Real estate is an ideal investment for those who take a long-term view, such as European charities, endowments, foundations and family offices. Real estate’s performance over the long term, both on an absolute and a relative basis, has been very good. In the United Kingdom, where we focus, over the 15- and 20-year periods to 2013 real estate has performed better than equities and bonds, generating an annual total return of 7.5 percent and 8.3 percent, respectively.

Interestingly, it is the income component of property, rather than capital value movements, that dominates total returns — of the annual total return of 6.3 percent over the last 10 years, 5.8 percent came from income. As well as producing strong returns, property in general provides diversification to the other asset classes. Over the long term, it is less volatile than equities and government bonds and there is a low correlation between it and equities.

On the assumption, therefore, that charities, end