Property: Debt vs Equity | Conviction Capital | Episode 3

About

• Property offers two distinct investment paths: equity ownership, with exposure to income and capital growth, or debt, earning interest while sitting higher in the capital stack.
• Higher rates and tighter conditions are creating both risks and opportunities, with quality, income-producing assets and conservative lending standing out.
• Investors should look beyond headline yields: manager track record, gearing, liquidity, asset quality and the ability to protect capital are critical.

Property markets are being reshaped by higher interest rates, tighter financing conditions and changing valuations. In this episode of Conviction Capital; Alex Abell from ASA Real Estate and David Dix from Thinktank explain how they are approaching the market from opposite sides of the capital stack.

The discussion compares property equity with property debt, looking at where returns come from, how risk changes with gearing and what investors should consider when choosing between capital growth and income. They also examine the impact of higher rates, private credit and the growing amount of capital chasing property-backed lending.

The conversation also explores where the opportunities and risks lie, from essential-services retail and quality existing assets to conservative commercial lending. Both managers emphasise the importance of track record, asset quality, liquidity, governance and understanding exactly what investors are being paid for — and what could go wrong.

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