Bricks & More: Unlocking Real Estate Value

Rethinking Risk: The Value-Add Strategy Rooted in Discipline with Charles Tarriere

• Adrian Strittmatter • Season 1 • Episode 8

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In this episode of Bricks & More, Adrian is joined by Charles Tarriere — investor, strategist, and co-founder of Evonite — to explore how value is created in today’s real estate market when risk is high, data is scarce, and cycles move fast.

Charles shares how Evonite’s independent, risk-based investment model challenges the status quo, and why understanding tenants, embracing simplicity, and sticking to core fundamentals are more important than ever.

Whether you’re navigating stranded assets, rethinking retail, or eyeing overlooked offices — this episode will sharpen your view of what makes a resilient portfolio.

Key talking points:

📉 Why over-consolidation in fund management is narrowing investor choice — and how Evonite offers an alternative

🏢 Why the most underrated asset class right now might just be… offices

🧠 How real tenant insight (not just data) drives smarter investments

🧱 Why “simple” buildings outperform in a fast-changing market

🎯 Why being disciplined about exits is key to long-term returns

If you believe value-add should mean more than a buzzword — this episode is essential listening.


Charles’ LinkedIn: http://linkedin.com/in/charles-nicolas-tarriere-6243412/ 

Evonite: https://evonite.eu/ 

Adrian’s LinkedIn: https://www.linkedin.com/in/adrianstrittmatter 

Saentys: https://saentys.com/ 


Adrian Strittmatter:

In today's market, reacting to trends isn't enough. The most successful real estate players are the ones creating value strategically, thematically, and with conviction. In this episode of Bricks More, we are digging into the big questions. How do you build a value add investment strategy that thrives across the cycles? And what does a risk-based, research driven approach to real estate actually look like in practice? Today's guest is Charles Tarriere, co-founder of Evonite, an independent partner led firm, taking a bold risk-based approach to value add real estate investment across Europe. With deep expertise in fundraising, acquisitions, and asset management. Charles brings a rare combination of financial insight and strategic execution to the table. His career spans leadership roles in portfolio management and development. At Evonite, he's focused on turning data, market themes, and occupier insight into real measurable value. Hi Charles, welcome to Bricks More.

Charles Tarriere:

Hi. Thanks for having me today.

Adrian Strittmatter:

It's gonna be a bit, is strange'cause we normally speak in french together. So we're gonna, we're gonna do this in English then. Indeed. so you've had a, a really long career spanning a lot of leadership roles, throughout real estate and different functions. what would you say your core guiding principles are?

Charles Tarriere:

thinking about this question, I think I'd say that having your client at heart, starting with what's the best interest for your client before your own. and when you do good for your clients they'll do good by you and they'll stay with you. and I think, when I think, at the Difficult Times I had through my careers, let's say, going through the gfc for example. and always use some time this anecdote where I found myself back in 2008, late in the year, so we were in full GFC mode having a meeting in Texas and that investor came in, actually didn't come in first sent an analyst because, we thought it couldn't be bothered. And suddenly we have that's high ranking investor coming in. Half sweaty saying, sorry guys. I only have 10 minutes for you because I'm fighting fires everywhere. No wonder in the middle of GFC. I wanted just to thank you for being here.

Adrian Strittmatter:

Yeah.

Charles Tarriere:

been invited. at the moment, there are some managers who I don't return my calls been three months now

Adrian Strittmatter:

Wow.

Charles Tarriere:

this is the type of stuff that mark a career and always stuck with me to, to have your investor at heart, what is, the best. interest.

Adrian Strittmatter:

I think we found that, obviously talking with quite a few different people on the podcast, that service and service to clients is often forgotten as a soft skill, which actually and really brings about returns in terms of the market And there's obviously a lot of transformation in the market and specifically in your peers. what is it that you felt that was. Potentially missing or that Evonite could bring that would be New bold and game changing in the market?

Charles Tarriere:

there's been a clear change, in the last six to seven years, where there's been enormous amount of consolidation in the investment

Adrian Strittmatter:

That's true.

Charles Tarriere:

big firms have acquired smaller or medium sized managers and that choice in a way for managers for the investors who can I invest my money with, has been enormously reduced. and we felt this cannot be good. and as a consequence of that what we've seen also is that the concentration of fundraising into not even handful in the. Couple or Three managers has become enormous. I think the stat is that today I think the top two manager concentrate 40% of the Fundraising. So I'm not saying this is bad many investors want to reduce the amount of managers they want to investors with large amount of money but also having less choice. It's not necessarily good for general new market and we felt we could bring something New something fresh remaining dependent the this independence is very important, for us.

