Operational Real Estate (OpRE) is a rapidly evolving component of the real estate market, as investors seek innovative ways to maximise value, mitigate risk and hedge against inflation. OpRE has emerged as a strategic investment option. This is especially relevant in today's dynamic landscape, where shifting consumer demands and expectations are reshaping the real estate industry.
The first INREV OpRE paper, from October 2020, shows an increasing appetite for investment into operational real estate. This is driven by the change in investment approach from providing space as a product to embracing space as a service; and the long-term structural trends, stemming from accelerated economic and social megatrends.
To bring more clarity in this field and to promote market transparency, the new Operational Real Estate Committee has developed a definition of Operational Real Estate as follows:
‘An investment in a real estate asset structured so as to create a strong correlation between returns to the asset owner and the underlying operational performance of the operator or occupant. Operational real estate investments typically entail a different risk-return profile (operational, financial, or both) when compared to non-operational investments. Such investments may be accessed via a variety of structures, including, but not limited to, operational services agreements, joint venture arrangements or taking equity stakes in an operating business.’
The Operational Real Estate committee was established in January 2023, to reflect the importance and relevance of OpRE in the real estate investment industry. Learn more about the committee’s goals, its members and what projects are in the pipeline.
Last updated on 16 Oct 2023
Last updated on 17 Sep 2020
During the Insights into Operational Real Estate Seminar, we were joined by Mikkel Bülow-Lehsby, NREP, Jay Kwan, QuadReal, Boudewijn Ruitenburg, EDGE and Brenna O’Roarty, RHL Strategic Solutions.
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