Real Estate

Real estate coverage in London investment banking spans six categories you'll see on any job posting: REITs, private property companies, developers, housing associations, property services (agency, facilities), and emerging PropTech. The work sits across office, logistics, retail, residential build-to-rent, student accommodation, healthcare, data centres, self-storage, and housebuilders. The sector is different because it combines tangible, long-lived assets with observable cash flows and hard-asset leverage. RE investors use 60-75% LTV debt. Cycles run 7-12 years, driven by rates and occupancy, not earnings surprises. The language is yield, not earnings multiples. You'll work with NAV (property valuations minus net debt), the Investment Method (Property Value = Passing Rent / Initial Yield), EPRA metrics (NTA, NDV, NRV, Earnings), and four yield concepts: initial, reversionary, equivalent, true equivalent. The gap between passing rent and ERV tells you whether a property is cheap relative to future earning power. UK REITs pay no corporation tax on rental income if they distribute 90% of taxable earnings and meet the 75% property asset test, creating a 40%+ valuation premium over non-listed property companies. London market structure matters: prime West End and City office yields sit at 4.25-4.75%, secondary at 5.75-6.50%, logistics 4.50-5.00%. Watch WAULT, CVA tenant risk in retail, and rent cover in healthcare. Rate sensitivity is brutal: a 50bp rise can drop property values 5-10% in a quarter through cap rate expansion. Interview prep means speaking yield, running residual land value appraisals, and stress-testing covenants.

Sector coverage · from the G2G library

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