With forces as varied as AI, changes post-Covid, interest rate rises and other forces pushing property markets in different directions across the UK and mainland Europe, the firm argues that it puts the case for active portfolio management front and centre.

Opportunities for actively managed real estate investments, for example in Europe’s offices and logistics, continue to be numerous in a market pulled in different directions by economics, technology and regulatory shifts, Pictet’s alternative investments business says.

The business tends to mostly focus on logistics and types of residential property – “sheds and beds,” Ed Jackson, head of UK Direct Real Estate at Pictet Alternative Advisors (PAA), told this publication. The PAA operation has a total of $61 billion in assets and within real estate, it holds $5 billion under both direct and indirect strategies (as of 30th September 2026). 

Jackson said he and the team like logistics facilities, industrial estates and warehouses. With residential, PAA concentrates on multi-family units in large conurbations. 

An example of varied trends, and how to capture them, arose when Jackson talked about the different pathways for lettings and rental properties in the UK and parts of mainland Europe. 

“The environment for residential [property] in the UK has become very difficult and almost non-viable,” Jackson said, speaking to WealthBriefing in his Mayfair office. 

For example, the UK Renters Rights Act of 2026, which bans no-fault evictions and fixed-term tenancy contracts, is weighing on the market. Higher mortgage rates and increased planning regulatory requirements have also hit the sector, he said. In the annual Autumn Budget, the government also increased taxes on private landlords, adding to difficulties.

In the first of PAA’s two value-add real estate funds (Elevation I), there was a notable focus on UK residential real estate, but that has become far less pronounced in the second fund (Elevation II), Jackson said. In the case of the first fund, capital was deployed into 15 strategies and deals. The funds typically have an eight-year timespan and deploy capital in the first three.

As for other countries, PAA is looking at residential markets in places such as Copenhagen and Madrid. In the latter market, “things are booming,” Jackson continued. Italy is also on the radar, and the PAA team recently bought apartments in Milan.

There appears to be a cautious mood for property in Europe in general. For example, Aberdeen Investments, in its 30 October overview, noted that in September it downgraded global real estate to a “neutral” recommendation against the benchmark of cash returns over a 12 to 18-month horizon.

“While we remain optimistic on the outlook for the asset class, near-term performance is expected to be impacted by recent material increases in bond yields and financing costs. In the last quarter, the German Bund yield increased by roughly 50 basis points. In Europe, indexation to inflation measures will help offset some of this pressure but the net impact is still likely to be negative for valuations. This draws us back to a low income return forecast for the next 12-month period.”

Annual total returns for continental Europe slowed to 5.2 per cent in the year to June 2026, which Aberdeen Investments said brought the region into line with the global average as regional dispersion widened. It noted uneven performance, with national and regional variations. Southern Europe and Ireland continue to outperform, while France has declined from annualised returns at more than 6 per cent one year ago to 4.6 per cent. Germany returned only 2.9 per cent to June 2026. Southern Europe, Ireland and Denmark led performance rankings, it said. 

Real estate remains an important sector for wealth managers, private banks and family offices. In the Capgemini World Wealth Report 2026 (published 4 June), it put real estate at 19 per cent of the average HNW individual’s portfolio as of January this year.  

Asked about returns, Pictet's Jackson said that target returns are typical “value add” levels, meaning in excess of net 15 per cent internal rate of return (IRR) and 1.5 times money multiple to investors.

Finding a pathway
Picking a way through all these different markets, and understanding the forces of interest rate policy, planning and government legislation calls for experience. At PAA, Jackson, holding his current post since 2022, is part of a team that boasts boots on the ground in cities in Sweden, Luxembourg, Germany, Spain and the UK. Jackson worked in investment banking at Bank of America for about eight years in London before joining PAA. He has also worked as a solicitor, boasting qualifications and training in London and Tokyo. Jackson has worked at Pictet since 2019. In addition, he has an MBA from INSEAD.

A mix of funds and direct investment approaches have appeal to well-heeled investors looking for options. Jackson said PAA has another arrow in its quiver: a network that can give it access to off-market deals that clients at other financial institutions might miss out on.

“We have an incredible channel to source deals from our own wealth management division. We get lots of inbound [opportunities and ideas] from our offices around the world,” he said, giving the case of a PAA client who had an office to sell but who did not want to put it on the open market. PAA has been able to work on such deals involving several UHNW families, he continued. 

The fact that Pictet is a family-owned bank and with a long history also helps in this process, he said. 

Talk of an office deal led Jackson to talk about how the offices market in Europe has moved. Offices appear to have bifurcated as an opportunity set, with a cluster of highly desirable, central offices in major cities, and a far more challenging group that fall outside the most sought-after areas.

In the relatively unloved areas, investors can acquire property with a cap rate as high as 10 per cent, Jackson said. (The cap rate is reached by dividing a property’s net operating income by its asset value. The cap rate is an assessment of the yield of a property over one year.)

To take the plunge into such high-yielding office properties in unloved markets requires deep experience, he said.

“For great offices, things are going very well but for everything else, it is a struggle,” Jackson.

The Aberdeen Investments report dovetails with this comment. That UK firm noted that rents have improved and space under construction is 37 per cent below its peak, the lowest level for a decade. Central business districts remain tight, with vacancy at around 3 per cent in Madrid, and under 5 per cent per cent in central Amsterdam. In Paris, CBD vacancy has jumped from cyclical lows to around 6 per cent. There are worries this could rise because of weak demand.