Adrian Strittmatter:

I think Independence is a key thing. And, and again, we're seeing that across, across asset management firms. We're seeing that across brokerage firms as well, where in, in a transforming market, those firms with that Independence and that client focus can really thrive, in a changing environment. with regards to sort of the approach to investing on behalf of your clients, but also finding those nuggets of value. how would you say that's different?

Charles Tarriere:

You said in in the intro that I heard you actually recorded a little bit earlier, you talked about the Word risk'. And I think this is very important for us. I think the market change and as a consequence. Return will

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

Mm-hmm. But our job I see as to evaluate the risk and to take investment decision depending on the risk and as the market heats up, usually a lot of invested tend to take a bit more and more risk for the same amount of returns. Mm-hmm. and we know where it ends always ends in tears. So really our approach, the first. Look at what is the inherant rent risk of that investment, whatever investment that is, and then just see if it actually makes sense in current environment.

Adrian Strittmatter:

So you were talking about obviously the the market changing. There's been a lot of evolution, especially across asset classes. Some have thrived, some have been challenged in in the way that people use them in the way that we interact them or invest with them. What would you say are the strongest value drivers across Europe and real estate at the moment?

Charles Tarriere:

In terms of themes, we live In an environment with it's, there's a lot of instability geopolitically, economically, and there's a consequence. I think having a bit of stability in your investment is important. What brings stability is actually the income. We think that assets that provide an income, that pricing power against, for example, inflation where you can as an investor or where your tenant can transmit the inflation onto the end customer is very powerful because then you have a bit more security about that income. Retail is, for example, a good asset class for that where systematically the tenant in that industry transmits the inflation back to the end customer.

Adrian Strittmatter:

Exactly. and what would you say in terms of that notion of that occupier insights that you utilize in your investment strategies. How can that sort, of give you that advantage when you are looking at sort of ways of Investing or choices?

Charles Tarriere:

The answer is simple. You have to think like your occupier, first of all, the occupier or the tenant is a partner.

Adrian Strittmatter:

Mm

Charles Tarriere:

It's funny, in our company, we we, we have the theory of the three P's or the partners, the performance and the people And the first p, which is the partner, includes not just the people with whom we work or for which we work but also the tenants because we have to provide something for them. So understanding how they click, understanding what they need from real estate, is the best way. So there's different ways, I mean, across my career, I've been dealing with multiple asset class or again. Using the example of, of retail, you need to understand how it thinks or how they look at the market. purchasing power, catchment area so on and so forth. Then you go into talk to a law firm that they'll think completely differently. Same for a data center operator. Mm-hmm. and that is the insight you need to actually go into. And the key thing is, okay, if I was that tenant taking that space in that building what would be important for me What would make me click I mean. is it important for me, for example, attracting a number of Young staff who want to work in a cool environment or am, I looking here to, appeal to people that look for deals because I'm a discount retailer, so I can't actually be seen like having a a fit out that looks very, luxurious. This is an example.

Adrian Strittmatter:

Do you think do you think that's changed?'cause I know that the work that we do on on, on, obviously, and we've worked together on the on the branding and the market side marketing, side. Sorry. People were very. good at. Developers and investors are very good about knowing the product knowing the location, but there was always this kind of big unknown of about who are you actually talking to? Who's your consumer? Do you think that's changed? Is that kind of third piece of the equation that you were mentioning has become more and more important across real estate asset class? Oh, yes

Charles Tarriere:

i

Adrian Strittmatter:

Mm

Charles Tarriere:

i think this is where, I'm mean in the last 20 years of my career, I've seen that enormously evolve. this enormous effort has been made by, the landlords as a whole to actually understand what what kind of product and seen really real Estate. as more than just. Floor plates. Mm-hmm. seeing real Estate as this is a, is a tool that companies use for a certain goal. Yeah.

Adrian Strittmatter:

No, exactly.

Charles Tarriere:

and I think that they're really making a lot of effort to get that insight. much more research is being

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

Mm-hmm. but we also unfortunately in our industry, are hit by the fact that it's difficult sometime to get this data. Mm-hmm. to really get that insight.

Adrian Strittmatter:

would you say it's difficult?

Charles Tarriere:

Because very opaque. first of all, between the landlords. I mean, We here today in london which is the most open

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

you can get as much information as you can. I mean, try to actually do business in Europe

Adrian Strittmatter:

Yeah, that's true.

Charles Tarriere:

you can't get any idea about the pricing, about stuff like this. And then when it comes to working with tenants, I'll give you an

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

Two years back, I, I, I seem to be talking only about retail today in terms of Anecdotes

Adrian Strittmatter:

Oh, that's good.

