Q&A with Charles Allen: Why select real estate offers resilience

CRE Media Europe sits down with Fiera Real Estate’s Head of European Real Estate on why select real estate assets offer resilience.

Are you optimistic for what 2026 holds?
I am, but it’s guarded optimism. Risk is elevated and coming from many directions, but we also believe that investors could miss general investment opportunities if they are underexposed to select real estate markets. 2025-2026 has the potential to be a fantastic vintage and history has told us time and again that real estate is often one of the strongest performing asset classes in a recovery period.

Geopolitics and macro uncertainty are all consuming, but real estate offers resilience, diversification and growth. There’s a lot of appetite for strategies providing predictable, defensive income on the one hand, and alpha potential on the other – especially if that income is inflation-linked and underpinned by structural drivers.

Our investment strategy is reflective of current investor preferences, and where we expect them to remain throughout the cycle: logistics, living and debt. These sectors are characterised by long-term fundamentals rather than their exposure to short-term, cyclical dynamics and represent a strong alternative to volatile equity and bond markets.

Logistics and living continue to demonstrate resilience, whilst access to equity like returns through a senior secured position in the capital stack helps to explain the exponential growth in the debt market.

Which countries or markets offer the best opportunities, and why?
We like single-family housing (SFH) and logistics in the UK. Both benefit from strong structural demand and constrained supply, especially when it comes to best-in-class assets that are future-proof and of an institutional-grade.

Changing demographics, affordability pressures and a growing preference for professionally managed rental housing support long-term demand for SFH. It’s also an extremely nascent sector with limited institutional penetration, meaning those who establish an early-mover advantage can more easily build scale.

On the logistics side, e-commerce growth, supply chain reconfiguration and an undersupply of well located, modem space is driving investor and occupier demand. Across SFH and logistics, we have strong conviction in development, where we can take advantage of rebased land values to create high-quality, future-proof assets from a more favourable entry point.

Iberia is another favoured market for us, where we recently opened an office in Madrid to give us boots-on-the-ground.

Having that local expertise in select markets is critical to uncovering attractive opportunities and capitalising on surging demand from institutional capital.

We’ve been active in the Iberian debt market for almost three years. Alternative lenders occupy a lower share of the market than that of other established economies, despite there being a large funding gap, while the retrenchment of traditional banks is still defining as they adapt to regulatory and balance sheet pressures. This is a clear and attractive opportunity for alternative lenders that are well capitalised, experienced and agile, responding to demand for flexible, bespoke solutions.

We’re also looking at ways to enter the equity market, where we can marry our proven expertise in residential development with the networks and local intelligence we’ve developed through the debt strategy.

What is your strategy in terms of sectors and what are the main drivers?
Our approach is deliberately focused on areas of the market where we see both structural support and the ability to generate attractive risk-adjusted returns through active involvement. We’re targeting essential real estate with enduring value; high-quality assets with income visibility, downside protection and growth potential.

We also have a unique operating partner model, where we are part-owners of specialist development companies across a range of sectors. We see this as a competitive advantage as it allows us to go deep into local markets and unlock opportunities for our investors that are typically difficult to access, helping to drive deal flow and build scale at an accelerated pace. Those companies bring deals to the table and support in the development of assets, with Fiera providing the institutional investment management wrapper.

At a sector level, our debt strategy targets mid-market, senior-secured whole and transitional loans in the UK and Europe and across a range of sectors. We’ve deployed over £400m to date, with its success being driven by a disciplined focus on our investment thesis; prioritising downside protection, selective underwriting and close alignment with experienced sponsors, where we can deliver and stabilise high-quality real estate in capital-constrained markets.

In UK residential, our single-family housing strategy is delivered in partnership with Packaged Living, a market leader with one of the largest development pipelines in the sector. Together, we are focused on creating best-in-class homes with strong sustainability and social impact credentials, targeting locations where supply-demand dynamics are most supportive of long-term income growth.

Logistics is a UK development strategy, where we are delivering Grade A1 small-to-mid box warehouses – typically between 200,000 and 250,000 sq ft. We have an outstanding track record in the sector, having developed 11.8 million sq ft since 2018, averaging a 40% project IRR. Our current focus is our newly launched JV with one of the UK’s largest institutions, Universities Superannuation Scheme.

We also have a tactical strategy in UK residential land, where we leverage our planning expertise and track record. Fiera and its operating partner network have achieved planning consent on over 11,000 units. Through this strategy we secure consent on high-quality sites, capturing value at a point in the cycle where land prices have adjusted and competition is muted. This allows us to create optionality for future development.

What most concerns you about the year ahead?
It’s not so much about the underlying performance of real estate itself, but more about the unpredictability at the macro level.

The fundraising environment continues to be challenging, with plenty of dry powder sitting in the side-lines until there’s better pricing visibility and more stability. Deployment is still going to be characterised by caution.

The UK political backdrop is in a constant state of flux, being approached with greater scrutiny from overseas capital. That being said, it’s still deeply attractive from a fundamentals perspective and the overarching legal and regulatory framework.

However, these dynamics also create opportunity. Periods of uncertainty lend to reward disciplined strategies, strong local platforms and managers able to source off-market opportunities and deploy capital selectively. The key risk for investors is not volatility itself, but failing to engage at a point in the cycle when pricing, fundamentals and long-term demand drivers are beginning to realign.

To what extent are you making use of AI and how do you expect this to evolve?
The real estate industry is still coming to terms with how to integrate and apply Al in a way that unlocks its full potential. In broad terms, we’re finding ways to embed it into how we analyse, underwrite and manage assets. We recognise that it can enhance data-decision making, whether that be asset performance monitoring, scenario modelling or risk assessments, for example. It’s ultimately about supporting better-informed investment decisions to improve performance.

What do you think the implications of AI are for the industry as a whole?
It’s difficult to tell at this stage, but what it will almost certainly do is put to bed this idea that real estate often lags when it comes to adopting technological progress.

Over time, it will increasingly differentiate managers who can meaningfully integrate data and technology into their investment and operating models from those who cannot. There are clear benefits in risk analytics, capital allocation decisions, as well as ESG and climate risk modelling at the asset level. Ultimately, the strongest platforms, will combine technological innovation with human decisions informed by deep experience.

That being said, AI will always be complementary. It’s not a substitute for local market knowledge, relationships or execution capability.

This article was originally published in CRE Media Europe.