Key Takeaways
- • Matt Norris, head of real estate at Gravis, expressed optimism for 2026 performance of the TM Gravis UK Listed Property (PAIF) Fund, citing portfolio positioning, mega trend alignment, and continued M&A activity in the UK REIT sector.
- • The fund's REIT portfolio is strategically weighted across four socio-economic mega trends: ageing population (15.3%), digitalisation including logistics and e-commerce (27.9%), generation rent and build-to-rent (15.5%), and urbanisation including West End offices (11.9%), with 24.9% in multi-trend assets.
- • UK REITs delivered strong mid-year 2026 investment performance, outperforming the broader equity market by a significant margin and reversing negative 2025 trends, demonstrating resilience in an elevated and rising interest rate environment.
- • Valuation multiple convergence occurred between REITs and broader equity markets as technology sector momentum decelerated and real estate valuations strengthened, signaling a potential rebalancing in relative asset valuations.
- • M&A activity continues as a material feature in the UK REIT sector, supporting Gravis's constructive outlook for the asset class in 2026.
Summary
Matt Norris, head of real estate at Gravis, a UK-based property, infrastructure, and private credit investment firm, has articulated an optimistic outlook for the TM Gravis UK Listed Property (PAIF) Fund throughout 2026. Norris attributes this positive sentiment to three primary factors: the fund's underlying portfolio assets, confidence in secular mega trends supporting real estate demand, and ongoing M&A activity within the UK REIT sector.
The fund maintains a structured allocation across UK real estate investment trusts aligned with four demographic and economic mega trends expected to drive long-term real estate demand. The ageing population trend, which encompasses investments in care homes and GP surgeries, represents 15.3% of portfolio weight. The digitalisation mega trend—including logistics space and new commerce investments—comprises 27.9% of the fund. The generation rent trend, focused on build-to-rent sector plays such as Grainger, accounts for 15.5% of allocations. The urbanisation trend, featuring West End office leasing, development, and ownership through positions like Derwent London and Great Portland Estates, represents 11.9%. An additional 24.9% of the fund targets REITs with assets encompassing multiple trends simultaneously.
Performance metrics through mid-year 2026 validate Norris's optimism. UK REITs delivered strong investment returns that outperformed the broader equity market by a substantial margin, reversing the negative trajectory recorded in 2025. This performance is particularly notable given the persistent elevated and rising interest rate environment, demonstrating that the REIT asset class can deliver competitive returns under such conditions. Concurrent with strong REIT performance, the technology sector rally decelerated, causing valuation multiple disparities between REITs and broader equity indices to narrow. This convergence suggests potential rebalancing in relative valuations across asset classes as institutional investors reassess positioning.
The fund maintains a structured allocation across UK real estate investment trusts aligned with four demographic and economic mega trends expected to drive long-term real estate demand. The ageing population trend, which encompasses investments in care homes and GP surgeries, represents 15.3% of portfolio weight. The digitalisation mega trend—including logistics space and new commerce investments—comprises 27.9% of the fund. The generation rent trend, focused on build-to-rent sector plays such as Grainger, accounts for 15.5% of allocations. The urbanisation trend, featuring West End office leasing, development, and ownership through positions like Derwent London and Great Portland Estates, represents 11.9%. An additional 24.9% of the fund targets REITs with assets encompassing multiple trends simultaneously.
Performance metrics through mid-year 2026 validate Norris's optimism. UK REITs delivered strong investment returns that outperformed the broader equity market by a substantial margin, reversing the negative trajectory recorded in 2025. This performance is particularly notable given the persistent elevated and rising interest rate environment, demonstrating that the REIT asset class can deliver competitive returns under such conditions. Concurrent with strong REIT performance, the technology sector rally decelerated, causing valuation multiple disparities between REITs and broader equity indices to narrow. This convergence suggests potential rebalancing in relative valuations across asset classes as institutional investors reassess positioning.
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