Charles Tarriere:

we were trying to implement some green

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

and green, one of the key things on green lease is the data so working with your tenants, so the tenant provide the consumption that used and all that

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

and we had a number of tenants who would refuse. Why would they do that not because they were in green but because they knew that if they gave the data in terms of consumption,

Adrian Strittmatter:

Mm.

Charles Tarriere:

would give an insight to the taxmen to calculate how much of the internet retailers driven out of the store so they could actually charge a high tax onto the store.

Adrian Strittmatter:

Okay.

Charles Tarriere:

o obviously it, it, it's. would think about that Mm-hmm. so one has to find a way to actually still accommodate the reality of things nobody likes to pay too much tax. Mm-hmm. But with the imperative, we need to make sure that our buildings become greener and we need to have collaboration of everyone starting with the data.

Adrian Strittmatter:

I Think it's interesting, isn't it as well? Because if we look at certain asset classes, you mentioned retail, which was, Has gone through a. really well, seems to be on the up apparently to, according to some figures, but obviously very much challenged by internet purchases. Then the offices challenged very much by working from home So really these societal changes in the way that we occupy space and the way that we view space have obviously direct links to, where someone would want, to invest develop a New asset class. in terms of the way that you talk to your investors, what do you think in the current market, where do you think the value add strategies fall short today?

Charles Tarriere:

they fall short, first of all, because value add is not a constant thing, I would

Adrian Strittmatter:

Hmm. Mm-hmm.

Charles Tarriere:

going back to what I was saying earlier about, the risk assessing the risk mm-hmm. can be today. buying for value. really buying something cheap where

Adrian Strittmatter:

Mm.

Charles Tarriere:

you're actually not taking that much risk, so you're taking almost a co plus risk, value. It could be also, I've got here market with actually no supply. I'm taking a development risk which some, would may see that more as opportunities risk but I think, what is important to me is, is staying consistent in terms of your

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

I'd rather have. A consistent element of returns in a portfolio of assets rather than actually top performers and actually bottom performers.'cause on the long term, pays off

Adrian Strittmatter:

Mm. And you'll have to clean up the, the sort of the, the shopping basket at some point or another. in terms of sort of going into some practical case studies, do you have a sort of recent deal that you've done with Evonite that really illustrates your approach to value creation?

Charles Tarriere:

Maybe not very recent, but i think a few years back

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

we were interesting in Berlin.

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

Now, I'm talking probably quite a few years back, but I think you, you'll, you'll understand where I'm getting at. the way we approached the market it was a market which just came out of of

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

uh, the reunification. there was no data, at least of the shelf. And what we decided to do was to actually do primary data on the back of the evolution that we saw in the london market in terms of the office the, digital roundabouts, and how the rent tripled in the matter of two to three years. and we could see actually a trend happening in Berlin where a lot of tech companies were arriving. so we decided to do our primary research. so we went to interview some of the tech players already existing in Berlin at the time, asking her, what do you need from your real estate? again putting yourself on the shoes of your tenant. what do you need from the real estate? Um, type of real estate do you want. And As such we are actually mapped the type of real estate, that they wanted. And it was without too much surprise. cool

Adrian Strittmatter:

Buildings, warehousing Warehouse

Charles Tarriere:

old factories didn't need to be air conditioned. where you could basically come with your bicycle on the second floor with a goods lift lot of space a completely open space and that then triggered, a research where we. Literally cataloged the number of streets in Berlin in certain areas of Berlin

Adrian Strittmatter:

Mm.

Charles Tarriere:

okay, we can see those building of certain character in those streets. and then we proactively started to actually contact the landlords. the beauty of Notal system on the continent is that you have that information

Adrian Strittmatter:

Yeah, that's.

Charles Tarriere:

you actually create off market transactions But it all started with again the, this primary research because it didn't exist. this is something which is. Obviously harder to do today, but to me it it, it's really um, how we think about it. Really. It takes us a long time to get familiar with a market with certain asset class. Mm-hmm. But once we are convinced, it means we've collected the data and we're pretty sure about what we wanna buy, how we wanna buy it, and we've created also an edge, which in this case was having that list of of potential of market transaction we could do.

Adrian Strittmatter:

Yeah,'cause who the players were and what kind of buildings they'd be looking for. Going really Back to that buildings that they'd be looking for they you'd obviously identified as sort of niche or sort of an opportunity. Do you see with regards to commercial real estate occupies requirements have changed with regards to the way that they occupy or lease space

Charles Tarriere:

Obviously COVID has

Adrian Strittmatter:

Mm

Charles Tarriere:

change in this. I think there's still, companies are still taking time to really assess what it is. I still, I am still a bit involved of offices. mm-hmm. flexibility is important. albeit what does this mean? It's still the big question mark. And we see that unlike retail, which we talked about earlier, which has been fundamental change in terms of the way shop in office, COVID has been a small like very strong very hard change But I don't think fundamentally we, we'll look in five years from now, in 10 years from now, that that will be an asset class that will disappear.

