was established in 1988 and since then has completed 608^ transactions valued at over A$27.5 billion*. The team has deep market connectivity through both its real estate equity and debt business. Moreover, not being seen as a competitor by A-REITs and major developers ensures better deal flow and access to off-market transactions from those parties. Combined with our market reputation for deal execution and confidentiality, these characteristics have resulted in the vast majority of our deal flow being pre-market or off-market.

* As at 31 December 2019
^ Transactions include 346 acquisitions at $17.5bn and 262 sales at $9.9bn 

The Real Estate team is a relative value investment manager that take a highly analytical approach to investments. The team believes the market is not perfectly efficient and pricing anomalies can and do occur. The team searches for relative value by thinking laterally and considering investments that may have been misanalysed or overlooked by the market. We do this in all four quadrants of real estate: in both public and private markets, and in both equity and debt.

Assessing risk is a key component of the team’s investment approach and a highly detailed due diligence methodology is applied to transactions. The Real Estate team has invested significantly in systems and, importantly, in building highly skilled teams with a broad range of expertise with quantitative skills capable of identifying relative value.

Process

The Real Estate team manages a diverse portfolio of assets on behalf of our institutional clients. In addition to the traditional sectors of office, retail and industrial, the team has experience managing hotels, social infrastructure assets, agricultural properties and a listed AREIT portfolio.

Asset portfolio*:

We have the requisite licenses and experience to provide both trustee and investment management services that may assist qualifying investors to enjoy the concessional tax rate under the Managed Investment Trust (MIT) regime.

* As at 31 December 2019

As a group, Challenger Limited operates in a strictly regulated environment and is therefore focussed on implementing and maintaining a robust system of corporate governance. The Real Estate team has significant experience in managing real estate assets for third party mandate clients, including large institutional clients and sovereign wealth funds. The team’s preferred individual mandate approach minimises the potential for conflicts that can arise in Fund formats.

A key benefit for the Real Estate team is accessing the significant shared resources across the Challenger Group, all of which can be drawn upon to assist clients.

 

Governance