A major recession, a property crash, an election looming with an incumbent prime minister (a former finance minister) who is defending the record of a government that has been in power for 13 years and the real estate industry racked by insecurity as to its future. We are talking, of course, about the United Kingdom in 1992 and not in 2010, but the similarities are striking and do not end there.

The purpose of this article is to question whether the use of debt in real estate investment is, indeed, a pre-requisite or if “ungeared” returns are a realistic alternative. It is pertinent to ask this question at this time, as excessive debt in some property funds has harmed rather than assisted performance.

Research is the bedrock of real estate investment. Instinct is fine, but without the data, analysis, trend recognition, thoughtful processes and sound theory, investors and fund managers cannot defend the decisions necessary to support their investment strategies. The real estate business is notable for the number of people who are active at a senior level in research roles in insurance companies, consulting firms, fund managers and academia. A smaller number have been able to move seamlessly between and within sectors.