Adrian Strittmatter:

Hmm. Yeah, definitely.

Charles Tarriere:

this be probably. Of it, and the use of it will change but it has been going through a number of revolution in. the last 150

Adrian Strittmatter:

Yeah, definitely. So with regards to different markets within Europe, the period you are referring to in Berlin there was this kind of absolutely a period where things were really really underpriced. Do you see other markets where there's that. real obvious opportunity, or was it something you have to really dig around a bit more to seize and understand and, and capture

Charles Tarriere:

I think there, there, there's real opportunity without again, too taking too much risk. I think at the moment it's a period where, one shouldn't take too much

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

Mm-hmm. we hear a lot about beds and

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

I, I struggle to really see the risk adjusted returns here. I have endless conversations, some of my peers in data center industry

Adrian Strittmatter:

Mm

Charles Tarriere:

just, I keep on asking them, but you're taking a development risk here. that's not just taking an existing building which

Adrian Strittmatter:

mm.

Charles Tarriere:

tinker around. It's. It encapsulates quite much more risk. So how do you actually value this? but I think that no, there's definitely opportunities. we've seen a repricing in the last two years.

Adrian Strittmatter:

Sufficient repricing. Would you say sufficient repricing, would you say? Yeah, I think

Charles Tarriere:

that process is still taking,

Adrian Strittmatter:

ongoing. Yeah.

Charles Tarriere:

ongoing in some markets, as we know as European. we like to take our time rather

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

rip the bandage And

Adrian Strittmatter:

And stuff fresh bumping along. Yeah.

Charles Tarriere:

But i think Southern Europe is very interesting I think German steel has some further, pain to go through there will be definitely an opportunity. There's also an opportunity in terms of the type of deal size of deal. For example, we strongly believe in the traditional sectors. Office retail logistics. Mm-hmm. especially the small size, logistics. and the smaller deal size. I think, again, as I was saying earlier, the, the, the Consolidation industry where there's been bigger and bigger

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

need larger transaction where there's still a lot of value in the small lot size. Mm-hmm. where if you don't need to do 150 million Euro deal every day but you're happy with a 10 and 50 million you can. make quite a lot of money.

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

that there's a, there's a gap in the market for that.

Adrian Strittmatter:

And, um are there any, as you were talking about before, any asset classes that you are dubious about at the moment.

Charles Tarriere:

I

Adrian Strittmatter:

I.

Charles Tarriere:

Everything I've said to date, now, it's actually pretty clear it's retail. actually love retail. one of the reason is that I started retail was

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

where I started basically my career and 2007 I, I. Basically had to say goodbye to that asset cloud. I really like,

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

necessity, retail.

Adrian Strittmatter:

Yeah.

Charles Tarriere:

and after going through 15 years of what's the Word of of being, not. Down seen as a taboo sector. I see really, the, the benefit of retail and the importance of, of retail in our different asset classes I, I'm happy with that. In a way it's funny because when you speak to certain players today, without disrespect, you find yourself in front of people that have never actually done retail

Adrian Strittmatter:

Mm.

Charles Tarriere:

for it's been so taboo for 15 years, then they need to redate. Themselves about it, about the importance and the, the, the, the,

Adrian Strittmatter:

Mm.

Charles Tarriere:

the appeal of retail cash flow for example. what is actually supports the, the, the cash flow of retail behind. we talked earlier about inflation, how in a way a supermarket will never be really affected by inflation. Mm-hmm. affordability, and like for example, in residential. Is less of a problem because we've gone through 10, 15 years of rent being knocked down. Mm-hmm. so all this actually is in favor and also an asset client is probably the, the most important, very short supply. Nobody has really built retail in the last 15 years. As a whole, if you compare to other asset classes

Adrian Strittmatter:

yeah. you're right. Yeah.

Charles Tarriere:

industrial, such as offices, because it's been a, an, especially in Europe, there's been a restriction by the planners, for example, to protect city center shops and, and so on and so forth. So all this together making asset class, which seems very interesting today

Adrian Strittmatter:

Nice. You need this.

Charles Tarriere:

and the beauty of having started There we have it.

Adrian Strittmatter:

Yeah. a dying breed. Yeah.

Charles Tarriere:

Almost.

Adrian Strittmatter:

Almost. there's a question that, we were discussing before that might be a tricky one might not be a tricky one around the sort of. What I would call the kind of physical or operational changes. which ones do you think that that really make the biggest difference to not only the asset's value, but potentially also its resilience. As we said, there's a lot of movement, there's a lot of requirement for resilience or adaptability, but what would you say those physical and operational changes might be? Obviously dependent on the asset class.

