Markets love an acronym, and ‘HALO’ is the latest. Standing for Heavy Assets, Limited Obsolescence, HALO has become shorthand for the defensive rotation into hard assets insulated from AI-driven disruption.
Yet insulation alone may not be enough for long-term investors seeking progression as well as protection. That’s where Physical Assets, Compounding Earners, or ‘PACE’ for short, comes in.
From ownership to operation
PACE is not just about owning assets. It’s about operating essential infrastructure as compounding businesses. Cash flow growth, not just asset revaluation, drives returns, and REITs exemplify the model. Modern platforms such as those providing doctors’ surgeries, self-storage, or logistics hubs actively manage their assets to grow rents, occupancy, and dividends.
Long-income REITs compound, delivering inflation-protected growth even when yields are stable. Operational REITs go further, driving income through active management and pricing agility.
Dividend histories* of holdings in the TM Gravis UK Listed Property Fund tell the story:
- Primary Health Properties – 30 consecutive years of growth
- Derwent London – 18 consecutive years of growth
- Safestore Self Storage – 16 consecutive years of growth
- Sirius Real Estate – 12 consecutive years of growth
- LondonMetric Property- 10 consecutive years of growth
These are not market fashions; they’re engines of accumulation.
Easy as ABC
At the heart of the PACE philosophy lies a simple principle, articulated best by LondonMetric Property: ABC – Always Be Compounding. Compounding only works when the underlying real estate is mission-critical and rents are sustainable. For “triple-net” landlords such as LondonMetric, tenants shoulder repairs, insurance and rates, minimising leakage and protecting yields.
Keeping PACE
With investors currently concerned about both the concentration of AI-related stocks in global indices and whether these huge companies can sustain their momentum, PACE’s advantage lies in the eighth wonder of the world: compounding income over time.
What’s more, history shows that as market euphoria fades, REIT income has shown resilience, supported by those contractual rents. From the dotcom peak in 1999/2000, the NASDAQ plunged 60% and UK property shares surged 60%.
Amid all the AI-driven market optimism, REIT income continues to grow.
*Source: company reports, Bloomberg
Important information
This article is issued by Gravis Advisory Limited (“GAL” or the “Firm”)), which is authorised and regulated by the Financial Conduct Authority. GAL’s registered office address is 24 Savile Row, London, United Kingdom, W1S 2ES. The company is registered in England and Wales under registration number 09910124.
TM Gravis UK Listed Property (PAIF) Fund (the “Fund”) is a sub-fund of TM Gravis Real Assets ICVC, which is a non-UCITS retail scheme and an umbrella company for the purposes of the OEIC Regulations. The Fund is a Property Authorised Investment Fund (“PAIF”).
The Authorised Fund Manager of TM Gravis Real Assets ICVC is Thesis Unit Trust Management Limited (TUTMAN), Exchange Building, St John’s Street, Chichester, West Sussex, PO19 1UP. TUTMAN is authorised and regulated by the Financial Conduct Authority. GAL is the investment manager of the Fund.
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