Home / Operational Real Estate: unlocking value in real estate

Operational Real Estate: unlocking value in real estate

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.

OpRE can offers several advantages, including increased cashflows and the potential to generate positive Environmental, Social, and Governance (ESG) outcomes. However navigating the European OpRe landscape can be challenging due to the absence of clear guidelines and established market practices.  

This page serves as central hub for all things OpRE. Here you will find all our resources, including:

  • A definition: to gain a clear understanding of what Operational Real Estate entails 
  • Insights and guidance: to increase your understanding and navigate the complex OpRE landscape
  • Training and events: to stay informed on the latest developments with expert industry insights 

Show more

Insights

Explaining operational real estate 2023

Launched in October 2023, this paper will familiarise market participants with OpRE, to better incorporate these strategies into their institutional vehicle structures and investment governance. Read this paper to learn about OpRE merits, working models, the risk/return profile and tax and regulatory considerations. Key highlights include:

  • OpRE investments can provide higher cashflow distributions and business value, but entail a unique risk return profile, which may require greater time commitment and some level of critical mass to reach efficiency; 

  • OpRE results in the investor having control over different elements of the asset’s utilisation, which can potentially be used to generate non-financial benefits, such as positive ESG outcomes; 

  • To effectively navigate the complexities of OpRe, there is a need for market transparency and best practice guidance.

Download

Operational hotel

March 19, 2024 – London  

Operational Real Estate Course 

The INREV Academy are pleased to present a brand new course on Operational Real Estate. Join this course to gain a deeper understanding of the merits of OpRE and learn how to evaluate risk and return in OpRE investments.

What exactly is OpRE?

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.’

Operational Real Estate Committee
 

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.  

What the industry experts say

Bessel

Mike Bessell | Invesco Real Estate Europe

‘It is clear that almost all segments of the real estate market are becoming increasingly operational; as investors we need to be ahead of this evolution.’ 

Pozzatto

Simone Pozzato | Hines

‘Real estate and services are increasingly offered together and could provide an attractive income return. It is crucial for investors to understand how to drive performance and navigate risks.’

Bessel

Mike Bessell | Invesco Real Estate Europe

‘It is clear that almost all segments of the real estate market are becoming increasingly operational; as investors we need to be ahead of this evolution.’ 

Bessel

Mike Bessell | Invesco Real Estate Europe

‘It is clear that almost all segments of the real estate market are becoming increasingly operational; as investors we need to be ahead of this evolution.’ 

 
 

 

Do you have questions?

Please don't hesitate to contact us.