Charles Tarriere:

If you had asked me about that case study we talked about, would've said the building needs to look cool.

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

the key thing for the tenant was to actually attract that young staff. I, I think a lot needs to be, said about simplicity of real estate. I think. Sometime the, the complexity that we tend to put in it or that building needs to have that type of air conditioning, that type of facilities. And, and you find yourself with actually assets which are so complex that they're difficult to run. They're also very expensive to run. Mm-hmm.

Adrian Strittmatter:

mm.

Charles Tarriere:

And As a consequence also, they're, bound to age a bit more quickly.

Adrian Strittmatter:

Mm.

Charles Tarriere:

not that I want to be nasty against data centers but that's also a technology, for example, that evolves very quickly.

Adrian Strittmatter:

Yeah, it does.

Charles Tarriere:

Who says that a data center today will still be acceptable in 20 years time. If you take I mentioned earlier, simple little industrial estates, many of them, they still look the same as they were 30 years ago. they can be improved, especially from an ESG point of view But ultimately it's four wheels and a tin.

Adrian Strittmatter:

Yeah. And they're still here.

Charles Tarriere:

And they're still here? because they're basically, they're very flexible The tenant can do whatever they want with it.

Adrian Strittmatter:

That's super interesting. in terms of your approach at Evonite with regards to ESG sustainable buildings and the kind of notion that there are. a big stock within Europe that's considered to be Brown, buildings or stranded assets. How do you see the opportunity in those, or how do you sort of, you know, you were saying about transforming the asset into something New giving it a New lease of life, within the the New. sort of required parameters.

Charles Tarriere:

as Evonite we, we are focused on value add investments, so the beauty. T of value add is we tend to take something which is needs

Adrian Strittmatter:

to be improved Improved? Yeah.

Charles Tarriere:

and our mandate is to actually bring to, a healthier, more sustainable

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

so as a consequence, there's some easy wins we can do. and I must admit sometime I feel my job is a bit easier than being a, the manager of big core fund, where ultimately how do you improve already of something which has already the top spec in terms

Adrian Strittmatter:

The top spec. Yeah.

Charles Tarriere:

But We talked earlier about data and I think data is one of the key thing. Quite often what we do is also buying from non-institutional landlords where data is the the least of their concerns. So our first duty, in my view, is to collect that data and make sure that it is passed on to the next generation of landlords. Mm-hmm. and whilst we own it, obviously it's improving on on, but again. the, the simple action can be done, improving the roof improving the Windows improving the energy consumptions, all that. But if you don't have that data it just, it,

Adrian Strittmatter:

It's impossible to do. Yeah.

Charles Tarriere:

you don't have a way to measure your success or not.

Adrian Strittmatter:

And do you, do you feel now with regards to your clients and the people who will be, giving you funds to invest, have you, have you seen their criteria change We talked about risk a little bit. Is there anything else where you've seen a change in attitude towards real Estate or what they're expecting real Estate to deliver to them or for them?

Charles Tarriere:

i think many investors, we, we've gone through a period where real Estate has been probably overutilized as a financial tool in a way. So we've seen a period where leverage, buying leverage core, has been very profitable, but at the same time it had to stop and it's

Adrian Strittmatter:

Okay.

Charles Tarriere:

stopped. And as a consequence of that there was a lot of New players who didn't fully understand that real estate is ultimately an I liquid asset.

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

and these, I'm, I'm still questioning whether they're gonna stay for long or they're gonna have to readjust a bit their view on real estate. but there's another group of investors who understand the beauty of real estate, especially when it comes to income. income is One of the USP that real estate has to offer, compared to other asset class, the stability of

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

and if you find, a manager who navigates for you those cycles delivered deliver an inflation hedge at the moment is actually in my view,

Adrian Strittmatter:

No, that's pretty good, isn't it? I think also you've got the revenue, you're absolutely right. I think what I've always loved about real estate as well, it's its ability to adapt and to transform. a car is a car a shoe's, a shoe. I. But a, but a real estate asset. And we've seen it, with really successful sort of retrofits or, things that were previously in another life. I don't know, an office that became, or old factories that became prime residential in city centers. I Think that's also, that ability to transform, to adapt to societal needs, I think is a, is a really strong. strong. way of doing it. Um, how would you say obviously we, we are talking about resilience, through ESG, but there's also sort of financial resilience. We were talking about revenue as well how do you. Ensure or try to ensure the long-term performance while still, delivering short and medium term returns. Because there's always that notion of, you. know, those three, three levels of timing how have you got a sort of secret formula to be able to do that? you got crystal ball being disciplined. Yeah.

