From View From The Top, 25 February 2026
The 2010 Portfolio in a 2026 Market
And Why the UK’s “Squeezed Middle” May Be the Most Mispriced Asset in the Room
For 70 years, commercial real estate meant four things:
- Office
- Retail
- Industrial
- Apartments
- Office
- Retail
- Industrial
- Apartments
That was the institutional playbook.
And for a long time, it worked.
But I think if your allocation still looks like that today, you may be holding a 2010 portfolio in a 2026 market. And things have changed.
The Data Shift
Recent global research (including from Deloitte) highlights something important:
Core real estate — office, retail, industrial, traditional multifamily — delivered roughly 6% annualised returns over the past decade.
Meanwhile, “alternative” sectors such as:
- Data centres
- Cell towers
- Life sciences
- Senior housing
- Manufactured housing
- Data centres
- Cell towers
- Life sciences
- Senior housing
- Manufactured housing
…delivered closer to 11%+ annualised returns.
Nearly double.
And alternatives already account for over 40% of global CRE value — projected to rise meaningfully over the next decade.
The capital migration isn’t theoretical.
But here’s the part that matters for us in the UK.
The UK Blind Spot
Everyone talks about:
- Logistics
- Data centres
- Life sciences clusters around Cambridge and Oxford
- Living sectors
- Logistics
- Data centres
- Life sciences clusters around Cambridge and Oxford
- Living sectors
But there’s one sector sitting in plain sight:
The Squeezed Middle
But what about the teachers. The NHS staff. The civil servants. The dual-income families earning £60k–£120k.
Too “rich” for social housing. Too constrained for home ownership. And increasingly priced out of institutional build-to-rent.
UK housebuilding is running well below long-term averages and far behind population growth. Planning friction, viability gaps, and development finance stress have created a supply choke.
Demand? It has never been stronger.
And unlike office, this isn’t cyclical demand. It’s demographic. Structural. Political.
Venture Real Estate vs Real Estate With Venture Risk
There’s a difference.
True alternative outperformance hasn’t come from slapping a “data centre strategy” onto a legacy fund.
It has come from:
- Backing specialist operators
- Owning operational complexity
- Underwriting demographic inevitabilities
- Building real and sustainable platforms, not one-off deals
- Backing specialist operators
- Owning operational complexity
- Underwriting demographic inevitabilities
- Building real and sustainable platforms, not one-off deals
In the UK context, that means:
- Purpose-built rental for middle earners
- Capitalising operators with on-the-ground asset management experience
- Credit + equity in the same room – a 360 degree view
- Long-duration capital that understands operational risk
- Purpose-built rental for middle earners
- Capitalising operators with on-the-ground asset management experience
- Credit + equity in the same room – a 360 degree view
- Long-duration capital that understands operational risk
This isn’t venture capital.
It’s venture-style thinking inside real assets.
The Generational Shift
Survey work from Deloitte also highlights something interesting:
The next generation of CRE leadership favours alternatives far more heavily than current leadership. And a large proportion of today’s decision-makers will retire within the decade.
That matters.
Because capital allocation changes when people change.
And the UK is approaching that moment. Old models will be retested.
Where I Think the Real Opportunity Sits
Not in chasing the next fashionable acronym or doing what everyone else is doing.
Not in pretending office magically fixes itself.
The real opportunity for capital is building scaled platforms serving:
- The squeezed middle
- Urban infill rental
- Operationally intensive housing
- Mixed credit + equity strategies
- The squeezed middle
- Urban infill rental
- Operationally intensive housing
- Mixed credit + equity strategies
At Hilltop, our DNA has always been both credit and equity — understanding not just the underwriting spreadsheet, but the asset and the operator behind it. Having a range of skill sets that range from large scale institutional development, asset management, workout, and investment management across equity and credit.
Success in this cycle won’t be measured by IRR slides or cap rate predictions.
It will be measured by:
- Collections
- Refinanceability
- Tenant stability
- Cost discipline
- Operator depth
- Collections
- Refinanceability
- Tenant stability
- Cost discipline
- Operator depth
The world doesn’t need more capital. It needs better operators backed by aligned capital.
Capital on the Move
The migration is already underway.
Family offices frustrated with bond volatility. Institutions stuck between ticket sizes. GPs pitching into a void — too big for FOs, too small for institutions.
The bridge?
Aggregated platforms. Joint ventures. Structured capital. Real operating infrastructure.
Not everyone will catch this wave early.
But those who understand where structural demand sits — especially in UK housing — won’t need to chase the next headline sector.
They’ll own the one that was hiding in plain sight.
Hard Landing
Transitions are uncomfortable.
Markets shift. Capital shifts. Leadership shifts.
And many investors still feel safer doing what worked before.
But doing things the old way doesn’t make them less risky.
It just makes them familiar.
The real work — in markets and in life — is recognising when the structure has changed, even if the surface looks calm.
