DTZ has performed outsourced real estate fund management services for Imperial Tobacco on an advisory basis since 1995. The mandate became discretionary in 1999.
Overview
In 1995, Imperial Tobacco was looking to appoint new investment advisers to work with them on their existing real estate investments. The client was looking for a company that was expert in real estate, but that was also able to act independently of any brokerage or execution capabilities elsewhere in the firm.
It chose DTZ, based on the performance track record of our business in managing similar accounts, the geographical spread of our network in the UK and above all, the top-level commitment from senior personnel within the company to the account.
What DTZ did
Upon appointment, we undertook a thorough review of the Fund’s requirements before developing the bespoke investment strategy. The strategy combined high level views on the outlook for the UK economy and real estate market, as well as an individual review of each asset to identify future performance potential from the existing portfolio. This led us to a number of conclusions on the best portfolio composition, as well as a number of immediate sales to rotate the portfolio profile.
Over time, the strategy evolved to help the Fund actively manage its high industrial weighting, as well as deal with specific asset risk. As a business, we developed a platform for taking leasing risk, prevalent in industrial units, without diluting the initial income return. Our business model incorporates property managers, assets managers, fund managers and investment strategists and this ensured that communication on the occupier, and factors affecting the occupier’s environment, was very closely focussed.
Results
We still manage the portfolio more than fifteen years after our appointment, and IPD has recognised DTZ for its performance in managing the portfolio. The portfolio may have changed, but importantly, the core management team and investment committee hasn’t. We believe this continuity is a vital part of the strong performance of the Fund and the satisfaction of the client.