Charles Tarriere:

in my view is one of the key things I've seen time and time over where you sit on a very healthy paper profit

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

And then you think, ooh I'm just gonna hold a little more, a bit more, that returns and then something happens and it evaporates because obviously you cannot, you can control your asset, but you cannot control your, your market. And I think being that discipline is very important. when you hit your return. Just sell, especially when you, your value add

Adrian Strittmatter:

Stick to the plan.

Charles Tarriere:

Stick to the plan. the second thing I'd say, which is very important. also in value add, is that when you buy an asset in investment, you make sure that you have multiple ways multiple lever to achieve your returns. Maybe you'll buy an asset with five different levers. you're gonna be able to act on two, maybe three of them, and if you act on the three, gosh, you'll be in upside return territory. But this is Important, just, an asset which. it either works or it actually bombs that that's never a good plan in my view. You need to make sure you have multiple, branches to, to hold onto.

Adrian Strittmatter:

in terms of the market at the moment and maybe looking at a few sort of little, little nuggets, do you think there's. Maybe. Maybe it is again, it's retail. One asset Class or one area that you think at the moment is underestimated, undervalued, not talked about enough.

Charles Tarriere:

office actually.

Adrian Strittmatter:

Mm

Charles Tarriere:

it's been obviously hammered

Adrian Strittmatter:

mm.

Charles Tarriere:

last two years. We're seeing the sentiment investor changing at the moment Some investor now openly talking about office we've kept office on our investment shopping list and I had recently, a call actually, last week when investors said, oh. it's quite refreshing to see finally a manager actually who dares talk

Adrian Strittmatter:

who Dares talk about office. Yeah.

Charles Tarriere:

there's obviously,

Adrian Strittmatter:

Do you still call it office? Yes. He, he still, you haven't masquerade changed the name? Yeah.

Charles Tarriere:

no, no, no, no. But it, it, it, it's obviously have to be selective. they still further pain to be felt in that sector. there's bit of froth that's been over. Developed. and, but I, i believe that some of the pricing is starting to become very interesting for what is sustainable Cashflow Office with a real use, not redundant real

Adrian Strittmatter:

Mm.

Charles Tarriere:

Mm-hmm.

Adrian Strittmatter:

Because I think that's, you are absolutely right, and I think that's a really difficult one. We were talking about data we were talking about consumer insights and. It's specifically with regards to the office. It's really, really difficult to get because even the owners of companies. even ourselves at, at Saentys], it's been very hard to define a policy. there's been a lot of remote working. a lot of remote. Recruiting as well which has given us a wide variety of, of the ways that we occupy space But that is refreshing to hear that, the office as a, as a destination is still or is back on investors' radar and looked at with confidence.

Charles Tarriere:

and, and also, to go alongside what you're saying, office always been in Harvard. Is it the cost center Is it the profit center

Adrian Strittmatter:

Hmm.

Charles Tarriere:

It's always been the, the, the, the hard bit to evaluate, you would say a law firm that's probably their profit center Mm-hmm. and I dunno, a hotline for whatever company is probably a cost center. would the company be as much like by the customer if they didn't have that hotline? this is always the

Adrian Strittmatter:

Mm.

Charles Tarriere:

a, the circle you need to understand. and that's the hard bit about offices. and we were talking, I was saying earlier about, the simplicity of buildings. office building can be very complicated as well. And that's why, the success the relative success we had in places such as

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

we, we did the same in cities like Barcelona or copenhagen. Buying those Simple buildings made it easier because they were adaptable to whatever, tenant we had.

Adrian Strittmatter:

How would you react to sort of the, the, the, the rumors or it's not even rumors'cause some of them have entered that space of hospitality operators wanting to become more active within the, within the office sector. would you.

Charles Tarriere:

in terms of the flex office operator or

Adrian Strittmatter:

actually even hospitality groups like, a core some of their sort of hotel components do have a coworking sort of product that goes with it. And there have been some noises in the market that hotel operators would want to come into the space

Charles Tarriere:

I think actually it's Very valid It's funny because, Up until A few years back before ever

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

flex operator, for example, we're our tenants.

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

a landlord tenant relationship with them. and in the first few years of our existence we've been using a flex office Mm-hmm. so we've become actually, a customer, a user of this and I've seen. I've discovered something New especially the one we're using which I won't, name, but

Adrian Strittmatter:

No, you're not plugging them then.

Charles Tarriere:

they're being run by hospital hospitality people and they got it right those people, they, they exactly what it needs I've seen other operators which are think really like landlords and it is not the right thing where the one. I'm referring to, referring to, is really hospitality mindsets. So I, I, I, I think that there's a place to, for, for that. Mm-hmm. because ultimately they bring an additional value in terms of the customer,

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

they really make you feel at ease when you go there. make you swallow the pill of a higher rent as well. Much mo easily.

