Investment approach
Our investment process
Our investment process combines top-down thematic analysis on trends and value drivers with bottom-up local market dynamics to create a robust investment strategy. Our top-down thematics identify the locations, sectors and assets set to under or out-performance in the short, medium and long-term and determine our preferred approach towards buying, selling and managing our portfolio of investments. Overlaying this with our teams embedded in their local markets allows us to uncover suitable assets at the right price, adapt our existing portfolio to align to occupier demand and capture rental growth, and optionally time our exit from the market.
Our investment themes
Cromwell considers the following four trends to be dominant in shaping our economies and societies.
Rapid technological change is underpinning substantial change in the structure of our economics and societies. It is fundamentally altering the type of occupiers who are expanding and their real estate expectations. Ensuring that assets provide what modern occupiers want from a technological perspective and can continue to evolve in line with ongoing change is critical to performance.
The climate crisis is one of the most significant challenges of our time and an existential threat to humanity. According to the UN, real estate contributes 39% to global emissions, meaning it has a central role mitigating its impact. Implications of sustainable, environmental, social and governance practices will be the overriding determinants of future real estate value and must underpin all decisions on asset acquisition, disposal and operation.
Western populations are ageing, creating demand for new types of real estate. At the same time, an entirely new generation of young people, gen-Z, are coming of age and have entirely different expectations from real estate from those that came before. Demographic changes are upending the labour market, the type of office, living, retail and logistics space needed in the future, and how real estate will operate.
The world economy is retreating from globalisation and entering a new paradigm characterised by multi-polar blocks. A reordering of international politics, trade and migration will upend the old order and impact everything from supply chains to energy prices and labour flows. The outcome will be winning and losing locations, sectors and assets, potentially altering real estate performance.