‘Generation income’ – looking beyond traditional real estate

Whitepaper | 16 February 2018 | Invesco Real Estate


Investors need income, but how can it be generated in a low-return environment? We present three alternative real estate asset classes that may cater to investors’ income needs: European hotels, US real estate and global income securities.

Whether it’s Generation X, Y, Z or the iGeneration, one thing remaining steadfast throughout generations is the need to create income to achieve long-term financial goals.

Real estate has long been regarded as a complementary investment within a multi asset portfolio, given its low correlation to bonds and equities in the past. However, a deeper look at the asset class reveals that outside of more traditional core investments lies a selection of strategies and solutions providing long-term income streams, lower volatility potential and effective liability matching. 

We explore three alternative real estate strategies:

1. European hotels are becoming ever more interesting – not least due to rising tourism

2. US real estate can be compelling if one invests outside the major agglomerations.

3. Global income securities (aka listed real estate) provide a full range of instruments with diverse risk and return characteristics


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Investment risks

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Property and land can be difficult to sell, so investors may not be able to sell such investments when they want to.  The value of property is generally a matter of an independent valuer’s opinion and may not be realised. 

Important information

The views and opinions expressed herein are those of Invesco Real Estate professionals based on current market conditions.  They are not necessarily those of other Invesco professionals and are subject to change without notice. As with all investments there are associated risks. Please obtain and review all relevant materials carefully before investing.