Adrian Strittmatter:

But, but hopefully as well, because we're also in, in, in our London office also in a, in one of those operator spaces as well, and it takes away a lot of the hassle. Mm-hmm. But I think the key thing, and it's Maybe also going back to what you're saying at the beginning it's all about, customer service and making sure that you are listening to who the tenants are and understanding what they are. We talked a lot about value within real estate. Are there any surprises Left is there any market or any asset class that you think is, is ready that that, that we might see some more surprises, things that might be transformed or pop out that no one's really seeing at the moment?

Charles Tarriere:

the last five years, it's all been about alternatives. I think it's been, in certain cases for me, more of a marketing spin, branding spin

Adrian Strittmatter:

What would you mean by, sorry, alternatives, in, in terms of clarification. what would you mean by.

Charles Tarriere:

I think if you think about self storage

Adrian Strittmatter:

Okay. Yeah.

Charles Tarriere:

about dark kitchen,

Adrian Strittmatter:

Mm.

Charles Tarriere:

dark store, that stuff, at the end of the day, these are urban Logistics assets or, or small logistics, industrial assets have just converted for a New use A a and i I, those type of surprise that I'm sure there will be somebody

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

a New way to deal with it. that's not the way i I think about it. Mm-hmm. i think more about it, about what's the fundamental change in the use of some real

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

Mm-hmm. we've seen talking about industrial, I first, when we did our, our big push industrial was. Back in 2011, 2012, I remember we did that in France and it was a market where everybody was looking at us just what are you doing? Going to France buying logistics assets, market which has no GDP growth Mm-hmm. and in an asset class where basically unless you're a developer, you will not make any money or nobody has made any money in 20 years.

Adrian Strittmatter:

So why are you going? Yeah. Mm-hmm.

Charles Tarriere:

was a fundamental change in the offering supply. Balance there where up until the early two thousands, there was a lot of supply and then it's been absorbed, but there's not, not been much development. So when we came in, in the early 2000 tens, there was indeed fundamentally change in terms of usage. The e-commerce were coming up, but also the traditional sectors were needed to still use logistics assets. And we've seen certainly this push on the rent. For an asset class, which hadn't seen, if you had bought, I think a logistics asset in the nineties compared to 2010, I think the rent was pretty much

Adrian Strittmatter:

A Flat line Yeah.

Charles Tarriere:

and I think we'll see those fundamental change. So what you need to understand is that what will trigger the changes? and I believe that retail is one of them today, for example, because it's been hammered, it's been tabooed for, for 15 years. and somehow. Play has been forgotten. That is an essential part of our Lives and day-to-day

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

and as a consequence, investment will come back into it and say, and actually it's viable real estate, it's viable cashflow. Mm-hmm. I can make money because actually my underlying tenant, and that's obviously the most important. Is making money out of this I'll, I'll give you another anecdote. a

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

was talking to the director of expansion of one of the leading

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

retailers, omnichannel. So present on, physical store and online and said, to us, probably two third of our, any investments, to our distribution is online. We need to spend enormous amount of money to three quarters of our profit comes from all brick and mortar retail parks.

Adrian Strittmatter:

Wow

Charles Tarriere:

because it's simple, real estate. They can put all their stock there. They're not constrained by any, opening hours or

Adrian Strittmatter:

Mm.

Charles Tarriere:

service charges they have in shopping centers. they have to invest into the logistics on the online presence to make sure that the customers, they, they, they retain the market shares, but their profit is in good. old brick and mortar.

Adrian Strittmatter:

That's crazy. I, I would, i would not say that that's something that a lot of people would know. I think most of, i think probably the perception would be. that. That The the bricks and mortar acts, actually the opposite. The, the bricks and mortar acts as the flagship, as a kind of advertising element, and that the online is where all the sales are done and where all the profits done.

Charles Tarriere:

He, he gave that person, gave us also another anecdote or another

Adrian Strittmatter:

That's crazy.

Charles Tarriere:

he said, if you, let's, let's assume you have. A 50,000 square meter shed. Mm-hmm.

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

Which is quite big. And certainly you need to double it because there's demand operating a hundred thousand square meter shed a complete different ballgame. certainly, your distances is, yeah. Could be twice as big,

Adrian Strittmatter:

Mm.

Charles Tarriere:

then the logistics of it, the the, the operation of it, so much more complicated. Costly.

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

it, it's not a matter of adding oh, I can do, now I can do 10% of my my business online where I used to do 5%. So the cost will be a

Adrian Strittmatter:

Mm.

