Carl McConnell, Director of Global Real Estate at Mourant Governance Services, writes that the institutional investor landscape in 2026 makes for intriguing viewing: pension funds, sovereign wealth funds and insurance-linked capital are deploying at greater scale, into more operationally complex strategies, with more sophisticated internal governance requirements than ever before.
Speak to asset managers and institutional investors who are actively deploying capital today, and the shift is clear. Tax still matters, of course, but it is rarely the deciding factor over jurisdiction.
Investors are not simply seeking yield. They want structures that provide them visibility, control and protection. For asset managers who have not yet adapted, the consequences are becoming visible in the mandate market.
As a result, investors are increasingly looking beyond traditional asset-level joint ventures and toward platform-level structures, where they own a stake in the operating company alongside the underlying real estate. The recent rise in platform transactions reflects this shift clearly: Brookfield’s sale of Student Roost to GIC and Greystar for GBP3.3 billion, Blackstone’s EUR21 billion recapitalisation of Mileway, and AustralianSuper’s investment into M7 Real Estate alongside Oxford Properties all demonstrate institutional appetite to invest not just assets, but in the operating infrastructure that drives returns.
When advisers recommend an offshore structure, they are usually trying to solve several challenges simultaneously. Offshore vehicles are often attractive not because they avoid governance, but because they allow governance, regulatory oversight and investor protections to be calibrated to the nature of the capital, the strategy and the investor base.
In addition, it works for investors who want clean ring-fencing of assets so liabilities cannot spread across a portfolio, and clearly defined consent rights or veto provisions, where major strategic decisions require investor approval, while day-to-day execution proceeds without unnecessary friction. They also want exit optionality from the outset, rather than negotiated under pressure at the point of disposal. When a platform establishes itself as a recognised brand, it creates additional exit options other than standard property disposals, such as a recapitalisation with other institutional investors, or even an IPO listing.
Structuring considerations are fundamentally about governance and operational clarity, not primarily tax. Increasingly, jurisdictions such as Jersey, Cayman Islands and Luxembourg, are being chosen because they deliver both the legal and structural frameworks to support them.
Handling complex institutional capital
Investors are using structuring quality as a proxy for whether a manager can handle complex institutional capital.
A couple of examples bring this to life. Jersey and Cayman keep winning institutional mandates not through regulatory arbitrage, but through something more useful in practice: legal certainty combined with flexibility that works across complex, cross-border transactions. That maps directly onto what institutional investors are asking for: predictability, clear legal frameworks and structures that can accommodate diverse capital sources without friction.
Jersey Property Unit Trusts (JPUTs), for example, provide a well-understood framework for holding UK real estate. Investors value the clear trust law foundation, strong asset segregation and a long track record of institutional use. The trust instrument can be drafted in a bespoke way to give unit holder consent provisions for investors, which gives sufficient comfort, particularly in JV scenarios. Equally they can be used as a relatively simple tax transparent investment vehicle for a single investor.
Cayman structures are attractive for different reasons. They are widely understood by global investors at fund level and can accommodate complex cross-border investor groups within a single vehicle. For transactions involving capital from North America, the Middle East and Asia Pacific, Cayman structures often provide the most practical common framework.
By comparison, some onshore regimes can face a number of structural and regulatory limitations or increased complexity.
The relaxation of the UK REIT rules, and the UK’s Qualified Asset Holding Companies (QAHC) regime both reflect a shift by the UK to challenge the status quo. The QAHC regime was introduced to make the UK more attractive as a location for institutional holding structures (by offering a level of tax neutrality at the QAHC level) and is increasingly part of the structuring toolkit for pan-European real estate platforms, often alongside Luxembourg, Jersey or other established jurisdictions.
Structures as institutional infrastructure
This is where the governance argument becomes most tangible. Sophisticated investors are increasingly viewing structures such as JPUTs, UK REITs and QAHC as the infrastructure that supports credible institutional partnerships.
A well-structured partnership provides a framework on which governance arrangements can be built with precision. Limits of authority can be carefully calibrated, allowing an active partner to take acquisition, disposal or development decisions within agreed financial limits, while larger or out-of-strategy decisions remain subject to investor approval.
Getting this balance right is crucial. Investors want meaningful oversight, but they also want partnerships to operate efficiently without constant delays or repeated shareholder approval. Other key commercial arrangements can also be documented from the outset. Promote structures, development fees and incentive mechanisms that can be agreed up front, alongside clear methodologies for calculations, trigger events, or clawback provisions. Similarly, reserved matters can be tailored to the specific risk profile of the venture.
In these situations, governance extends well beyond the underlying assets. Investors increasingly want their own people on the board, and having clarity around the operating mandate, senior hiring decisions, technology and strategy.
The competitive advantage in getting this right
As institutional capital continues to flow into operational real estate, the complexity of the structures required is only increasing. Platform joint ventures require governance frameworks that go far beyond traditional asset-level documentation. For managers, that means structuring can no longer be treated as a technical workstream that follows once commercial terms are agreed. It needs to be part of the proposition from the outset.
Investors are increasingly scrutinising governance architecture as part of manager selection: who controls key decisions, how consent rights operate, where conflicts are managed, how incentives are aligned, and whether the structure can accommodate future capital, exits or recapitalisations. A manager that can answer those questions early in a pitch is signalling more than technical competence; it is demonstrating that it understands how institutional capital needs to be protected and deployed.
Conversely, weak or underdeveloped structuring can become a reason mandates are lost. If governance is vague, reporting lines are unclear or exit mechanics are left to be solved later, investors may see that as a proxy for execution risk. In that context, governance design is not a back-office legal issue. It is a competitive differentiator. Asset managers who demonstrate their understanding of credible, flexible and institutionally robust structures will be better placed to win capital, build partnerships and retain mandates over the long term.