Charles Tarriere:

incremental 20%. No, no, no, no. It it's, it's quite different the way it's, it's working.

Adrian Strittmatter:

No, that's a good, that is a good anecdote. That's a good nugget. Yeah.'cause it has been it's been massively challenged. when you talk about retail, do you include. Do you include the sort of more f and b experiential elements in that as well? in terms of a, of a sort of like the bars, the restaurants the, the sort of more experiential assets, there's, the darts, the bowling, the, all the rest of it. Do, do you, do you put that in there as well as a, as a, or do you really look at sort of retail shopping?

Charles Tarriere:

retail is necessity, proximity shopping

Adrian Strittmatter:

Okay. Convenience. Yeah.

Charles Tarriere:

of retail, which can include FNB Mm-hmm. that's where you do your, your daily or your Weekly shopping And there's always an element of FNB. that. The important is your, your tenant

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

what will attract your, your local family to come here on a weekly basis to do, to make sure they, they do the cross the groceries, because it's local, but also because it provides suddenly very easily. of their retail needs, in one destination. And may include, Actually I like to go with my kids on a wednesday afternoon where they don't have school, have the little, food and maybe just go to the little jumping place where I can I can have a bit of a rest when, I exhaust the kids. Mm-hmm.

Adrian Strittmatter:

Yeah. Yeah, I mean that's the, that's the key thing. I think what we've also found, and this is a lot of buildings that we've branded, helped market bring to market. We've a lot of the time we've utilized, especially on meek use, we've used a kind of. Bottom up. So get the retail, get the f and b, get that that will attract tenants for the internal sort of spaces, but it will also create a destination within the area, as you said, where people, external visitors will come and activate your assets as well. So it's has that double that double positive.

Charles Tarriere:

remember one of the first building we worked on together in Switzerland of all places. we actually had one of the first tenant was a crash Mm-hmm.

Adrian Strittmatter:

How true it was You're right.

Charles Tarriere:

actually found. out that. A crash Was a magnet for companies.

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

Because I thought in Switzerland everybody had access to crash for free

Adrian Strittmatter:

Oh, no. It's a, it's a battle. It's a battle. So companies.

Charles Tarriere:

in and say, oh, and I'm allowed to have actually some space in the crash, Mm-hmm. because I'm a tenant. Okay. makes the customer conversation so much easier with them. Again, just adding a service, something to your occupier.

Adrian Strittmatter:

In terms of, Evonite in the future or the next couple of, next couple of years, what are you excited about? Where do you see the opportunities going? How do you see it growing and developing and being the, the one of those, forward bearers of the sort of Independence that we talked about before

Charles Tarriere:

First of all, it is nice to see that our, our core principle, ha hasn't changed in terms

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

perce of it, being independent in a world which has enormously con consolidated I think it's been also recent use about further consolidation in, in

Adrian Strittmatter:

Yeah.

Charles Tarriere:

and and for that I think they're all, all. Place and what we can offer to our clients to our investors, is still more than valid than than Yesterday what's exciting about, is first working with my, my co-founders and our, our colleagues, in the business we are, got, I'm really lucky to work with a, a good bunch of people who know what they're doing and we are having fun as well. i think the first question you asked me today, I forgot to say that. What led me to here? I think having fun as well, and what you do

Adrian Strittmatter:

Yeah.

Charles Tarriere:

When you don't have that fun, maybe it's time to change And we've created with I a place which working hard, but also having

Adrian Strittmatter:

Mm-hmm.

Charles Tarriere:

we're working for clients. And, and I think going forward we're, we're, agile, very nimble, and I think that's what should actually help us in the future to grab the best opportunities. I learn the word in the two, 2023. So back then, from our head of research he will recognize himself. He used the word perma crisis and We're definitely been living for the last six or seven years, especially in the uk here.

Adrian Strittmatter:

Yeah.

Charles Tarriere:

in Perma Crisis There's been a crisis after now another. Mm-hmm. So you have to be flexible in what you do. Mm-hmm. you can't just simply. oh, I'll. Invest into this and be really convinced that three years down the line that investment rationale still will hold.

Adrian Strittmatter:

Yeah.

Charles Tarriere:

Yeah. it, it's, I think it's pretentious to think that it's gonna be like this. So hence I think being flexible being nimble, agile in terms of where you invest still with the core fundamentals about assessing that risk I mentioned is quite important. And for that, I think. we're extremely well set up.

Adrian Strittmatter:

And you've got the independence to be able to do that as well. Perfect. Charles thanks ever so much for your time on the, on, very much on the show. Some amazing insights in there and, yeah, thanks for, for doing this exercise with me in English. It was perfect. Thanks a lot. Merci.